This article delves into the key findings from market reports on European VC activity in this year's first quarter.

For founders, this analysis provides valuable insights into investor sentiment and the factors influencing deal flow. Founders can use this knowledge to refine fundraising strategies, prioritize cost-efficiency, and potentially adjust product development timelines to better align with current VC priorities.

On the other hand, investors can use these findings to identify emerging trends and adapt their investment strategies accordingly. Now, let’s unpack the data!

If, in 2023, we had mixed feelings while looking at the European venture capital landscape, after the first months of this year, we are slowly beginning to see a brighter sky.

While overall funding declined significantly year-over-year, a resilient number of startups secured investment. This trend continues this year, with positive news for founders looking for fundraising in 2024. Still, while some reports show the decline has stopped, others still flag declines, especially in seed and Series A investments.

What is clear is that we are still experiencing a volatile economic climate, and securing funding for startups is shifting along with the new paradigm. We're seeing startups explore alternative financing methods, including tapping their own communities for funds or looking for more flexible investment vehicles - such as syndicates with rolling facilities - to extend their runway and sustain growth.

European seed and angel investments in Q1

European seed-funded startups secured $1.7B in funding during the first quarter (Q1) of 2024, spread across more than 900 companies, according to Crunchbase data. This amount falls short of the $2 billion mark consistent since the third quarter (Q3) of 2023.

Source: European Venture Funding by Crunchbase

European early-stage investments in Q1

Early-stage funding in Europe grew ahead of late-stage financing in Q1 2024. According to the same data published by Crunchbase, early-stage startups raked in a total of $5.4B invested across more than 300 companies.

This trend isn't new, with early-stage investments surpassing late-stage ones for three out of the past five quarters as funding markets tightened throughout 2023.

Source: European Venture Funding by Crunchbase

European late-stage investments in Q1

Late-stage European funding, including Series C rounds and beyond, reached $4.6B across 84 companies in Q1 2024. Among some of the largest rounds in this category was Picnic, an online grocery app based in Amsterdam.

Picnic raised $388M, with Edeka, the Germany-based supermarket chain, and the Bill & Melinda Gates Foundation as main investors.

Source: European Venture Funding by Crunchbase

It is more than encouraging that early-stage investments in venture capital have not only been growing but also maintaining a stable path, encouraging both founders of companies to apply for a fundraising round and emerging fund managers to support these companies looking to grow.

Source: Europe Tech Update – Q1 2024

European VC funding

After a period of slowdown and resilience, venture capital investment is growing again in Europe. According to Dealroom, European startups raised $13.7B in Q1 2024, up 5% year on year, and Europe is tracking a similar path to 2023, behind only the outlier years of 2021/22 and ahead of 2019/2020.

Source: Europe Tech Update – Q1 2024

VC deal activity in Q1

Dealmaking shows signs of strength, and there are expectations that the total deal value could end up higher than in the 2023s, according to Pitchbook.

Source: European Venture Report Q1 2024

Investors are more focused on sustainability

Cleantech also showed strong performance, with deal value in Q1 2024 already surpassing half of the total for 2023, reaching €6.8B compared to €11.6B for the entire previous year. The trends highlight the importance of sustainable and innovative sectors within the European investment landscape.

While Artificial Intelligence (AI) dominated global investment in Q1'23, Europe saw cleantech emerge as a leader in large deals. This focus on cleantech aligns with the growing importance of ESG factors for VC investors, partly driven by regulatory pressure.

In Q1'24, most EU member states agreed to the Corporate Sustainability Due Diligence Directive. Once implemented, this directive will require large companies operating in the EU to scrutinize their supply chains for ESG concerns, including human rights and environmental impact.

Source: EYOND RETURNS: Venture and growth investing fuel sustainability & societal change

VCs and LPs focus on making a positive social and environmental impact. According to the recent European Women in VC analysis, sustainability is in tune with their personal values, and 88% prioritize it because of that. Additionally, one in three VCs and LPs use the UN’s Sustainable Development Goals (SDGs) to guide their investments.

Source: EYOND RETURNS: Venture and growth investing fuel sustainability & societal change

So, ESG will continue to be a major driver of investment decisions going forward. To keep up with investor trends, startup founders should consider making it a part of their pitch when approaching investors for a possible fundraising round, as we already see that 65% require or will require their portfolio companies and funds to report on ESG performance, according to the same report by European Women in VC.

Top 3 European regions in VC deals

Source: Europe Tech Update – Q1 2024

The UK, France, and Germany continue to lead as the top venture-funded countries in Europe, maintaining their strong positions in attracting venture capital in the first quarter of 2024.

Source: Europe Tech Update – Q1 2024

Additionally, a special mention goes to the Netherlands, which has been rapidly growing. The country has grown the fastest in 2024, driven by large rounds for Picnic, Mews, Moove, and Datasnipper.

Top 3 industries in VC deals

If we had FinTech as one of the European investors’ favorite sectors in the previous years, we now see different trends at the beginning of 2024.

European venture capital investors now have a higher interest in the Energy sector, looking to achieve energy independence after Russia invaded Ukraine and the conflict against the EU economy, and following a growing interest from investors in more sustainable solutions, according to The State of Union, European Comission’s latest report.

Source: Europe Tech Update – Q1 2024

Other future leading segments in European startups 2024 include Electric Mobility, Hydrogen, and Industrial Technology.

Source: Europe Tech Update – Q1 2024

However, while we are happy and optimistic to see the fundraising process going toward a more positive trend, we must remember that we are only moving on to the year's first half. So, we don’t have much market visibility if the trends continue by the end of the year!

