SOURCE: Earlybird

Earlybird

July 27, 2011 12:00 ET

Venture Capital Report Finds Performance in Europe Outgaining Those in U.S.

Earlybird Venture Capital's 40-Page Presentation Spotlights Active Investment, Improved Performance of Last 24 Months

MUNICH, GERMANY--(Marketwire - Jul 27, 2011) - Earlybird Venture Capital today issued "Turning Venture Capital into Wisdom: Why returns in Europe are now outpacing the U.S.," a 40-page report demonstrating that European venture capital funds have actually generated comparable or better returns than their U.S. counterparts over the period of the last two years. The report is released amid fevered debate that has taken place regarding the venture capital returns secured in Europe vs. the United States, as well as the spirit of entrepreneurism in both regions.

Earlybird Venture Capital analyzed data from the European Venture Capital Association (EVCA), Dow Jones VentureSource and its own internal fund to come to the finding that, despite the ongoing dampened perception of European venture capital, the last 24 months have seen a better quality of returns for European VCs than for their U.S. counterparts. The report suggests that, after 20 years playing catch-up to the U.S., European venture capital truly has reached an inflection point, with better real performance among key indicators for the first time in history.

Some of those key indicators include:

  • Proportionally, Europe venture capital is now producing higher exit multiples than U.S. venture capital, as well as higher capital efficiency.

  • Europe has seen some $15 billion in venture-backed liquidity events during the past two years. This represents half of the $30 billion in U.S. venture-backed liquidity events during the same period, yet occurring with only one fifth of the venture funding.

  • Since 2005 there have been an impressive 14 venture-backed exits of European start-ups larger than $1 billion -- among them Luxembourg's Skype, Swedish open source company mySQL, British sports betting platform Betfair and German online mortgage broker Interhyp.

  • European VC-backed pre-and post-IPO performance also now matches or exceeds that of U.S. counterparts, while a higher share of European VC funds demonstrate top U.S. quartile performance.

"Clearly the message that venture capital is alive and well in Europe hasn't gotten out. European entrepreneurs and VCs, for one, are notoriously shy about promoting themselves," commented Jason Whitmire, Partner at Earlybird. "The reality is, there are great venture opportunities in Europe, even if not all deals are making headlines."

The report is available in its entirety as a Slideshare presentation at http://www.slideshare.net/earlybirdjason/earlybird-europe-venture-capital-report.

ABOUT EARLYBIRD VENTURE CAPITAL

Earlybird Venture Capital is one of the most successful European venture investors. Currently, Earlybird manages EUR 430 million in assets for an international investor base. Earlybird invests in innovative, fast-growing technology enabled services companies with outstanding management teams and high growth potential in international markets. Earlybird's portfolio currently includes 25 companies and a number of category-leading cloud services, consumer Internet and digital media firms such as Azeti, B2X Care, CrowdPark, Madvertise, Carpooling.com, Nfon, Peak Games, Simfy and Ubitricity. Since its inception, Earlybird has invested in over 70 companies that have sparked some of the most significant innovations in business and technology. In addition to several successful trade sales, Earlybird has led six companies to an IPO at four different European exchanges (Interhyp, Tipp24, Wilex, Esmertec, entelos, and NoemaLife). Further Information is available at www.earlybird.com, on our blog: www.blog.earlybird.com, on Twitter: EarlybirdVC or Facebook: Earlybird Venture Capital.