A report by Dow Jones VentureSource has a pessimistic conclusion: venture capital firms have invested significantly less money in European start-ups during Q2 than during the same period last year – the amount declined with 35 percent, to $1.3 billion. They’ve invested in 167 young companies, which is 42 percent fewer than last year. This year’s Q2 was the worst since at least 2000, when VentureSource started tracking European data.
The worst sector of all? Information technology. I assume that concerns our beloved Internet industry as well. The British IT industry, former leader, had to take the hardest punch, venture investment declined with a stunning percentage of 49.
Ram Srinivasan, a venture partner with European firm Wellington Partners explained to The New York Times what’s causing the slowdown in funding: “Europeans are wary of investing in start-ups until the United States markets stabilize and economic and political uncertainty recedes”.
The US venture investment also declined, yet not as sensationally as in Europe. The investments fell with 19 percent.