Enterprise & Deep Tech VC in Europe & Israel 2021
A data-driven look at a record-setting year
We’re delighted to release the 2021 edition of our report on Enterprise & Deep Tech VC Investment in Europe & Israel.
As always, special thanks to my colleague Andrew Poesaste for the tireless work over many months gathering, cleaning, and — most importantly — thinking about this data to make sure it is accurate and useful.
As we have all along, we are still inputting all the data manually and struggling to categorize every company in a meaningful way. We have, for example, the only dataset I’m aware of that accurately distinguishes between ML tooling, data tooling, DevOps, dev tools, and IT infrastructure. It’s certainly the only dataset I trust at this point.
The scale of the increase in VC activity in Europe and Israel was truly mind-blowing. In 2021, VC investors pumped over $139B into European and Israeli technology companies, across 4,005 transactions. Compare this to $45B across 2,744 transactions in 2020.
When you dig deeper into the data, some interesting observations emerge:
- The biggest increases in VC volume happened at the later stages. Early-stage activity is growing but not as fast.
- Corporate VC activity has been steadily declining.
- Round sizes are up dramatically.
- Enterprise and Deep Tech (E&DT) continues to dominate investment activity, accounting for ~67% of investment rounds.
- Israel leads in terms of VC per capital, followed by Estonia, Sweden, and the UK.
- The German VC market has shown dramatic growth. In 4Q21, more VC dollars flowed into Germany than into Israel — the first time Israel was not in one of the top two slots. The UK, which trailed Israel slightly in the first part of 2021, jumped to first place in the second half.
- Investment across Europe is up massively. The fasting growth region is Eastern Europe, which saw investment volume quadruple and the number of transactions nearly double.
- US VC involvement continues to run at about 14–15% of transactions, with a bias towards later stage. US firms were only in 7% of early venture deals, but 33% of growth rounds.
- US VC activity is still mostly concentrated in Israel, the UK, and Germany.
- The most active US funds in Europe & Israel were Insight, Accel, Index, Bessmer, Lightspeed, and Sequoia. In the early stage, Accel and Index are the clear leaders.
- The mix of sectors in which VCs are focusing their attention continues to evolve…but for that level of detail, you’ll have to look at the actual report!
You can view and download the entire report on Docsend, or view the entire report embedded in this medium post.
