Venture investing dip in Europe, decline of 35 percent

Written on August 27, 2008 – 1:50 pm
Ernst-Jan Pfauth, editor in chief

A report by Dow Jones VentureSource has a pessimistic conclusion: venture capital firms have invested significantly less money in European start-ups during Q2 than during the same period last year - the amount declined with 35 percent, to $1.3 billion. They’ve invested in 167 young companies, which is 42 percent fewer than last year. This year’s Q2 was the worst since at least 2000, when VentureSource started tracking European data.

The worst sector of all? Information technology. I assume that concerns our beloved Internet industry as well. The British IT industry, former leader, had to take the hardest punch, venture investment declined with a stunning percentage of 49.

Ram Srinivasan, a venture partner with European firm Wellington Partners explained to The New York Times what’s causing the slowdown in funding: “Europeans are wary of investing in start-ups until the United States markets stabilize and economic and political uncertainty recedes”.

The US venture investment also declined, yet not as sensationally as in Europe. The investments fell with 19 percent.

I hope you like that post!

The Next Web Blog covers start-up news from all over the world (not just the Valley), exciting new technologies and inspiring entrepreneurs. If you're new here, you may want to read our 'About' page and subscribe to our RSS feed.

Do you have a start-up that we should write about? Contact us! Thanks for visiting and hope you come back again!

Dow Jones & Company, Dow Jones VentureSource, economy, Europe, Information technology, investment, United States, venture capital

About the author: Ernst-Jan is blogger and co-organizer of BLOG08, who previously worked in New York to cover news at the United Nations. Next to writing, he's also a singer in the band Christina Five. Follow him on Twitter or read his personal blog Dutchproblogger.com .

Post that could be related to this post:

European and American VC’s, please partner up

Last year, start-ups had a hard time seducing European venture capital firms to invest in their companies. VentureBeat reports that the VC's are backing the fewest companies on record since research group VentureSource began tracking...

A quick update on the digital life of Europeans

Every year, the European Commission carries out a study on the digital lives of the citizens in its 27 member countries: the E-Communications Household Survey. The research mainly concerns telecommunications - we're giving up on...

Present your start-up to 400+ european VCs

On 1 and 2 December 2008 the second edition of the European Venture Summit will take place in Düsseldorf, Germany. The first edition took place in Lisbon with more than 400 prticipants. If you have...

One comment to “Venture investing dip in Europe, decline of 35 percent”

By Drivingsouth on Aug 27, 2008

Investments is about leveraging opportunities up and down. Wouldn’t be smart to keep up the pace at this time.

Anyway my “bet” is that because of this instability, people will soon realize that we are not as dependent of the states as before. Lets see…

[Reply]