Despite rising global inflation, geopolitical tension, and general economic concerns, European venture capitalists remain bullish.
- European venture capitalists’ optimism is surprising given their traditional conservatism in comparison to American venture capitalists.
- Investment in 2022 may surpass record investments that reached around $103.5 billion in 2021. Late state investment is comparable to last year.
- Investors in both Europe and the U.S. have continued their fundraising efforts this year.
Why it’s news
European investors are anticipating that the market will return to pre-pandemic levels. The continent is also home to a growing number of startup hubs, allowing for a quickly growing market with near constant new investment opportunities.
Even with general optimism, European investors won’t be throwing cash at every company looking for support.
Investors are likely to remain choosy with their selections. For example, companies that rely on discretionary consumer spending aren’t likely to do well in a time when consumers are tightening their budget, making the company a poor investment for venture capitalists.
Additionally, investors may also choose to focus on current investments to ensure they are strong enough to make it through the downturn rather than building up new opportunities.
Investment markets aren’t likely to return to the same levels seen in 2021, but the markets are on the way back to a more normal level.
In Europe and elsewhere VC firms are diversifying their investments into such sectors as clean energy as well.