Venture Capital finds opportunity in crisis with record year

Published: February 8, 2021

The coronavirus pandemic sent entire industries spiralling last year as lockdowns made revenues vanish overnight. Venture capitalists saw an opportunity, and deal value in the sector hit a new annual record according to new data.

European venture capital deal value in 2020 reached €42.8bn across 9,341 deals – a near 15% increase year on year from the previous record set in 2019, according to PitchBook, the financial data and software company.

“We were particularly surprised by the number of records being broken,” Nalin Patel, EMEA private capital analyst at PitchBook, told EMEA Finance. “At the start of 2020, when lockdowns spread to Europe, we thought [the market] was going to be depressed.”

It is not just deal value. Fundraising by vehicles based in Europe reached a record high last year, hitting €19.6bn in 2020, equal to a 35.2% growth year on year. Deals that involved corporate venture capital, those completed by dedicated venture capital divisions of large established companies, also reached a record high last year.

Venture capital’s funding drive has continued into this year. Ireland and UK firm Frontline Ventures raised a €70mn seed fund in early February to invest in B2B start-ups across Europe that are looking to move across the Atlantic and set up in the US.

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