The European venture capital market experienced a significant upturn in the second quarter of 2024. Investments rose from 13.9 billion dollars in the first quarter to 17.8 billion dollars in 1,869 transactions, mainly due to an increase in mega deals. Particularly noteworthy were financing rounds by companies such as Wayve (1 billion dollars), Abound (999.6 million dollars), Mistral AI (650.6 million dollars) and Monzo (621 million dollars).
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, companies and decision-makers worldwide.
AI sector attracts major investments
Artificial intelligence (AI) remained a key attraction for VC investors in Europe. In addition to the aforementioned deals, DeepL from Germany (USD 300 million) and H Company from France (USD 220 million) also received substantial financing. The investments covered both companies that develop core AI technologies and those that use AI to improve business models.
Florian Merkel
Director, Tax
KPMG AG Wirtschaftsprüfungsgesellschaft
Cleantech and alternative energies in focus
Another focus was on alternative energies and cleantech. Notable financing rounds in this area included Highview Power (USD 381.9 million), Elcogen (USD 168 million) and Tree Energy Solutions (USD 152 million). In light of the EU Sustainability Reporting Directive (CSRD), interest in regtechs in the sustainability sector is also growing.
Cautious optimism on the IPO market
The IPO market in Europe showed the first signs of recovery. The London Stock Exchange recorded positive activity, including the successful IPO of Raspberry Pi (USD 211 million).
Great Britain records doubling of investments
In the UK, VC investments doubled compared to the previous quarter to 6.9 billion dollars. In addition to the aforementioned mega deals, there was also robust interest in pre-seed and seed financing:
Germany saw stable VC investment of $2.2bn, with several funding rounds over $100m in areas such as AI, semiconductors and aerospace. ESG companies and certain fintech sectors remained attractive, while interest in cryptocurrencies declined.
In Austria, VC investments rose to 283 million dollars, the highest level since the beginning of 2022. AI-based solutions were particularly in demand and attracted international investor interest
The Nordic region experienced a decline in VC investments to USD 1.3 billion, the lowest level since mid-2020. Nevertheless, early-stage financing as well as investments in energy, cleantech and deep tech solutions remained robust.
In Ireland, VC investments rose to $239 million, led by a $110 million financing for the biotech company SynOx Therapeutics.
Ausblick: KI und Cleantech bleiben Treiber trotz Unsicherheiten
Investors are expected to continue to focus on AI, energy and cleantech in the third quarter of 2024. Despite political uncertainties such as the upcoming US presidential election, there is growing optimism for a possible revival of the IPO market. In addition, interest in regtechs is likely to increase in connection with the imminent introduction of the Digital Operational Resilience Act (DORA) in the EU.
Trends, facts and figures on global venture capital activity in the first quarter of 2024 can be found in our Venture Pulse Report, which you can download here.
