European venture investment halved in 2001

Biopharmaceuticals sector excels in the face of overall decline, according to Ernst & Young/VentureOne Venture Capital Survey

Investment in European venture-backed companies dropped by half from 2000 to 2001, when €9.6 billion were raised in 1,801 deals, according to the first joint global venture capital survey by Ernst & Young and VentureOne.

The number of financing transactions in Europe fell by over one-third, and the value of those companies receiving financing declined significantly: the median pre-money valuation of European venture-backed companies fell from €8.7 million to €7 million. While steep, these declines are less than those seen in the US, where investment fell 65%, transaction volume fell 52%, and pre-money valuations declined from $25 million (€28.5 million) to $16.7 million (€19 million) during the same time period.

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(source: Ernst & Young)

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