European venture capitalists are investing less money in fewer companies, mirroring a trend seen in financing for American start-ups, according to a report Tuesday by Dow Jones VentureSource. Venture capital firms in Europe invested in 167 young companies in the second quarter, 42 percent fewer than in the period last year. Venture dollars invested declined 35 percent, to $1.3 billion. The quarter was the worst since at least 2000, when VentureSource started tracking European data. "If there is a prolonged lag in investment and if the liquidity environment continues to be constrictive, then it is concerning for the venture capital industry," said Jessica Canning, director of global research for Dow Jones VentureSource. The information technology and health care sectors had the biggest drop, while investments in energy companies reached new highs. In Britain, long the leader in European technology innovation, venture investment fell 49 percent last quarter, while Germany vaulted to the head of the list because of a single large investment in a solar technology firm. The European slowdown tracks similarly tight conditions in the United States. Investments by United States venture firms fell 19 percent in the second quarter.
Venture capital firms in Europe invested in 167 young companies in the second quarter, 42 percent fewer than in the period last year. Venture dollars invested declined 35 percent, to $1.3 billion. The quarter was the worst since at least 2000, when VentureSource started tracking European data.
"If there is a prolonged lag in investment and if the liquidity environment continues to be constrictive, then it is concerning for the venture capital industry," said Jessica Canning, director of global research for Dow Jones VentureSource.
The information technology and health care sectors had the biggest drop, while investments in energy companies reached new highs. In Britain, long the leader in European technology innovation, venture investment fell 49 percent last quarter, while Germany vaulted to the head of the list because of a single large investment in a solar technology firm.
The European slowdown tracks similarly tight conditions in the United States. Investments by United States venture firms fell 19 percent in the second quarter.
