Go4Venture, a fund raising specialist for European technology companies, is hailing the end of the venture capital slump in Europe, based on an increase in its industry activity indicator. Go4Venture’s Headline Transactions Index, a compilation of VC investments in European technology companies, rose sharply in March 2005, with a leap of almost €50m over the value of transactions recorded the previous month, and equivalent to a 35% year-on-year increase.
European market activity seems to be following the US trend where both investment activity and VC fund raising levels have now been up for more than a year.
Ian McLoughlin, Go4Venture’s director in charge of the Index, said: “€48m of headline transactions were recorded in March, pushing the Index to its highest ever level since its inception close to three years ago. After a strong start in Q1, 2004 was ultimately a disappointing year, with activity falling back to 2003 levels by the end of the year. During 2004 we noticed sharp monthly ups and downs suggesting a market sputtering
to recovery. It is comforting to see that 2005 started at the same level as 2004 and it is now well ahead of where we were in March last year, with a year-on-year increase of close to €40m, or 35%”.
According to the research, other qualitative factors suggesting the market is on the mend include a number of European VC funds which have completed or are on their way to closing successful fund raisings. These include Advent Venture Partners, Banexi Ventures, Benchmark Capital, Index Ventures, Sofinnova Partners and Wellington Partners.
Another positive factor is the public markets revival, with London’s Alternative Investment Market (AIM) welcoming a number of technology entrants in Q1 2005 and Euronext’s AIM equivalent Alternext making its debut in May 2005.
Go4Venture’s European Technology VC Headline Transactions Monthly Index® is an index compiled by Go4Venture on a monthly basis as an early indicator of the evolutions of the market for VC funding for European information technology companies. The Index tracks the deals reported in major publications and news feeds.