Financing for “seed funding” – research, assessment and development of a concept into a product – nearly doubled from €66m to €112m in 2008. Businesses in the next stages of development – what the EVCA calls “start-up” – saw an increase from €796m to €928m in funding towards product development and initial marketing.
Overall, however, investment in ICT is still in decline, and the sector has not recovered from the blow of the credit crunch. Interest in early-stage ventures failed to offset a 36 per cent decline in the amount invested in later-stage buyouts in ICT, and overall investment levels in the sector fell by nearly a quarter to €9.71bn. Later stage venture funding decreased from €1.7bn to €1.4bn.
EVCA spokespeople said the early-stage numbers are not large enough to suggest they will initiate a recovery. Nevertheless, they said they welcome change and a warm uptick for early-stage ICT companies.
The Internet technologies sector benefited most from venture capital in all stages in both 2007 and 2008, accounting for around 15 per cent of the total.
Javier Echarri, Secretary General of EVCA, said in a statement: “In today's fast changing and difficult environment, the support of ICT companies and innovation by private equity and venture capital will become even more vital. ICT has an important bearing on Europe’s competitiveness and the data demonstrates how much private equity and venture capital has to contribute to the European Commission goal of doubling private investment in ICT high growth SMEs by 2020."
Follow this link to the full data release.
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