European VCs must raise their game, says Doug Richard
Article Date: Jul 11 2007Doug Richard, CEO of research company Library House and former star of TV show Dragons’ Den, says that European venture capital (VC) has some way to go before catching up with the US. The comments follow research from Library House that shows the value of European VC investment contracting further.
VC investment in European companies shrunk during the second quarter of 2007 to under €1.4 billion (£950 million), compared to €1.7 billion in the same period last year.
‘It is clear that European venture capital is not gaining the ground it needs to if Europe is serious about matching the US in business innovation,’ comments Richard.
At a national level, the UK maintained its place as the most popular destination in Europe for VC funding – but its share of investments dropped to 28 per cent, compared to 33 per cent in the previous quarter.
In contrast, investment in the Netherlands continued to grow, as it has since the beginning of 2006. The country attracted investment of €128 million in the second quarter of this year, compared to €37 million in the same period last year.
The biggest loser was France, with VC investments plummeting from over €200 million to under €100 million. The drop allowed Germany, Sweden and the Netherlands to overtake France in the quarterly league table of VC markets in Europe.
Richard comments: ‘It is surprising to see investment in France fall so far this quarter but perhaps the election of business-friendly Nicolas Sarkozy is an encouraging sign for the future.’
The research also reveals that VC investment in web businesses continues to soar. The second quarter of this year saw over €150 million invested in web companies, more than double the figure for the equivalent quarter last year (€64 million), and almost triple the sum of disclosed investment in the sector during the first quarter of 2007.
