Among them, the most heavily funded and probably best known is Paris-based generative AI startup , which was in the spotlight today with the of a roughly $2 billion Series C round.

Semiconductor equipment manufacturer led the financing, joined by a long list of existing investors 1. The round sets a $13.7 billion valuation for the 2-year-old company, which is roughly double the level set in its June 2024 Series B.

The new valuation may sound middle-of-the-road by California benchmarks, with San Francisco-based now valued at $183 billion and reportedly eyeing the $500 billion . By European standards, however, Mistral’s latest fundraise and valuation are a historically big deal.

Record-setting AI round for Europe

Per Crunchbase data, Mistral’s Series C is the largest venture round ever raised by a European AI company.

No one else comes close. For perspective, here are the four next-largest AI startup equity financings, ordered by size:

• , $1.08B, Series C: London-based autonomous driving software developer Wayve raised $1.08 billion in a May 2024 Series C led by .
• , $1B, Series D: Celonis, a provider of “process mining” tools for businesses to find and fix inefficiencies, which has headquarters in Munich and New York, secured $1 billion in a 2021 Series D.
• , $700M, Series D: Helsing, a developer of AI-enabled autonomous systems for the defense industry, including drones, raised $700 million in a June Series D.
• , $600 million, initial funding: London-based Isomorphic Labs, a spinoff focused on AI-enabled drug detection, raised $600 million in an initial funding round led by .

For more deals, we put together a list of all European AI-related financings of $200 million or more from the past five years .

Mistral also stands out for its GenAI focus

Of the largest European AI rounds, it’s also noteworthy that Mistral is the only GenAI play near the top of the rankings. The company is marketing its offerings to enterprises, pitching its proficiency in content creation, data analysis and AI-assisted coding.

One thing the company is not marketing itself as is a bargain to investors. Looking purely at its valuation, however, it is certainly a lot cheaper than leading U.S. GenAI names.

Related Crunchbase query:

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A founder from Berlin recently told me she was “rethinking America” and focusing on Europe in light of ’s start to his presidency. I’ve heard variations of this sentiment since last November, and the perception is spreading that European founders are turning their backs on global expansion.

Some are. But if you look closer, a different story is emerging. Europe’s most ambitious founders are, in fact, more committed to growing internationally — in some sense, filling a vacuum left by our political leaders.

I believe now is a defining moment for European tech, and the companies that seize it and expand globally will be the ones who capture tomorrow’s biggest opportunities.

The European tech ecosystem has matured dramatically over the past decade, and it’s increasingly possible to build global champions from Europe. The best European companies are born global — a finding validated by research that my firm, , has conducted for the latest edition of “,” our definitive guide to U.S. expansion.

Whether it’s a team of two or 200, companies are planning for international scale, and expanding to the U.S., earlier than ever before.

The challenge isn’t about choosing a specific expansion strategy. Our research has identified several distinct archetypes:

• Magnets that pivot quickly toward the U.S. market where most of their revenue will come from;
• Pendulums that balance between continents by maintaining multiple centers of gravity;
• Anchors that keep a European base but establish targeted American footholds;
• Telescopes that capture significant U.S. market share without extensive on-the-ground infrastructure; and
• Transplants that jump wholesale to the U.S. from day one.

All these paths can result in category leadership. The bigger issue is ambition. Mindset comes first. Everything else follows.

The costs of delayed global thinking

After years of working with European startups, I’ve observed that companies from countries with relatively large home markets — Germany, France, Spain and the U.K. — can fall into what I call the “mid-sized country trap.” These markets are large enough to sustain initial growth, but create a comfort zone that can stifle global ambition.

This makes internationalization more difficult down the line, as neither product nor culture supports agile expansion into new markets. Startups can get locked into local optimizations, acquire technical debt and end up having to “restart” the company in each new geography. As a result, they become vulnerable to competitors who have built scalable products from the ground up and are able to move faster.

Cultural factors can reinforce the mid-sized country trap. Some European countries are inward-looking for historical reasons, but also because they’ve always been large enough to encourage the localization of foreign products and services — like films.

In France, where I grew up, all the foreign films and TV shows I watched were dubbed, so I rarely heard English growing up. While social media is hastening the decline of this linguistic isolationism, I believe it’s still one of the reasons companies from bigger European countries have been slower to adopt a global mindset.

There’s a lot to learn from the experience of founders from smaller ecosystems such as the Nordics and Israel. Tellingly, children growing up in Sweden and Finland at the same time as I had much more exposure to English.

Their markets were too small for Hollywood to invest in dubbing films, and so viewers’ expectations adapted accordingly — for the better. In small countries, limited domestic demand becomes a forcing function for global thinking. When your home market can only take you so far, you naturally build a company with scale in mind from the beginning.

