Venture Capital in Europe: fragmentation inhibits investments

Compared to the United States, the venture capital market in Europe is far smaller and more fragmented, said Philipp Ständer, researcher at the Jacques Delors Institut – Berlin, in an interview with INSIDE, the magazine of the federal association of German start-ups. “We can’t speak of one coherent market for venture capital so far”, said Ständer. “Start-ups in the UK, Germany and France collect between 66 and 87 percent of their VC investments in their own national markets. Investments from other European states only account for about 20 percent in the UK and Germany and a mere10 percent in France. This fragmentation leads to a situation in which start-ups face severe difficulties in scaling up. Most of the financing rounds in Europe are comparatively small, predominantly because most VC investors show a strong homes bias..”

You can read the full interview in German here.