European tech tracks to watch

Balderton

While the high-level investment trend in innovative technology is similar between the U.S. and Europe, digging deeper exposes interesting differences. Europe seems to be punching above its weight in some predictable areas like banking and hospitality while being weaker in historically strong areas like fashion and insurance.At a high level, the trend of early-stage technology deals over the past couple of years is pretty simple. We see continued, increasing investment across all stages into early-stage technology companies. As you’d expect, more is invested in the U.S., but the EU continues to hold pace, albeit at a lower level:

Digging deeper reveals that, as you’d expect, some kinds of early-stage tech companies are seeing more deals than others. Our second chart shows which early-stage tech verticals have the greatest investment velocity globally – that is, the rate at which investment (measured as number of deals) increased in the second half of 2014. We’ll measure in number of deals rather than dollars invested going forward in this post, as that allows us to include multiple stages without diluting smaller companies from mega rounds.

Our next chart lays out which verticals are seeing an unusually high level of deals in Europe. As you can see, areas like virtual reality and travel are seeing comparatively more deals in Europe than other sectors. Could these be Europe’s boom verticals?

Our final chart uses a quadrant to compare, vertical by vertical, the volume of deals being done globally with the volume being done in Europe. In the very top right, you have the kinds of early-stage tech businesses that are hot globally and also seeing a high level of deals in Europe.At the bottom right you have the kinds of early-stage tech businesses that are hot globally, but are seeing comparatively less deal activity in Europe, so these verticals might be where Europe is not doing as well in terms of producing attractive early-stage tech companies.

READ MORE ARTICLES