Is Billion £ VC raise really that big in Europe?

TLDR: No. It’s less than even the quarterly VC investment rate in Europe.

There was a bit of chatter in the London startup investor community recently about the welcome increase in amount of funds being raised.

I remember Jon Bradford specifically mentioning close to a £1 Billion raised in a few months by 9 funds. There was a bit of a flutter around the group when JD mentioned the figure at #fplive – people wondering if all the money could even be deployed in the relatively nascent European / London tech startup ecosystem. Someone may even have mentioned valuation bubble, or some such gobbledygook.

Take a quick look at this chart from Dow Jones (source):

VC spend europe 3q14
Click to view full image.

Last quarter VCs invested €2.4 B (~£1.8B) in European companies. At an investment run-rate of £1.8 B a quarter, and increasing, that £1 B raise in a quarter doesn’t look that big anymore.

There will be some additional liquidity from investment exits[1] – IPOs and acquisitions. But given the relatively young ecosystem in Europe – most maturing, successful European startups move(d) to the US for better valuation & operating environments – there can’t be too many exits providing the rest of liquidity.

Makes me wonder the other side now: If this £1 B raise is such a big deal, where has the VC funding been coming in from so far? We’ve been above a quarterly £1 B quarterly investing rate for over 6 quarters now. US VCs investing in Europe without direct presence?[2]

Either way, that £1 Billion figure doesn’t look as big as it sounded first up. And we really do need more of them, more frequently.

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Regulators’ Decision Function

Telecom companies lash out at EU fiber proposal
(Click image for full article)

Reading this news piece got me thinking: What is the best, single point decision function for regulators?

  • maximise consumer benefit,
  • maximise domestic employment and investment opportunities, or
  • help develop national champions who can grow and compete globally

Each has its pros and cons, and they all tend to be in conflict with each other.

Currently most regulators, like the one in news above, seem to prioritise consumer benefit, followed by local investment and employment opportunities wherever possible.

But, is that the best option? If not, which one of the above should a regulator chose to maximise? (Or, in what order should a regulator prioritise them?)

Continue reading Regulators’ Decision Function