New data published by venture capital analysis firm, Dealroom shows that European startups raised over $2.3 billion more from investors in the U.S. between January and October this year than they did in the same period last year.
In a conversation with CNBC, Alex Kayyal, the head of Salesforce Ventures International explained the upswing in European investments, stating that because of the pandemic, it doesn’t matter if “a company is 30-minutes away ... or an eight-hour flight away.” Kayyal continued, “in many ways, because we’re all remote, it levels the playing field.”
A new trend of European startups boasting large funding rounds led by U.S. investors has many taking notice of the burgeoning companies ripe for investment.
Swiss startup, Skribble announced in May this year that it raised over €1 million during a Series B funding round. In October, Swedish peer-to-peer (P2P) lending startup Lendify secured $115 million in funding from Insight Investment. Berlin travel start-up GetYourGuide recently revealed that it raised €113 million in a funding round led by U.S. group Searchlight Capital Partners. While London fintech app Revolut raised $80 million in July from TSG Consumer Partners, a private equity firm located in San Francisco.
However, Europe still lacks a software firm worth hundreds of billions of dollars. In the U.S., there’s several and the likes of Alphabet, Apple, and Microsoft have even tipped a trillion-dollar market cap.
European startups are likely to receive a record $34.3 billion in investments this year, according to investment firm Atomico, with 19% of funding rounds including an American firm.
New research has also found that San Francisco and London have become two of the world’s leading hubs for venture capital investment in impact tech—tech solutions that address one or more of the 17 UN’s Sustainable Development Goals—followed by Paris, Berlin, Stockholm, Shanghai, and Beijing.
Funding rounds for London impact companies involving North American investors in 2020 include a $118 million growth equity round into Arrival by BlackRock, an $80 million Series B round for COMPASS Pathways and a $25 million Series C funding round for Tractable.
Last year, against the backdrop of Brexit, the inbound interest could feel like a surprise, but in 2020 all the rules have been thrown out and the unexpected is just part of the deal.