Cleantech a Bright Spot in Gloomy European VC Picture
Mirroring their colleagues in the U.S., European venture capitalists have kept a tighter grip on their money as the financial crisis has deepened, according to VentureWire. Early-stage companies in particular are bearing the brunt, and the information technology and health care sectors have both declined sharply. Cleantech, however, continues to attract investors.
Venture capital investment in Europe fell 10% so far this year, with VC-backed companies raising EUR3.41 billion across 617 deals, compared with the first nine months of 2007, when they raised EUR3.77 billion across 788 deals, according to VentureSource, a research unit of Dow Jones & Co., publisher of VentureWire.
The VC community as a whole has been reacting very quickly to this downturn, compared with 2000 and 2001,” said Hans Schreck, a general partner with TVM Capital, but he added that he’s “not convinced” that Europe will experience a deep recession that would further slow down the pace of deals.
In the third quarter, information technology fell the most, dropping 22% to EUR386 million, its lowest quarterly total in three years. The number of deals in the sector fell to just 85 from 114 in the same quarter last year.
Life science investment also declined in the third quarter though not as much, with EUR312 million in financing, 13% less than the total from the same period last year. The drop was due to medical device companies, which raised only EUR39.7 million compared with EUR78.7 million in the same period last year.
Cleantech had the strongest showing, raising EUR192 million in the quarter, up 78% from the EUR40.5 million raised a year ago. The total was inflated by the EUR120 million raised by Helsinki, Finland-based WinWinD, the largest venture deal of the quarter.
Early stage companies have taken the largest hit so far this year, down 20.8%, having raised only EUR824 million across 240 deals through the first three quarters, compared with EUR1.04 billion across 278 deals in the same period last year.
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