Today’s Insights 🔍 

• Global Startup Investments

• The Silicon Valley VC of Europe

• European vs US Investments

• % of Foreign Investors in Europe

Read Time: 2.5 minutes

Global Startup Investments 📊 

European startup investments rose to $45B, marking an 18% increase since 2020, outperforming all other key markets. This growth has largely been driven by European government investments which account for 26% of total startup investments.

Europe's investment climate is defying global downturns which can be attributed to strong regional confidence and a less cyclical investment market brought by government initiatives such as the EU Horizon Fund.

Weekly Startups News 🧑‍💻

Inflection AI co-founder hired by Microsoft
Mustafa Suleyman, co-founder of Inflection and DeepMind, has been hired by Microsoft to lead their consumer AI division.

Europe's startup patent hotspots in 2023
Germany lead the European patent applications, with more than 25k filings - 12% of the total filings in Europe, followed by France and Switzerland.

European startup exits hit record high
Last year, a total of 31 VC-backed payment businesses exited the private funding market.

Startup feature
 The Silicon Valley VC of Europe

Sequoia Capital, a leading VC firm in Silicon Valley with over $85bn in capital and an early investor in Apple, Google, Airbnb and Stripe, opened its first European office in 2020.

Despite a previous lack of a physical presence, the firm has been a key investor in several major European startups, first investing in Klarna in 2010 which now holds a $6.7bn valuation. 

The success of several European startup investments by Sequoia includes the recent IPO of Unity Software (Denmark), as well as the $10.2bn valuation of the AI startup UiPath (Romania), which both explain why the US-based VC is expanding its presence in Europe.

With a high-growth startup market in Europe and an increasing talent pool across major cities, large firms such as Sequoia are leading the trend of foreign VCs looking towards Europe for the next startup unicorn.

European vs US Startup Investments ⚖️

European seed-stage funding has seen a notable uptick, with the median funding for early-stage rounds increasing from $0.6 million for 2019 to over $1 million for 2023.

Though still trailing behind their US counterparts, European seed investments are gaining momentum, highlighting the willingness to provide early-stage ventures with greater amounts of capital.

Growth of Foreign Investors 💹 

European startups are drawing record levels of interest from North American and Asian investors, signalling confidence in its innovation-driven markets and increasing talent pool across European startup hubs.

The broadening investor base reflects Europe’s strengthening position as an innovation hub, and is a key driver behind larger investment rounds and a less restrictive investment market for startups.

SearchVentures Insights

Europe’s startup ecosystem in 2023 exhibited notable growth, with total investments increasing by 18% to $45 billion in 2020. This expansion, mostly propelled by the EU’s Horizon fund, highlights Europe’s emerging prominence in the global startup landscape. Notably, sustainability and technology sectors have seen advancements, supported by EU policies, despite global economic uncertainties.

The European market is attracting increasing attention from foreign investors, especially from North America and Asia. Meanwhile, median round sizes in seed-stage funding are rising. These developments position Europe as a dynamic and resilient hub for startup innovations and investment, offering a stable and promising landscape for both investors and founders.

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Odin Lund & Hariprasad Mohandas