Venture capitalists in Europe invested €1.14 billion in 180 deals in the first quarter of 2008, the lowest deal total on record, according to the quarterly European venture capital report from Dow Jones VentureSource. The number of deals dropped 25% from 235 the same period one year ago, while overall investment increased almost 2% as venture capitalists invested more, pushing the median venture round size up 25% to a record €3.3 million.
“The IPO market is virtually non-existent in Europe, and with ongoing turmoil in the global economy, mergers and acquisitions are harder to come by. So, we see two effects: the first, obviously, is a continued slowdown in venture capital deal activity,” said Jessica Canning, director of global research for Dow Jones VentureSource. “The other result is that VCs are choosing to back only the most promising companies and ensure these companies have enough capital backing to be competitive and survive what may be a long road to a liquidity event.”
Overall, Europe's IT investment dropped
22% while investments in European healthcare companies gained 6%, and the business, consumer and retail category gained 164% over the first quarter of 2007.