Learning from outlier successes

Over the years, I’ve seen many successful startups turn small home markets into a competitive advantage. Founders like from and from always knew they had to run international companies to sustain growth.

Despite radically different sectors, business models and expansion strategies, both companies wanted to transcend national boundaries from the beginning.

Our research into breakthrough European companies reveals several elements common to their global success:

• They commit to the global opportunity early: The longer you wait, the more calcified your organization becomes around your domestic market. For example, the longer you stay in France, the more French speakers you hire, the more French is incorporated in your product … you get calcified.
• They build with English first: It’s often an advantage to establish English as the company language from day one, regardless of location. This seemingly small decision shapes everything from who you hire to how you design your product and documentation.
• They design for global scale: It’s worth investing early in systems and processes that work across markets, languages and regulations. This architectural decision pays enormous dividends as you grow. Based in the Netherlands, Adyen built a platform designed to handle the complexity of cross-border transactions in Europe from the start. By the time it approached the U.S., it had already solved far more complex problems than many of its American competitors.
• They can focus on sectors, not geographies: Sometimes, building deep expertise in a specific sector can trump step-by-step geographic expansion strategies. Israeli cybersecurity company targeted the most sophisticated cybersecurity customers globally, naturally leading it to the U.S. market and helping it achieve $100 million ARR in just 18 months.
• They nurture a global culture: It’s good to hire people with global mindsets and experience, as cultural alignment becomes more difficult the longer you wait. built international hubs across Amsterdam, Berlin, Yerevan, London and Copenhagen, and its Amsterdam office alone now represents over 100 nationalities.
• They understand market dynamics: Companies need to be clear-eyed about where their total addressable market, or TAM, lies, as well as strategic and specific partners and customers. For enterprise SaaS companies, the U.S. often represents more than 50% of global opportunity. For companies with strong network effects or significant European market share, a more balanced approach may make sense. established U.S. operations early to be close to platform partners like and , while keeping creative teams in Europe.
• They time their expansion thoughtfully: While early global thinking is crucial, the timing of market entry should align with the business model and archetype. A magnet company might pivot to the U.S. at Series A, while a pendulum company might wait until Series C. What matters is that your internal architecture — both technical and cultural — supports your eventual expansion. saw 75% of early customer interest from the U.S. despite being based in London — so it built its product with American customers in mind before CEO eventually moved it to New York.

At Index, we’ve seen that great companies aren’t defined by where they begin, but by how far they go. The most successful ones don’t wait until they feel “ready” to go international. They make themselves ready: They are born global.

is a partner at . In 2022, he moved from London to New York to expand the firm’s U.S. presence and partner with globally minded founders, whether they start in Europe or North America. Mignot backs early-stage founders building transformative products in healthcare, AI and financial services.

Editor’s note: This article is based on a new book from Index entitled ” which was released on July 1.

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Much of the slowdown was concentrated in the second half of 2022, according to an analysis of Crunchbase data. And over this past year, late-stage funding took the biggest hit, having grown more than threefold year over year in 2021.��

Despite the decline in funding, 2022 is still significantly higher than annual funding in prior years, with 2022 close to double the $46 billion in funding raised in 2020.��

Comparing Europe

It appears that Europe has weathered the downturn better than other regions. Venture funding did not fall as sharply as North America or Asia in 2022 — markets which each declined between 36% and 39%, respectively, year over year.��

Europe has grown from a smaller foothold over the past decade compared to these leading regions — and gained a greater share of funding in the past two years, as it shot up in 2021 and did not pull back as sharply in 2022.��

This increase as a proportion of global funding, however, might not hold up in 2023.��

“Europe in general has lagged behind the U.S.,” said from . “There’s a realistic chance that [the slowdown] might not really trigger fully in Europe until Q1 [2023],” he said, noting that Europe “fluctuates more with the markets. When times are good it goes up higher than expected, and I suspect when times are low it will go lower than expected.”

Quarterly pullback

So how does the slowdown in European venture funding look when broken down on a quarter-by-quarter basis during 2022? 

Funding for the fourth quarter was close to flat quarter over quarter and down 46% year over year.��

Again, Europe did not scale back as much as other leading regions, which declined from 58% to 63% this past quarter for the same time period.

Early stage suffered the most

The biggest cutback year over year for the fourth quarter was at early-stage funding in European startups — from $10 billion in Q4 2021 to $5 billion this past quarter. The dramatic drop at early stage is a signal that investors are adopting a wait-and-see approach to this market.��

According to Kanji, “There isn’t very much in the way of Series B, Series C, D right now in Europe. It’s really slowed down.” He acknowledged that investors seem to be oriented toward earlier fundings at seed.

