UK revealed as most popular destination for venture capital investment in Europe

Investments in consumer services industry rise, despite overall drop in European deals

The UK received more venture capital investment in 2012 than any other European country, according to data collected by VentureSource. Despite this, the report reveals that investment into UK businesses dropped by 10% from 2011 to 295 deals, valued at …1.4bn – a 5% decrease on last year. Similarly, the total number of investments in European countries declined in 2012, with venture capitalists investing …4.4bn in a total of 1,074 deals, a 9% decrease on the amount of capital invested in 2011 and an 11% decrease on the number of deals completed. The number of acquisitions of venture-backed firms also fell, with 30% fewer European firms exiting via mergers and acquisitions throughout 2012 than 2011.

Nonetheless, some sectors saw an increase in investments throughout 2012, such as the IT industry, which secured …156m in 2012 – a 40% increase on last year.

The consumer services industry also experienced an investment boost, reporting a 13% rise on total investment from 2011 to …1.3bn.

With more than half of the consumer services sector’s funding going to social media, entertainment and online shopping companies, the industry received more capital than any other sector in Europe in 2012, surpassing healthcare.

Formerly the number one industry for investment, healthcare experienced an all-time investment low in 2012.

Similarly, the number of investments into energy and utilities firms declined by 37% and while financial services companies experienced a 43% increase in both investment and deal activity from 2011, the decline in business support sector meant that the business and financial services industry experienced an overall fall in investments in 2012.

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