We recommend you watch these market reports every quarter and one on our blog, as we publish a summary of the most important trends every three months.

European active investors

Q1 2024 fundraising trends indicate resilience in the market. This pace of activity suggests that, if sustained, 2024 could match the fundraising levels in 2023.

According to Pitchbook, the first quarter saw capital distributed across 47 vehicles, implying that the total number of funds closed by the end of 2024 could exceed those of the previous year. UK and Ireland led the region in the number of fund closures, accounting for 27.7% of the total, with France and Benelux following closely at 25.5%.

Source: European Venture Report Q1 2024

These early signs point towards a market recovery, affirming earlier predictions that fundraising levels would recover from previous troughs and align with the totals seen in 2023.

Another factor worth mentioning is that emerging firms dominated fundraising in Q1 2024, a shift from the trend in 2022 and 2023, where experienced firms attracted the majority of capital due to their proven track records during volatile times.

In the first quarter of 2024, emerging firms accounted for 57.6% of the capital raised, reflecting a significant shift towards new players in the market. Additionally, 14 of the 47 fund closures were by first-time funds, indicating that new firms continue to emerge despite challenging financing conditions.

New VC funds raised in 2024

If you are a founder looking for a fundraising round this year, follow which venture capital funds are still raising capital because it directly impacts your chances of securing investment.

Venture capital firms actively raising funds are more likely to seek new investment opportunities, giving you a better chance to pitch your startup and secure funding.

Understanding which funds have available capital can help you target your efforts effectively. Moreover, knowing these funds' investment focus and stage preference allows you to align your pitch to their specific interests, increasing your likelihood of a successful fundraising round.

To help you kickstart this process, we have prepared a list of the new venture capital funds raised in the SEE, DACH, and BENELUX regions with fresh capital in 2024. Check it out below!

New VC funds raised in SEE

Here is a list of new venture capital (VC) funds raised in 2024 in Central and South-Eastern Europe (CEE):

• OTB Ventures --> Closed its second $185 million deeptech fund, focusing on Series A investments with up to a 10% allocation for seed investments.
• Practica Capital --> Launched its third and largest fund at €80 million, targeting seed-stage investments in tech startups in Lithuania, Latvia, and Estonia, offering up to €3 million initially and ongoing support up to €8 million.
• GapMinder --> Launched a €80 million venture capital fund, GapMinder Fund II, which invested in seed and late-stage tech companies from Romania, Moldova, Serbia, Croatia, Slovenia, and Bulgaria.
• 2C Ventures --> Launched its initial fund with a target size of €50 million, supporting early-stage startups in the Baltic and Nordic countries, focusing primarily on the Estonian market, that develops renewable energy, waste reduction, water management, circular economy, and other cleantech solutions.
• Full Speed Ventures --> Launched its second €50 million technology fund, investing €1-2 million as a first ticket and continuing to support companies across CEE with a strong connection to Poland.
• SMOK Ventures --> Closed its second $25 million fund, planning to support up to 35 pre-seed and seed startups from Central and Eastern Europe and the region’s founders abroad, with checks ranging from $100,000 to $1 million.
• 1991 Ventures --> Launched a £15 million industry-agnostic fund for Ukrainian and CEE early-stage startups, aiming to invest in more than 40 companies.
• Innovation Factory (WUT IF) --> Launched a $5 million fund, aiming to back 18 deeptech startups originating from universities across Poland.

If you are a founder looking for fundraising in this geographical area, these funds continue to invest and support the growth of startups in the SEE region, particularly in sectors like DeepTech, CleanTech, and HealhTech.

New VC funds raised in DACH

Here is a list of new venture capital (VC) funds raised in 2024 in the DACH region:

• NGP Capital --> Closed its second fund, focusing on deeptech investments, with a target size of $185M.
• Earlybird --> ​​The fund has closed its €173M second health-tech-focused fund.
• Speedinvest --> The Vienna-headquartered venture capital firm has announced the final closure of its latest fund at €350M.
• World Fund --> The Berlin-based fund has closed a €300M first fund, aiming to make 25–30 investments into European climate tech startups over the next few years.

If you are a founder looking for fundraising in this geographical area, these funds have fresh capital to invest and support the growth of startups in the DACH region, particularly in sectors like DeepTech, FinTech, and HealhTech.

New VC funds raised in BENELUX

Here is a list of new venture capital (VC) funds raised in 2024 in the BENELUX region (Belgium, Netherlands, and Luxembourg):

• VIVES IUF --> Raised €38M in capital and looking to invest up to €7M per portfolio company, ranging from pre-seed to Series B, focusing on human health, AgTech, and engineering projects from Belgium and neighboring countries.
• Syndicate One: Completed an initial €4.8M close of its debut fund, with more than 70 investors joining.
• DeepTechXL --> Raised €110M to invest in photonics, complex mechanical engineering, semiconductors, and quantum computing.

If you are a founder looking for fundraising in this geographical area, these funds continue to invest and support the growth of startups in the BENELUX region, particularly in sectors like DeepTech, FinTech, and HealhTech.

Find the right investor and financing vehicle for your round

If you want to connect with these investors or check out other active investors in the region, check out the European VC Network list covering venture capital funds from the SEE, DACH, BENELUX, as well as other regions.

At the same time, we strongly encourage you to consider more flexible funding options for your next round, such as SeedBlink's syndicate infrastructure with its rolling facility.