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October 24, 2007
Mind The Gap: US versus Euro VCs Investment Trend
The latest CalibreOne Index, which tracks deals in the US and Europe (including Israel), reveals a widening gap in third quarter between us and Europe in terms of amount invested in startups.
There has always been a disparity between the two regions, with the US typical investing around two or three multiple of what is invested in Europe.
But this past quarter the gap widened. The US went from investing 2.6 times in the first quarter, to 4.7 times in the second, upt to 5.1 times the total amount invested in third. And this desptie some hefty-sized VC rounds in Europe like Viagogo $30M and $27M for Ubiquisys and $27M for Dibcom, $34M for DailyMotion and $22M for Nemerix in the quarter.
The ratio of the total number of investments remains somewhat similar, so what that means is that US firms are raising more capital per round.
It could be that there are several startups that are European in origin and are now categorized as US ventures because of the Delaware-flip thing that a lot of VC-backed startups here do. An example of a European startup that is now categorized as a US one in action is Oanda, which actually raised the largest round in the US index at $100M. One of its founders is still based here in Zurich, for example.
But that kind of thing doesn't change the fact that US ventures raise more money, especially if yours is competing for market share with a US-based one that raised four five times as much capital.
We'll be opening another pack of Red Bull to keep us alert as we keep score here on the sidelines to see if Europe's leaner scrappier techcos can pull out ahead of their richer rivals.
CalibreOne is an executive search firm with a flair for VC-backed startups. Its site is CalibreOne.com
Posted on October 24, 2007 10:46 AM | Posted to News And Updates | Permalink
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