As global markets have cooled, VCs have tightened their purse strings.
That goes even for top-tier VCs: the number of first-time cheques into European companies written by some of Europe’s top Series A funds has plummeted, Sifted analysis has found.
That’s based on analysis of the European deal count of the seven most prominent European-HQ’d VCs: Accel, Index, HV Capital, Balderton, Lakestar, Creandum and Northzone, according to Dealroom’s EMEA Prominence ranking of Series A investors. Sifted looked at both first-time investments and investments in existing portfolio companies and asked all the investors to check our numbers.
Founders say deal count matters: it can be an indication of how serious an investor is when they take a meeting. And, given how many investments aren’t announced at the time they occur, it’s often hard to know how active VCs really are.
Who's most active?
As an absolute number of total deals — both new and existing — HV Capital has written the most cheques so far this year, with 17.
HV’s new deals this year have included virtual kitchen and food delivery startup LANCH and Polyteia, a data platform for governments.
“With the close of our most recent fund which targets startups in all growth phases, we continue to be active investors and deploy capital across Europe, as we still see incredible opportunities in the ecosystem in all sectors,” HV partner Jan Miczaika says.
HV closed its ninth fund with €700m last month to back companies from seed to Series C.
Balderton has also been active this year, doing eight new deals, some unannounced. The firm has backed lab-grown bacon startup Uncommon and French startup Brigad.
Who has pulled back the most?
Excluding angel cheques, Lakestar has only done two new deals this year. That includes leading healthtech company Nelly's €15m Series A round announced this week.
“A growing trend among founders and startups is an increase in prudence. This means that the return cycle for a Series A round is getting longer as businesses are more efficient with their capital, with lower levels of cash burn than in previous years. This lengthening timeline is one of the reasons fewer deals have been executed,” Stephen Nundy, partner at Lakestar, says.
“We remain focused on our investment thesis, where we are seeing opportunities across all the sectors we are excited about. In particular, our teams are seeing a high level of deal activity at seed stage.”
Index has only publicly announced two new deals this year — open-source vector database Weaviate's $50m Series B and telehealth platform GetHarley’s $52m funding round.
Given that we're nearly halfway through the year, only HV, Balderton and Northzone look on track to write as many cheques as last year.
