Almost 40% of VC funding rounds in Europe went into UK or Ireland-based firms in Q2 2017.
According to Pitchbook’s European Venture report, investment into the UK remained in line with historical levels, despite other regions looking to capitalise on the potential movement of startups away from London following Brexit.
The report goes on to note that the UK’s ability to attract investment remained largely unaffected by Brexit, but notes that the true impact of the vote may not have been felt yet.
“The opportunity may still yet present itself, as the full reaction to the UK leaving the EU may not be realised until the exit has been fully negotiated and agreed upon.
“A hard Brexit will have more consequences for the industry, especially if more restrictive immigration laws are enacted, as those would push foreign entrepreneurs to other VC hubs,” it adds.
Paris: One to watch
The report found that European venture capital investment decreased following the second quarter of this year, but highlights Paris as one of the continent’s burgeoning technology hubs.
According to the data, Paris has seen its deal count and overall deal value increase for three consecutive years – increasing to €1.1bn invested across 247 rounds in 2016.
The French capital, it adds, may have largely flown under the radar as a VC hub in Europe, but the findings show that it received the second most VC deals of any European capital in the past three years, and is likely to increase its proportion in the coming quarters.
Despite Berlin often touted as London’s main competitor in Europe, Pitchbook’s report says that Paris’ 89 rounds this year are almost 15% higher than the German capital’s total.
As much as Brexit’s potential impact has caught the attention of many of the UK’s entrepreneurs, the report argues that Emmanuel Macron’s presidential election victory is set to boost the French venture capital scene further.
“The president is looking to boost the industry by making the country more business friendly through loosening regulations and is also looking to lower the corporate tax rate and the capital gains taxes, which could prompt more angels to get into the business of investing.
“Along with those changes, Macron has also opened the country’s arms to immigrants looking to start businesses,” it concludes.