2020: the year in which Europe will be Queen of Venture Capital

NewsFromThePlatform | March 2nd, 2020

The Italian VC market has a global value of more than 700 million euros, and is now the ninth VC market in Europe in terms of size. It may not seem like the best ranking position, but it is actually a big success if we consider where we started from. And now, at the beginning of 2020, it is time to take stock: how well did VC perform last year in Italy and globally, in terms of both volumes and quality? What should we expect for the year that has just begun?

P101 wants to answer these questions starting from the numbers that have been collected from the main sources in the industry.

The Italian market

After the turning point of year 2018, when Italy experienced a significant change of pace – the value of the VC market rocketed from 3 million euros of the previous six years to 600 million euros – 2019 marked a significant but more contained growth. Indeed, a study by StartupItalia! reports that, last year, 723 million euros were invested in Italian start-ups or start-up founded by Italian entrepreneurs.

This value was distributed over 74 rounds, including 124 crowdfunding operations that were worth more than 55 million euros. To be noted is the increase in million-euros transactions: among them, for example, BrumBrum (€20 million capital increase), the platform that compares all the car sales and rental offers; a similar transaction for Talent Garden (€44 million); and that of Cortilia (€8.5 million round).

In short, we can say that the Italian VC market is closing, albeit slowly, the gap with Europe and with the rest of the world, both in terms of total volume and in terms of size of single deals.

The European market

As we at P101 have state before (here, for instance), the value of the European VC market is growing constantly. For example, according to Kpmg research Venture Pulse, in the last quarter of 2019  investments in European start-ups amounted to 9 billion dollars, which brings the total amount of the year to 39 billion dollars. This number is particularly relevant if we consider that the German economy experienced a slowdown and that Brexit generated an environment of uncertainty. Million-dollar deals, such as that of Deliveroo ($ 575 million) are increasingly frequent.

Not surprisingly, during the year, some new Unicorns were born  in many European countries that never stood out for VC investments, such as Lithuania (Vinted), Luxembourg (OCsiAI), Spain (Glovo), Sweden (Northvolt) and Switzerland (Numbrs, Acronis), marking an absolute record of 18 new companies that are valued over one billion dollars. Summer was the most prolific period for Unicorns: six of them saw the light, according to the latest report by Dealroom. Furthermore, in 2019 there was a big increase in the investments coming from Asia and the USA, representing 40% of the total invested amount in European start-ups. The biggest ten deals were worth about 30% of the whole amount. Italian start-ups are yet not on this list and, in general, more than two thirds of the market are companies coming from the United Kingdom, Germany, France and Israel.

The rest of the world

According to the latest PitchBook-NVCA report, overall, the market of Venture Capital hit a new record in 2019, at $140 billion – five times higher than the value of all the previous 10 years. A sign of the industry’s big moment.

Furthermore, according to Kpmg calculations, the average size of the deals also significantly increased, from €4.1 million in 2017, to €5.8 million in 2018, and finally to €8 million euros in 2019.

Worldwide, 110 new Unicorns were born: the United States have the lion’s share, with 71 new Unicorns (15 just in Q4), including Ripple, Bright Health, Duolingo, Scopely, and Next Insurance.

At the end of the year, the United States were still leading the global VC market, having invested 34.2 billion dollars in 2,215 deals. The Asian market had a slight recovery compared to the third quarter of the year, but continued to slow down if compared to the boom of 2018 (18.7 billion dollars were invested in Q4 2019).

There is, undoubtedly, a global growth trend, and in this trend Europe and Italy are playing an increasingly key role. We expect Italy’s position to become stronger in the years to come.