• $8 billion extra spent vs last year's Q1 backed by a surge of few hundred deals and extra investors at the table
• 70+ mega deals (100M+) vs 43 last year
• Q1 saw $13bn+ of extra powder and the Euro market is evolving in spite of the Ukraine war and public market turmoil
• Tiger and Insight dominate the late stage, Speedinvest, Seedcamp and Kima top the early stage + don't forget about YC

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First quarter of the year is done with and thought it'd be fitting to have a quick look at the numbers, deals and notes to make sense of all of it.

• The numbers: for Q1 2022, we have tracked 1500+ deals worth $27 billion from the Euro private market involving 3000+ investors. As always, there's a reporting lag particularly at the early stages - we have a backlog of a few hundred deals as I write this and standard disclaimers apply i.e. equity only, no debt, no grants etc etc - but think it is a good data sample for making some big picture observations.

For comparison - in Q1 2021 we have on our books roughly 1700 deals worth $19 billion and made by 2700 investors.

That means we had 10% more active investors and extra dealings worth 8 billion compared to the same period last year. Not very surprising - competition is as high as ever, deals have become more expensive as a consequence, and the seed/series A/series B deployment cycles shortened to as low as a couple of months, compared to a standard 18-24 months.

• The mega deals - this quarter we had 71 transactions made at a check value of 100 million or higher. Last year we only had 43 such deals. In absolute numbers: they commended $15 billion Q1 2022 vs $9.7 billion Q1 2021.

This is probably the biggest change in terms of market dynamics that European private market has seen in the past years. That is because there was virtually no late stage dealflow in Europe until a couple of years ago and now there's business to be made.

Then, also historically speaking, a $100 million capital raise would involve decent series C or later transactions, with companies preparing their way to liquidity events. In the past 12 months, 100 mill has become the high end of a series B or an obscene series A. Truth be told, there are some dynamic markets with startups managing to show spectacular growth rates -> those growth rates combined with more investors interest = higher markups valuations at earlier stage of a startup.

Speaking of higher competition - last year we tracked 170 investors active in capital raises of $100 million or more. That number is 50% higher this year at 250 investors. 

• Also notable:

- the public market turmoil from the end of 2021/start of 2022 + war in Ukraine didn't seem to affect too much the late stage Q1 deal flow of the year. There may be a correlation lag, it's true, and those deals were worked out a few months prior their announcement. But - the European private market trajectory is up and to the right as the general consensus is that it is still an undervalued ecosystem, with diamonds in disguise at very reasonable prices compared to the US counterparts. And this US/Europe price alignment will continue, particularly at even earlier stage.

- the past few weeks showed a bit of slow down in the pace of closing down deals. It is likely the Ukraine war and the general macro effect - we're heading to an economic crisis in an hyperinflationary environemnt, and investors are wary in spite of sitting on record high amounts of money. This limbo will continue as long as there will be no closure on the war front i.e. we reach an equilibrium point. However, the society digitalisation process will conttinue and tech/software spending in general will be steady in spite of a bad macro environment (yes, software is eating the world).

- the first quarter also saw a lot of fresh powder that's been made available for European startups - we have tracked 73 new funds that closed in total a whopping $13 billion available to deploy in Europe. Add that to the money raised last year, again at record levels for Europe - this money has to be put to work pronto because the cost of capital is high in this business.

• Early stage is where it's at. If the late stage shows bubbly activity, wait to see the early stage numbers:

At <100 million levels (an overpriced series B):
- 1300 deals | $11.6 billion | 2900 investors - in Q1 2022
vs 
- 1500 deals | $9 billion | 2650 investors - in Q1 2021

At <20 million levels (an overpriced series A):
- 1120 deals | $4.2 billion | 2460 investors - in Q1 2022
vs
- 1400 deals | $4 billion | 2400 investors - in Q1 2021

At <10 million levels (an overpriced seed):
- 990 deals | $2.4 billion | 2200 investors - in Q1 2022
vs
- 1300 deals | $2.4 billion | 2180 investors - in Q1 2021

At <5 million levels (a *kind of normal* seed):
- 820 deals | $1.2 billion | 1788 investors - in Q1 2022
vs
- 1144 deals | $1.3 billion | 1915 investors - in Q1 2021

At <1 million levels (pre-seed):
- 370 deals | $110 million | 620 investors - in Q1 2022
vs
- 658 deals | $130 million | 945 investors - in Q1 2021

What do those numbers tell us? Look at the delta variations as the transaction range value goes down. 

The series B follows the mega deals pattern of increased attention as mentioned above, 10% more investors and $2.6 billion more spent. 

At series A, it starts to level out a bit and it does look overheated - this is where the competition is happening right now. There's roughly the same number of investors and the same money but fewer deals than last year, because they were more expensive. Why - well, at this point startups have already been a bit de-risked and show a more clear path to explosive growth and portfolio profitability. Add to that some late stage investors crossing over at earlier stage either because they want to hedge or simply because the late stage is too expensive for them

At seed/earlier stages (5 million or less), there's fewer investors active - at this stage the risk is higher as the ability of evaluating an early stage startup requires more advanced skills from investors. You need more conviction and experience to understand founders and their stories than covering your ass in numbers in order to pass the deal through the investment committee.

• Who is who by stage.

In terms of deals closed at 10 million or higher, we had almost 110 investors that did at least one deal a month (i.e. 3 deals for the trimester). That is exactly 10% from the 1100 backers that were involved in *at least one* $10M+ transaction Q1 2022. The breakdown:

- 109 investors did min 3 deals or more
- 54 investors min 4 deals or more
- 31 investors did min 5 deals or more

Who are they?

Tiger Global - 19 deals
Bpifrance - 17 deals
Insight Venture Partners - 12 deals
Eurazeo - 11 deals
SoftBank Group - 10 deals
Octopus Ventures -10 deals
Accel - 10 deals
Tencent - 9 deals
Index Ventures - 9 deals
Coatue - 8 deals
Highland Europe - 8 deals

The list includes investors that followed on on their earlier transactions. Please note that 5 out of 11 are not European investors.

At earlier stages (i.e. fundraising deals closed at lower than $10 million) we had 144 investors that did at least one deal a month - out of a total of 2200 that did at least an investment transaction in the first quarter of 2022. The breakdown:

-  144 investors did min 3 deals or more
-  63 investors min 4 deals or more
-  29 investors did min 5 deals or more

The top:

Y Combinator - 44 deals (38 of which were part of the winter acelerator program)
Bpifrance - 27 deals
Speedinvest - 18 deals
Seedcamp - 17 deals
Kima Ventures - 15 deals
Haatch - 13 deals
High-Tech Gründerfonds -12 deals
APX - 12 deals
Almi Invest -11 deals
Octopus Ventures - 10 deals

Please not that there's not a single non-European investor in the list, with the exception of YC, which is a special case but that should be included in any conversation about early stage invstments in Europe.

The full list with the most active investors both at late stage and at early stage, as well as the angel investors is available here ($)

• Last and not least, we also had a look at geographical breakdown of the investors ($):

- Active investors in the UK
- Active investors in France
- Active investors in the Nordics
- Active investors in DACH
- Active American investors in Europe

 

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