The number of venture capital deals in Europe has fallen significantly, from 2,419 deals in the fourth quarter of 2023 to 1,798 deals in the first quarter of 2024. While deal volumes have fallen sharply, deal sizes have remained fairly stable.
This is shown in the new Venture Pulse Report from KPMG, for which global venture capital investments are regularly analysed. With in-depth analyses and insights, our report offers valuable insights for investors, entrepreneurs and decision-makers worldwide.
Geographical diversity of VC investments in Europe in the first quarter of 2024
The geographical diversity of VC investments also remained strong in the first quarter, with eight countries in the region recording at least one financing round of over USD 100 million. These countries include Sweden, the Netherlands, France, Germany, the United Kingdom, Spain, Israel and Italy.
Focus on AI, cleantech and ESG investments in Europe
While AI attracted the largest share of investment globally, cleantech investments accounted for many of the largest deals in Europe in the first quarter of 2024. These include financing rounds from Sweden-based H2 Green and Alternative Energy Equipment, German company Sunfire and French company Electra.
ESG topics also continue to attract the interest of VC investors, partly due to regulatory requirements.
Florian Merkel
Director, Tax
KPMG AG Wirtschaftsprüfungsgesellschaft
Slight decline in VC investments in Germany due to ongoing macroeconomic uncertainties
VC investments in Germany fell slightly from USD 1.9 billion in the fourth quarter of 2023 to USD 1.8 billion in the first quarter of 2024, as macroeconomic uncertainties continue to affect both start-ups and companies.
Despite the stabilisation of interest rates and a decline in inflation, many VC investors in Germany remain cautious due to high energy costs, concerns about global competitiveness, increasing geopolitical uncertainties and a lack of exit opportunities.
Venture capital trends to keep an eye on in the second quarter of 2024
VC investors in Europe are expected to remain cautious in the second quarter of 2024. This is because they are closely monitoring the ongoing macroeconomic challenges and geopolitical issues, including uncertainties related to upcoming elections in the US and Europe.
Investments in cleantech and ESG reporting are likely to remain strong given the increasing regulatory requirements in this area. Defence technologies will also continue to gain in importance. Interest in cryptocurrencies has also started to recover, which could lead to an increase in investments in the next quarter.
You can find all the trends, facts and figures on global venture capital activity in the first quarter of 2024 in our Venture Pulse Report, which you can download here.
