Europe Starved of Later Stage Venture Capital

Europe Starved of Later Stage Venture Capital

European tech companies are being starved of later-stage venture capital when compared to their U.S. counterparts, with fewer than one in three to four securing funding after a seed round, according to a leading venture capitalist.

Simon Cook, CEO of London venture-capital firm DFJ Esprit LLP, also said that the U.K.’s dominance as the European center for venture capital was slipping. According to Mr. Cook, somewhere between 500 to 1,000 companies a year get funding deals in Europe of under $5 million.

In the U.S. the comparable figure is 750-1,000. “This figure has been roughly static for about a decade,” he said. But when it came to funding the company’s growth stage, while roughly the same number of companies are founded in Europe as the U.S., in Europe only about 200 companies land deals of greater than $5 million; in the U.S. “that is closer to 1,000,” he said. “As I look at these figures — and I have done for a decade now — the good news is that Europe is not shrinking. The bad news is we are not catching up with the Americans in any way, shape or form yet.”

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