Latest Calibre One Index numbers shows that while US venture investment has bounced back to the highest level we have seen for over six years. In fact, reported VC investment in the US was over 15% higher than the highest previous quarter recorded in the life of this index which started. Previous high was $4,088 million in Q3 2007 vs the $4,810 million reported in Q1 2010.
Europe looks very different. With just $632 million of reported deals, this is one of the worst four quarters in the index and you need to go back to 2004/2005 to see those sorts of levels of deals. You can download the data at the end of this post.
Here are the charts:
Biggest quarter ever recorded in terms of combined US and European investment masks the dire state of the European venture market.
While US investment levels have exceeded those in previous years, Europe is trending in the opposite direction.
No country or region across Europe can claim to be immune.
France, having maintained relatively high levels of investment in the early part of the recession has experienced a squeeze on capital too.
As the number of deals done remains relatively stable in Europe, the average deal size is reduced.
So is this all doom and gloom? Well at first sight there is not much to celebrate in Europe. There have been pitifully few new funds closed this year so far – Sofinnova (E260 million), Aster (E70 million) and Atomico ($160 million) being the notable exceptions.
There are also some issues that skew the numbers – the strong dollar means that any dollar denominated index will make investments in other currencies look weak.
What this index does miss however, (it does not set out to measure it), is angel/early investment at a sub $1 million level. Anecdotal evidence suggests that there has been a huge amount of activity in the early stage investment arena in the first quarter. (In fact, I have seen more than one lawyer smiling). If this angel/early stage activity becomes more organised, and if early stage investors with entrepreneurial experience bring the value to startups that we think they can, then the future for venture investment in Europe, whilst far from out of the woods, has plenty of opportunity to bounce back.
You can download the Calibre One Index here.
I have put the historic numbers into a Calibre One Index Numbers. If you use the information, please be sure to credit appropriately and share your thoughts.