For all that VCs tell Sifted reporters that things are picking up, it hasn’t quite shown up in the data yet. There were 1,379 equity funding rounds in the first quarter of this year, according to Sifted data (which includes undisclosed rounds and excludes deals with grants or a debt component). Across those deals, startups raised €12.3bn in Q1.
That figure is down from last quarter, with roughly €13.8bn worth of deals in Q4, based on Dealroom data.
Although AI continues to be a lively area, the top sector for dealmaking in Q1 was the somewhat less sexy B2B SaaS cohort. It’s an area that continues to prove popular with investors, with 358 deals raking in €1.6bn in Q1, according to Sifted data. Those deals include Dutch cybersecurity and insurtech subscription service Eye Security’s €36m Series B round led by J.P. Morgan Growth Equity Partners along with Bessemer Venture Partners in March; and Danish whistleblower software company Formalize’s €15m Series A last month. And VCs are keeping their eye on a host of other B2B SaaS startups in 2024.
But, as predicted, it’s climate tech deals that raised the lion’s share of funding in Q1 — nearly €3.7bn. Climate tech also ranked as the second-most-popular sector with investors in Q1 with 288 deals. That includes the Bill Gates-backed CemVision, which recently raised €10m to create a more sustainable cement using recycled industrial waste from the steel and mining industries; and Copenhagen-based EV charging infrastructure startup Monta, which raised an €80m Series B from investors like US-based Energize Capital and Denmark’s Export and Investment Fund early in the year.
As Melina Sanchez, principal and VP of impact at climate tech VC firm AENU, told Sifted at the start of the year: “There is still dry capital in the first generation of climate VCs in Europe, and there is an increasing appetite from generalist VCs in climate as well.”
Geography-wise, the UK led the pack with 358 deals in Q1, followed by France’s 151. There’s also been a flurry of deal announcements in Germany in recent weeks: the country saw 144 deals this past quarter.
All in all, my conversations with investors seem to be getting more upbeat lately. As I recently reported, even late-stage deals seem to be warming up. Is it just an early bout of activity, or is a recovery in the books for 2024? And what other sectors do you see heating up so far in 2024? Let me know what you think.
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