The European Venture Capital scene is showing promising signs as we move through 2024. The year began with European startups achieving $11.8 billion (Crunchbase) in the first quarter, an increase from the last quarter of 2023.
Europe’s ecosystem now boasts 139 active unicorns (Pitchbook), with four new entries and just one exit during the first quarter of 2024. Half of these unicorns are in the SaaS sector, highlighting the enduring appeal of SaaS and suggesting a broader recovery in unicorn deal values.
Recovery Across Key Hubs
London, Paris, and Berlin continue to be central to Europe’s VC activity, the rising prominence of regional hubs such as the Netherlands and Portugal indicates diversification in the European VC landscape.
Driving Forces Behind Growth
Investment in European VC was driven by the financial services, healthcare and energy transition sectors. In France, government-led AI initiatives have significantly boosted the market. The mix of government support, regional talent, and increased investment aims to establish France as a hub of AI innovation.
Shifts in Investment Trends
European startups raised €57.1 billion in 2023, a decrease from €105.1 billion in 2022 (Pitchbook). This downturn appears to have impacted VC strategies, influencing both timing and growth approaches for portfolio companies. In 2024, agile VCs are adopting cautious yet proactive strategies to nurture their investments. A notable example is the Portuguese VC firm Shilling, whic launched an Opportunity Fund designed to propel top scaleups into Series A funding and beyond.
The Evolving Landscape
Market conditions may not lead to a surge in IPOs this year, it seems likely that an increase in mergers and acquisitions (M&A) could further stimulate growth. Sectors like AI, SaaS and green energy continue to innovate and attract significant investments.
Our Role
Alex Partners Executive Search works closely with European investment funds and their portfolio companies to shape senior leadership teams and hire individual contributors across sales, marketing, finance, product, operations and people teams. Through our partnerships we gain unique insights into the dynamics shaping the European technology and VC landscape.
Looking Ahead
The positive indicators in the early months of 2024 provide an optimistic outlook for the rest of the year. As the VC market in Europe continues to adapt and evolve, our commitment remains strong: to support our partners by ensuring they have the best leadership and talent to succeed.
