Predictions on the State of VC in Europe 2015

Predictions on the State of VC in Europe 2015

Rather than merely spouting my own views on what’s in store for the VC sector in Europe this year, I decided to solicit the opinions of my more omniscient peers. Here are the thoughts from several top-tier European VCs:

Marc Fournier, Serena Capital, France: 2015 should be another great year for technology and venture capital. We should see confirmation of several emerging markets in the mobile app and marketing space. Large e-commerce actors should consolidate their leadership positions and other consumer driven innovations will be arriving on the market. From the CES in Vegas, I am eager for this year to start.

Sean Seton-Rogers, ProFounders Capital, UK: I see Google beginning to falter a bit…people searching directly into Amazon and mobile apps, the launch of Facebook’s off-platform advertising networks, the EU regulators, etc will all start to take their toll. Very large consolidation… not just large companies buying startups, but large companies buying large companies. Any of the following could be in play: eBay, PayPal, Twitter, Yahoo, Stripe…

Floris van Alkemade, Solid Ventures, Netherlands: With another 1B$ company being created by the humble Dutchmen (Adyen), The Netherlands will get more and more attention by some smart international VCs.

Carles Ferrer, Nauta Capital, Spain & UK: I believe the next two to three years may be very productive for European tech startups and hence VC investors with the ability to identify the right targets. In my view, Europe is able to produce some leading edge tech companies with a fraction of the equity needed in the USA and if they develop well, can migrate at the appropriate time to the USA where the market is faster and bigger. Europe has great talent and some VCs have in their portfolios game-changers, that with a capital efficient mode have grown consistently and can lead whole segments. Two of our companies, Scytl (electronic voting and election management systems) and Brandwatch (social media listening and intelligence), are great examples. Born in Europe (Spain and UK respectively), both have become industry leaders in EU and USA and with consistent 70%-100% growth on less than $10M in investment before reaching substantial scale. We at Nauta really believe in capital efficient software plays and think that over-funding is a real negative in early-stage, hence VCs following that path may not maximise return likelihood.

Herman Delatte, Big Bang Ventures, Belgium: 2015 will be a strong year for exits cfr vintage 2004-2007 in Life Sciences and IT. New funds will start with former entrepreneurs getting in the game (very good sign). Money will come from the following sources: sovereign wealth funds will become more active in venture capital, e.g. Norway, UAE as they have no choice; Europe & national governments will start to recognize that mainly VC investments create new jobs; Savings of taxpayers will be partially redirected into VC initiatives via P3 initiatives.

John Chapman, Pontis Capital, Germany & Austria: Much of 2015 will continue to be a good year for exits. The appetite of major corporates for acquisitions, and their ability to pay high prices, will be driven by strong equity markets. While this could well come to an end later in the year for the broad mass of VC-backed firms, the interest in companies with technologies enabling market disruption will remain. Germany has a number of these, some of which have been bootstrapped by repeat entrepreneurs.

Patrick Polak, Newion Investments, Netherlands: The State of European VC in 2015 is a positive one, as far as I am concerned. Because of positive developments and positive exits in the past 24 months, technology M&A is currently hot and valuations are high. VCs who invested 36 months earlier will benefit from this positive environment. As a result the startup scene is hot, and a lot of things are happening. However, entrepreneurs raising money have high expectations on valuations – based upon excellent exits of “peers” in the last years – which lead often to disappointments. Many Angel investors step in at high valuations too, which lead to conflicts later, when VCs have to take the next funding rounds. Going forward, VCs will need to be extremely disciplined to invest the right amount of money at the right valuations and at the right moment.