VC cash for Europe's startups hits highest level since 2001

Rocket Internet has led a bumper quarter for capital flowing into European companies.
Written by Liam Tung, Contributing Writer

Rocket Internet's investments in food delivery startups made the first quarter of this year the biggest for European companies since 2001.

The German startup factory helped propel investments in European companies to €2.6bn for the quarter, according to Dow Jones VentureSource's Q1 2015 report. European companies overall raised 41 percent more than they did in the previous quarter spread over 354 deals - a figure that's down five percent quarter on quarter.

Rocket Internet was the biggest single force in European investments over the quarter, ploughing €503m into three food delivery service firms: Delivery Hero, Grocery Delivery E-Services USA, and Foodpanda.

Combining its stakes in Delivery Hero, Foodpanda, and other investments, the company in February launched its Global Online Takeaway Group. The startup builder subsequently upped its stakes in those businesses as well as buying smaller startups in the sector, typically but not exclusively serving the German market.

According to Dow Jones, investments in consumer services dominated European VC activity during the first quarter of this year, accounting for 50 percent of the value of investments, followed by financial services at 17 percent and IT at 16 percent.

In total, businesses in consumer services raised €1.3bn through 103 deals, marking a four-fold increase on the €326m raised by the sector in the previous quarter. Companies in the IT sector landed €436m through 75 deals, up 65 percent quarter on quarter, topped by a €100m round for French Internet of Things company Sigfox involving Telefonica, NTT DoCoMo, SK Telecom, and others.

German-based companies were the top destination for VC funding, accounting for €921m, followed by UK companies, which attracted €866m, and French companies, which landed €292m.

Despite the bumper quarter for European investments, Dow Jones noted that venture capital fundraising on the continent dropped by a quarter compared with the last quarter of 2014, while exits via either mergers, acquisitions, or IPOs were a down to a fifth of the level seen one quarter ago.

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