11 April 2002
Venture capital (VC) investment in Europe fell by more than half in 2001, compared to 2000. Nevertheless, a total of €9.6 billion was raised in 1,800 deals, according to research carried out by VC specialists VentureOne and consultants Ernst &Young.
“Businesses [in Europe] that rely on intellectual property and are protected by high barriers to entry – such as biopharmaceuticals and software – were better equipped to weather 2001,” said Gil Forer of Ernst &Young’s Venture Capital Advisory Group.
The research was based on a survey of more than 1,000 European VC firms and focused on early-stage investment.
According to the research, companies in just four countries scooped up more than three-quarters of all VC investment in Europe. Those countries were the UK, Germany, France and Sweden. In addition, investments were also concentrated in four main industries: biopharmaceuticals, software, communications and consumer and business services.
Despite the severity of the downturn in the IT industry, the biggest sector was software, which accounted for 29% of deals and 24% of the investment. A total of €2.3 billion in VC money was invested in software in 2001.