Venture Capital activity in Europe has proven resilient to the COVID-19 crisis, according to a report by Pitchbook. Which certainly makes sense, given the long term horizons in the minds of investors when vetting deal flow in the venture space. Investors are looking beyond the COVID-19 crisis in terms of growth, customer and sales bounce back plus profitability. Once again, tech based investment activity takes the lead. Not surprising given the overwhelming focus on technology as the facilitator of what is the “new normal daily life”. Early stage software companies supporting the B2B space, in terms of virtual work possibilities, cybersecurity, Fintech and analytics performed well.
Corporate Venture Capital Fuelling Ahead
The report shows, activity in the Corporate Venture Capital space fuelling ahead as large Corporates push to form long term partnerships with Start-ups. Their motivation, simply to stay ahead of technologies, or Start-ups, which may be on the way to disrupt their industry, with the added benefit of forming synergies.
Fundraising Flowing at a Steady Pace
Fundraising was also seen to be flowing at a steady pace. As the world changes, the VC space is adapting, with an even more pronounced focus on ESG based investments. Funds targeting companies adhering to ESG initiatives managed to make their close during 2020. The report predicts, this will develop into a key investment strategy over the next decade. Stakeholders are increasingly interested in the impact of business and investment on the wider economy, populations and society.
Q4 Outlook
What is more, is that this steadfast trend in VC activity is predicted to continue into the last quarter of 2020. This, even with the very real prospect of practically another European wide lockdown as the second wave of COVID-19 seems to make an appearance.
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