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AltAssets is the private equity news and research service from Almeida Capital
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PRINT THIS PAGE Fewer but larger venture capital deals in Europe in first quarter13/05/2008. Source: AltAssets. 
Venture capitalists in Europe invested €1.14bn across just 180 deals in the first quarter of 2008. This marks the lowest overall deal total on record, according to the quarterly European Venture Capital Report released by Dow Jones VentureSource. Deal count was down 25 per cent from the 235 deals completed in the first quarter of 2007, while overall investment ticked up nearly two per cent as venture capitalists put more money into these deals, pushing the median size of a venture round in Europe up 25 per cent to a record €3.3m.
'Venture capitalists are being quite selective about the kinds of European companies they invest in - and for good reason,' said Jessica Canning, director of global research for Dow Jones VentureSource. 'The IPO market is virtually non-existent in Europe, and with ongoing turmoil in the global economy, mergers and acquisitions are harder to come by. So, we see two effects: the first, obviously, is a continued slowdown in venture capital deal activity. The other result is that VCs are choosing to back only the most promising companies and ensure these companies have enough capital backing to be competitive and survive what may be a long road to a liquidity event.'
IT was the only major industry in Europe to see a substantial drop, as deal activity plummeted 48 per cent to just 80 deals, by far the lowest total on record. Overall, Europe's IT investment fell 22 per cent to €423m, marking the second down quarter in a row for the industry.
Investment in European healthcare companies climbed six per cent to €430m, as the first quarter of 2008 saw 56 deals completed, 11 more than last year.
The report also showed that Europe's business, consumer and retail category posted a strong first quarter with 28 deals garnering €161m, a 164 per cent increase over the €61m invested in 11 similar deals in the first quarter of 2007.
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