European Private Equity Activity

European Private Equity Activity


Europe is leading a global renaissance across private equity and venture capital markets, seeing €688bn in capital under management during 2018. Biotech and healthcare is amongst the sectors where Europe is seeing record levels of private equity engagement both in volume and value. Supportive public policy across Europe has led it to being ranked before the United States across innovation, entrepreneurship, taxation and global market access sectors. 

According to Invest Europe/ EDC data recently released:

  • Total fundraising for Europe reached €97.3bn in 2018, exceeding the prior year’s volume of €96.6bn. Venture fundraising achieved €11.4bn, the highest level recorded to date
  • The total equity amount invested in European companies increased by 7% in 2018 to €80.6bn, the highest level recorded to date. The number of companies receiving investment also increased by 7% to over 7,800 – another record level – with 86% of them SMEs.
  • Venture capital investment surpassed the 2017 record by 13%, reaching a new high of €8.2bn in 2018. The number of companies backed by venture funds increased 12% to over 4,400. Start-up investments rose by 29% to €4.9bn, with 2,475 companies backed, a 6% increase. Seed investments declined by 7% to €721m, but by number of companies increased 22% to 1,350. Later-stage investments reduced by 3% to € 2.6bn, but increased 8% by number of companies to 758. ICT was the largest sector for venture investment, receiving 47% of the total, followed by biotech and healthcare (28%) and consumer goods and services (9%). 
  • Growth capital investments remained at a record level of €11.9bn, with 2,106 companies financed. Venture-backed companies secured around 18% of the growth investment amount to enable them to scale-up their activities. European companies operating in the ICT sector received one third of the investment amount, followed by consumer goods and services (21%), business products and services (18%) and biotech and healthcare (9%). 

Traditionally, over the past decades North America has been the main driver of biotechnology and healthcare growth despite Europe having almost twice as much population as United States and Canada combined. Year on year growth in biotech and healthcare financings in Europe had been flat for several years in the past.

With the rise of European investment culture ranking higher than the United States, we see growing chances for Europe to become the next frontier of biotech and healthcare ripe for a sophisticated approach to the industry. Strong science, excellent manufacturing and loyal workforces continue to be amongst the core credentials of European firms and start-ups as well as its leadership in areas such as a highly transport infrastructure and overall regulatory climate. If product development excellence and commercial acumen can be fostered more broadly in addition, there is good chance to see a shift in the innovation landscape.

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