Hot or Not in 2020 Europe

February 15, 2021

The pandemic reshaped our relationships in ways very few guessed would happen just a couple months before its effects materialized. In March, many prognosticators predicted a year of destruction for financial investors. Amazingly, that “consensus” view failed to materialize. Instead, private equity and venture capital markets across a good portion of the financial world heated up. Here’s a look at the 2020 European picture according to private equity data provider Pitchbook.

A Summary View

On a summary view, venture capital (and private equity investments that could easily be characterized as venture capital) reached an incredible $46 billion. How much did firms invest in 2019? The 2019 figure was $41.8 billion – meaning the pandemic not only didn’t harm VC and PE activity, but led to more VC and PE investment.

According to the Pitchbook data, VC and PE investments were made across the board, from food service delivery to ecommerce. Demand for startups that showed promise was higher than ever.

As of Pitchbook’s December 14th data, VC and PE deal count dropped from 7,502 to 5,883, meaning that the value of the deals that did happen expanded significantly.

Of course, some political areas performed better than others.

The following map has the European VC and PE heat map for 2020. The map is color-coded, with darker blue colors having experienced jumps in VC and PE activity and light blue countries having experienced a decline in VC and PE investment.

Source: Pitchbook

The United Kingdom

In Europe, the UK continued to be the strongest draw, having attracted $13.7 billion in 2020. This occurred even though the number of deals in the UK dropped 27% from the prior year to 1,791 deals.

The UK didn’t have problems creating unicorns. In 2020, the UK saw five unicorns show up, the most among all other European countries. Among the UK-based unicorns were Gousto, Hopin, Revolut, and Deliveroo.

The DACH Region

In the middle of Europe – and Europe’s largest economy – Germany saw VC and PE funding jump 10.9% in 2020 compared to 2019. Among the biggest deals were investments in CureVac (vaccine provider), N26 (fintech provider), and e-scooter startup Tier Mobility.

In Austria, big deals included Bitpanda, Arvelle Therapeutics, and Sophia Genetics.

France and Benelux

Shifting over to west of Germany, France continued to be an active VC and PE market. Among the big deals in France were Ynsect (a startup that breeds insects for animal feed and fertilizer) and Mirakl.

In the Netherlands, VC and PE funding rose 38% across 232 deals. The biggest deals included MessageBird and Mollie.

Nordics

Shifting to the Nordic countries, VC and PE investments rose across the area, from Norway to Finland. Among the big deals were Wolt, Kodit.io, and Klarna.

Central, Eastern, and Southern Europe

The pandemic year of 2020 was also good for most of central, eastern, and southern Europe. Among the big deals included Bolt, Quibim, Milkman, and Enthera.

Summing Up

For a year in which the global economy went through drastic changes, the European private equity and venture capital markets heated up. For many VC and PE companies headed in Europe, 2020 turned out to be much better than expected. May the good times live on forever.

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