The European venture ecosystem is booming

Ross Morrison, Partner of Adam Street Partners, gave the opening speech at Superventure 2021 in Berlin yesterday. Adam heads the venture capital investments in Europe and Israel at a firm that has been investing regularly in venture capital in the last 40 years. A committed expert investor that has seen several technology and financial cycles through the years.

Technology is everywhere. There is not a single sector that is not being strongly impacted if not disrupted by it: the winners of todays - and more and more tomorrow - are those that will be able to use it properly. The speed and scale at which all of this is happening is unprecedented, new business models have been created with huge scale in a very short amount of time, generating impressive technology global leaders.

For long term investors being exposed with such companies is a key component of an investment portfolio. Tech has proven to be resilient and anti cyclical of an asset class (think COVID), balancing risk and performance for investors.

However getting in tech is not easy. These days, venture backed companies stay private much longer: 7 years to M&A and 10 years to IPO. The value is shifting from public to private market. Today the private market is the best way to access tech. We have seen 597 mega rounds against 221 IPOs in European tech, whereas 338BN in assets are public and 537 BN are private.

The good news is the Europe has arrived.There has been a regular growth trend in the European startup market beginning in 2009. A trend that changed gear after 2015. Europe has created 220 tech winners (1bn+ companies) in the past 20 years, the majority of them in the last 10, coming from 55 different cities. The size of exits has grown significantly in 2021 and so far we have seed 597 mega rounds against 221 IPOs and European venture capital is delivery performance similar to US (2,5x against 3x on average).