London, Paris, and Amsterdam: Leading VC Ecosystems in Europe Amid Global Competition

According to the latest report by PitchBook analysts, London, Paris, Amsterdam, and Berlin stand out as the leading venture capital (VC) ecosystems in Europe. However, the region is still significantly lagging behind the robust ecosystems of the United States and Asia.

Overview of the Findings

The report evaluated global VC ecosystems based on their development and growth levels from Q3 2018 to Q2 2024. Analysts utilized data related to various factors, including deals, exits, fundraisings, and overall activity.

• Development Rankings: These rankings assess the size and maturity of the ecosystems.
• Growth Rankings: These rankings focus on short-, medium-, and long-term growth momentum.

Key Insights from the Report

European Cities in Focus:

• Top 20 Development Scores: Only London and Berlin made it to the top 20 in terms of development scores, as the list is predominantly occupied by US cities like San Francisco and New York, along with several prominent Asian cities, including Beijing and Shanghai.

Current Status of European VC Ecosystems

• London leads the European landscape with a total deal value of $99.7 billion, securing the seventh spot globally.
• Berlin follows at 17th place with a deal value of $30.2 billion, attracting approximately three times less investment than London.

Challenges Facing European VC

Despite the achievements of these two cities, they, along with other European locations, face several challenges in bridging the gap with their US and Asian counterparts. Key issues include:

• Lower Valuations: European startups often face lower valuations compared to those in the US.
• Smaller Funding Rounds: The average size of funding rounds in Europe tends to be smaller.
• Lower Exit Values: Exits in Europe are generally of lower value, which impacts overall investment attractiveness.

Nalin Patel, PitchBook’s lead EMEA private capital analyst, noted, “Value and volume statistics for locations tend to be lower in Europe than the US and Asia, which feeds into our Development Scores.” He attributed this disparity to the relative infancy of the European VC ecosystem and its fragmented nature, with smaller ecosystems dispersed across the continent.

Growth Potential in Europe

On a more optimistic note, Europe demonstrates stronger growth metrics. Seven European cities are represented in the top 20 growth rankings, including both emerging and more mature hubs:

• Lyon
• Prague
• Vienna
• Utrecht
• Dublin
• Amsterdam
• Barcelona

Fastest-Growing VC Ecosystems

In terms of country rankings, Switzerland has emerged as the fastest-growing VC ecosystem globally, with a total deal value of $19.9 billion and an exit value of $53 billion. Other notable countries include:

• Singapore
• United Arab Emirates
• Austria (4th place)
• Ireland (6th place)

Conclusion: The Future of Europe’s VC Landscape

The findings from PitchBook underscore the fact that while London remains a dominant force in both development and growth, it is the only European city that ranks in the global top 10 VC ecosystems. This indicates a landscape full of potential for growth in various regions of Europe, but it also highlights the need for addressing challenges related to investment values and ecosystem fragmentation.

Summary of European Top VC Ecosystems

• London – Global Rank: 7
• Berlin – Global Rank: 17
• Amsterdam – (Rank Not Specified)
• Paris – (Rank Not Specified)

As the European VC landscape continues to evolve, there are numerous opportunities for innovation and expansion, promising a vibrant future for entrepreneurs and investors alike.