Seed deals

The slowdown at seed-stage funding is also deepening, but less than the other funding stages. Seed declined by 37% year over year in the fourth quarter, totaling $1.8 billion. The fourth quarter of 2021 was around $3 billion for seed fundings.

Late stage already dropped

Late-stage funding was flat quarter over quarter, having already dropped in the third quarter. Late-stage funding was down 45% year over year for the fourth quarter, reaching $9.4 billion compared to $17 billion in Q4 2021.

European gains

Whether the gains that Europe has made over the past two years will hold will be interesting to watch in 2023.��

Late-stage funding grew threefold year over year in 2021. As global growth investors step back from investing, it is likely to continue to scale back in 2023.��

The venture community in Europe has raised more funding in recent years, primarily focused on early-stage funding. The influx of U.S. venture capital in the market — whilst they are here to stay — have the majority of their portfolio in the U.S. market, which could take some attention away from Europe in the shorter term.��

Whether the slowdown in Europe is lagging behind other leading markets and will show larger declines or is on a new footing will be interesting to watch in the volatile markets of 2023.��

Methodology

The data contained in this report comes directly from Crunchbase, and is based on reported data. Data reported is as of Jan. 4, 2023.

Note that data lags are most pronounced at the earliest stages of venture activity, with seed funding amounts increasing significantly after the end of a quarter/year.

The most recent quarter/year will increase over time relative to previous quarters. For funding counts, we notice a strong data lag, especially at the seed and early stages, by as much as 30 percent to 40 percent a year out.

Please note that all funding values are given in U.S. dollars unless otherwise noted. Crunchbase converts foreign currencies to U.S. dollars at the prevailing spot rate from the date funding rounds, acquisitions, IPOs and other financial events are reported. Even if those events were added to Crunchbase long after the event was announced, foreign currency transactions are converted at the historic spot price.

Glossary of funding terms

Seed and angel consists of seed, pre-seed and angel rounds. Crunchbase also includes venture rounds of unknown series, equity crowdfunding and convertible notes at $3 million (USD or as-converted USD equivalent) or less.

Early-stage consists of Series A and Series B rounds, as well as other round types. Crunchbase includes venture rounds of unknown series, corporate venture and other rounds above $3 million, and those less than or equal to $15 million.

Late-stage consists of Series C, Series D, Series E and later-lettered venture rounds following the “Series [Letter]” naming convention. Also included are venture rounds of unknown series, corporate venture and other rounds above $15 million.

Technology growth is a private-equity round raised by a company that has previously raised a “venture” round. (So basically, any round from the previously defined stages.)

Illustration:

Their value declined from $2.8 trillion in September 2021 to $1.2 trillion in September 2022, a drop of 57%. The average forward revenue multiple trended down from 17x to 6x in that timeframe. And average forward growth rate declined from 26% to 21%, a slowdown of around 20% in the growth rate.��

We spoke with , a partner at Accel based in their London office, on the latest report.��

“It’s not that suddenly all the growth has disappeared,” said Botteri of the 122 public cloud companies it analyzed. “The growth has slowed down a bit, but the multiples have been compressed a lot more than the growth has been impacted.”

Since the introduction of the cloud 15 years ago, around 40% of workloads have moved to the cloud and that share is projected to grow to 51% in 2025, according to the report.��

“If you follow the trend lines, we could have overcorrected,” said Botteri of the drop in value of public cloud stocks. Which is not to say it can’t drop further, but rather the growth trajectory for cloud SaaS businesses is still promising over the longer term.

M&A opportunities

Meanwhile, M&A activity for technology companies taken private has increased and valued these companies on average at higher multiples by 9x revenue and at a 33% premium compared to the current stock price, according to the report.

Companies that have been taken private include and by , by and by .��

Between private equity and public cloud companies, Accel estimates $330 billion from private equity and $440 billion from public strategics totaling $770 billion in dry powder for M&A transactions.��

Private cloud companies

The impact of this decline for private SaaS unicorn companies is that valuations are now closer to 10x average revenue.��

Since January 2020, around 122 European and Israeli unicorn-valued cloud companies have raised a total of $44 billion, a huge volume of funding concentrated in a small number of companies.��

The impact of all this funding means “they don’t need to raise right now,” said Botteri. “They need to digest that money” to invest and grow.�� 

Over 50% of these SaaS unicorn companies have more than $100 million in ARR.��

These companies are more likely to raise flat rounds rather than up rounds when they do so in the coming years, the report predicts, based on these revised valuation metrics and revenue projections.

