Venture capital in Europe outpacing US says Earlybird

Despite the ongoing dampened perception of European venture capital, the last 24 months have seen better quality returns for VCs in Europe than for their US counterparts. After 20 years of playing catch-up European venture capital has reached an inflection point, with better real performance among key indicators for the first time in history, according to a report from Earlybird Venture Capital, “Turning Venture Capital into Wisdom: Why returns in Europe are now outpacing the U.S.,”

The report analyses data from the European Venture Capital Association (EVCA), Dow Jones VentureSource and from Munich-based Earlybird’s own internal fund, concluding that:

- Proportionally, Europe venture capital is now producing higher exit multiples than US venture capital, and demonstrating higher capital efficiency;

- Europe has seen some $15 billion in venture-backed liquidity events during the past two years. While this represents only half of the $30 billion in US venture-backed liquidity events during the same period, it was based on only one fifth of the venture funding;

- Since 2005 there have been 14 venture-backed exits of European start-ups larger than $1 billion, among them Luxembourg’s Skype, Swedish open source company mySQL,

British sports betting platform Betfair and German online mortgage broker Interhyp;

- European VC-backed pre-and post-IPO performance also now matches or exceeds that of US counterparts, while a higher share of European VC funds demonstrate top US quartile performance.

“Clearly the message that venture capital is alive and well in Europe hasn’t got out. European entrepreneurs and VCs, for one, are notoriously shy about promoting themselves,” said Jason Whitmire, Partner at Earlybird. “The reality is, there are great venture opportunities in Europe, even if not all deals are making headlines.”

The report is available at: http://www.slideshare.net/earlybirdjason/earlybird-europe-venture-capital-report