During Q3’19, VC investment flourished across much of Europe, despite the ongoing uncertainty around Brexit in advance of the October 31st deadline and the changeover of key positions within the European Commission. Despite a decline in the number of VC deals, the amount of VC investment in Europe increased in Q3’19, setting a new quarterly record. At the end of Q3’19, year-to-date VC investment in Europe stood at XX, already above the annual record high of $26.6 billion set in 2018.

Despite Brexit concerns, UK companies continued to attract substantial investment during Q3’19, led by the $550 million funding round by Babylon Health. The amount of capital in the UK VC market remained strong with no sign of a slowdown in sectors where the UK is seen as a leader – such as fintech, healthtech, and biotech. In these areas, VC investors in the UK appeared to be more than happy to continue making investments in good UK companies with strong business models.

One relatively recent trend in the UK has been an uptick in B2B back-office solutions. During Q3’19, privacy and compliance software company OneTrust raised $200 million. Given the growing need for companies to become more efficient and to manage a more complex array of regulatory and compliance requirements, it is expected that this is an area that could see further investment in the future.

Trends to watch for in Europe

All eyes will be on the UK heading into Q4’19 given the rapidly approaching October 31st deadline. If completed, the outcome of Brexit will likely have a resonating impact on the region during the quarter and into 2020.

Across the region, fintech, mobility, healthtech and biotech are expected to remain very hot. Given the growing emphasis being placed on climate change and sustainability in the region, there could also be an uptick in investment in related technology areas.

Venture financing in the Europe 2012-Q3'19
Venture Pulse Q3'19 - Europe quote by Tim Kay
Venture Pulse Q3'19 - Europe infographic