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European VC Report 2020: Strong Fourth Quarter Closes Out 2020

Illustration of coin-operated robot/2020-Europe.

The European venture markets held up in 2020, despite the slowdown in funding in response to the pandemic in the first quarter and leading into the second quarter of 2020, according to Crunchbase data. Funding to European startups last year totaled $40 billion, down a mere 4 percent from 2019 at $41.8 billion. This marks the second-highest funding amount by year into European startups over the past decade. 

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The funding pace picked up in the fourth quarter, typically a slower funding period, when VC to European startups totaled $11.8 billion — the strongest quarter over the past two years. Europe’s late-stage venture funding peaked in the fourth quarter.

Global funding comparison

Venture capital raised by European startups represented 13 percent of global funding in 2020. Both Europe and the United States have gained share in the past few years as funding in China was down significantly in 2019. (Note, this 13 percent does not include European startups now headquartered in the U.S. with operations and development teams in their country of origin.)

Funding by stage

Seed funding to European startups has hovered around $1 billion per quarter since the beginning of 2019. During 2020 more than 3,500 unique companies raised funding at the seed stage totaling $3.7 billion compared with $4 billion for 2019. (Note, funding counts will likely increase as more seed fundings are recorded retroactively after the end of the quarter.)

Crunchbase data shows European startups raised $3.8 billion in early-stage funding during the fourth quarter, down from the third quarter. Comparing quarters for early venture funding over the last two years, the second quarter is the lowest at $3.1 billion and the third quarter tracks the highest at $4.5 billion. 

All told, more than 1,200 European companies raised funding at the early-venture stage in 2020 at $14.9 billion, the same amount raised in 2019. (Early-stage funding includes Series A and B rounds as well as funding between $3 million and $15 million without a designated series. )

Late-stage and technology-growth funding grew in the fourth quarter by 41 percent quarter over quarter, representing a peak funding quarter over the past two years. More than 300 European companies raised late-stage funding in 2020 of $21.4 billion, down 6 percent from 2019 at $22.9 billion. 

Large fundings

In 2020, 14 European companies joined the European unicorn board, which now lists 74 companies. Newly listed unicorns in 2020 include Arrival, valued at $3.3 billion, and MessageBird, valued at $3 billion. Cazoo, Hopin, Octopus Energy and Oatly also joined and are each valued at or above $2 billion.

The pace of funding rounds of $100 million and above increased in the fourth quarter of 2020, with 23 companies raising rounds at that mark. In the third quarter, 20 companies raised rounds above $100 million. The transportation, energy and fintech sectors led in late-stage funding. 

By country

Despite concerns over Brexit, the United Kingdom raised 37 percent of European funding in 2020, coming in at $14.9 billion. Germany, France and Sweden were the next three leading markets, raising a total $14.3 billion in funding in 2020, although that was down slightly from $14.9 billion in 2019. 

Other European countries raising more than $1 billion in funding in 2020 included Switzerland, Netherlands, and — for the first time — Denmark and Finland. Countries close to the $1 billion mark in funding include Belgium and Spain. Leading cities by investment totals include London, Paris, Berlin, Stockholm, Copenhagen, Amsterdam, Oxford, Helsinki and Munich. 


Mergers and acquisitions of venture-backed European startups totaled $11.8 billion in 2020, up 9 percent from 2019 when M&A activity totaled $10.9 billion. The largest exits in the fourth quarter include biotech company NBE-Therapeutics, a developer of cancer therapies that was acquired by Boehringer Ingelheim for $1.2 billion. On-demand beverage delivery company flaschenpost SE was acquired by Dr.Oetker for $1 billion, and cloud communication company Voxbone was acquired by Bandwidth for $527 million.

In conclusion

European funding in 2020 came close to the funding peak of 2019. Exits were up, though not massively, in 2020, in contrast to the U.S. markets

All in all, the story of venture investment in Europe over the last decade is one of massive growth: Funding to the continent at the start of the most recent decade totaled $6.5 billion, per Crunchbase data. By the close of the decade, that number had grown more than sixfold to $40 billion with eight countries each raising more than $1 billion in 2020. 


The data contained in this report comes directly from Crunchbase, and is based on reported data. Data reported is as of Jan. 13, 2020.

Note that data lags are most pronounced at the earliest stages of venture activity, with seed funding amounts increasing significantly after the end of a quarter/year.

The most recent quarter/year will increase over time relative to previous timelines. For funding counts, we notice a strong data lag, especially at the seed and early stages, by as much as 26 percent to 41 percent a year out.

Please note that all funding values are given in U.S. dollars unless otherwise noted. Crunchbase converts foreign currencies to U.S. dollars at the prevailing spot rate from the date funding rounds, acquisitions, IPOs and other financial events are reported. Even if those events were added to Crunchbase long after the event was announced, foreign currency transactions are converted at the historic spot price.

For M&A transaction analysis, we include venture-backed companies and exclude companies that previously went public. 

Glossary of funding terms

Seed and angel consists of seed, pre-seed and angel rounds. Crunchbase also includes venture rounds of unknown series, equity crowdfunding and convertible notes at $3 million (USD or as-converted USD equivalent) or less.

Early-stage consists of Series A and Series B rounds, as well as other round types. Crunchbase includes venture rounds of unknown series, corporate venture and other rounds above $3 million, and those less than or equal to $15 million.

Late-stage consists of Series C, Series D, Series E and later-lettered venture rounds following the “Series [Letter]” naming convention. Also included are venture rounds of unknown series, corporate venture and other rounds above $15 million.

Technology growth is a private-equity round raised by a company that has previously raised a “venture” round. (So basically, any round from the previously defined stages.)

Illustration: Dom Guzman

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