VC Funding In Europe Rose In Q3 2023 Favouring Late-Stage Startups

In the third quarter of 2023, European startups raised €15.6bn in VC funding — a 28% increase quarter over quarter.

The findings are based on an analysis by Crunchbase, which also unveiled that the fresh capital has mostly favoured late-stage rounds. In contrast, funding for seed and early-stage companies hit its lowest points since Q3 2022.

Specifically, late-stage funding doubled quarter over quarter, reaching €10bn in total. Notably, VCs invested large sums in the sustainable energy sector, with big rounds raised by Sweden’s H2 Green Steel, battery manufacturers Northvolt and Verkor, and London-based battery storage startup Zenobe Energy.

Μeanwhile, seed funding added up to €1.3bn, down from €2bn last year. Alongside its 30% year-over-year drop, it also fell by 25% quarter over quarter. Similarly, early-stage companies saw another low at €4.3bn with the largest amount of capital invested in Series A.

On the bright side, European startups have managed to raise a bigger proportion of global venture capital compared to last year. Their share reached approximately 23%, while VC funding in North America remained flat. Europe’s AI companies also accounted for close to one-fifth of the sector’s global funding, representing 11% of the region’s total capital raised in the past quarter.

Overall, Europe’s highest capital injection was concentrated in the UK, followed by Sweden, France, and Germany.

Michiel Kotting, partner at Northzone, a London-headquartered multi-stage VC firm, said, “the pullback in venture has made a huge difference in how capital-efficient a startup needs to be.”

Source: The Next Web