The next Euro cloud 100

Highlighted in Euroscape 2022 are 100 cloud companies from Europe and Israel that are not yet unicorns, have more than $1 million in annual recurring revenue and are companies to watch.��

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Funding for the third quarter in Europe totaled $16 billion, down 44% year over year from $28 billion and down 35% quarter over quarter from $24 billion, per an analysis of Crunchbase data.��

This downward trend for European venture funding in the past quarter is in line with global and North American funding trends. We find the largest quarterly decline on a global basis year over year since Crunchbase started tracking venture funding in the mid-2000s.�� 

Funding in Europe is at its lowest since the fourth quarter of 2020, which totaled $13.4 billion.��

The biggest dip quarter over quarter was at early-stage funding, while late stage fell by a greater proportion year over year.

Early-stage funding dropped

The most significant shift in European venture in the third quarter was at early-stage funding which dropped below $5 billion for the first time since the beginning of 2021.��

Early-stage funding declined by more than 40% quarter over quarter and year over year, a signal that European venture capital firms have scaled back their investment pace due to the global economic downturn.��

In the first half of 2022 early-stage funding remained high, in defiance of the economic downturn.

Late-stage funding

Late-stage funding continued to fall further from the second quarter into the third quarter. It reached $9.4 billion in the third quarter, down by almost a third quarter over quarter and close to half of Q3 2021 funding.��

Late-stage funding in 2021 in Europe grew over 200% year over year, as global investors sought out growth companies in Europe. Those investors have scaled back since the second quarter of 2022.��

However late-stage funding into European startups has remained a larger proportion of funding at 60% this past quarter compared to around 50% in 2020.

Seed-stage funding

Seed-stage funding dipped below $2 billion for the first time since the beginning of 2021. Year over year seed-stage funding fell by a lesser proportion compared to other funding stages but still down 29% quarter over quarter and 20% year over year.��

The larger drop quarter over quarters is an indication of investors declining appetite for new investment opportunities in the current climate.

New unicorns 

Only four companies from Europe joined The Crunchbase ������Ƶ this past quarter, compared to 21 new European unicorns in the second quarter of 2022.��

Cryptocurrency companies from Zurich and from London joined the list. Also new to the board is sustainable blockchain provider headquartered in London. Payments company , which helps consumers and merchants avoid fees from traditional credit card providers, is the fourth European company to become a unicorn.��

It’s been a chilly time for unicorns all around: Buy now, pay later payments provider shed $39 billion in value in the second quarter and dropped off the list of the top 10 most highly valued private companies.��

In summary

While overall funding is down from the peak in 2021, European startups still garnered funding amounts above 2020 quarterly totals.��

In the meantime median and average seed and Series A funding have held up compared to 2021 amounts. Median and average fundings from Series B onwards declined.��

European venture firms have continued to raise record funds into 2022 including , , , alongside settlers from the U.S. venture markets who raised record funds in recent years and set up shop in Europe.

Crunchbase Pro queries relevant to this article

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Methodology

The data contained in this report comes directly from Crunchbase, and is based on reported data. Data reported is as of October 3, 2022.

Note that data lags are most pronounced at the earliest stages of venture activity, with seed funding amounts increasing significantly after the end of a quarter/year.

The most recent quarter/year will increase over time relative to previous quarters. For funding counts, we notice a strong data lag, especially at the seed and early stages, by as much as 30 percent to 40 percent a year out.

Please note that all funding values are given in U.S. dollars unless otherwise noted. Crunchbase converts foreign currencies to U.S. dollars at the prevailing spot rate from the date funding rounds, acquisitions, IPOs and other financial events are reported. Even if those events were added to Crunchbase long after the event was announced, foreign currency transactions are converted at the historic spot price.

For M&A transaction analysis, we include venture-backed companies and exclude companies that previously went public.��

Glossary of funding terms

Seed and angel consists of seed, pre-seed and angel rounds. Crunchbase also includes venture rounds of unknown series, equity crowdfunding and convertible notes at $3 million (USD or as-converted USD equivalent) or less.

Early-stage consists of Series A and Series B rounds, as well as other round types. Crunchbase includes venture rounds of unknown series, corporate venture and other rounds above $3 million, and those less than or equal to $15 million.

Late-stage consists of Series C, Series D, Series E and later-lettered venture rounds following the “Series [Letter]” naming convention. Also included are venture rounds of unknown series, corporate venture and other rounds above $15 million.

Technology growth is a private-equity round raised by a company that has previously raised a “venture” round. (So basically, any round from the previously defined stages.)

Illustration:

We spoke with partners , based in Amsterdam, and from New York on the latest fund. The increased fund size for the early-stage venture capital firm signals an intent to move into the growth stages as well, said Kotting.

“The market is coming into maturity in Europe,” Kotting said. The new fund allows Northzone to support “top entrepreneurs all the way through their life cycle.”

Schadeck pointed to Northzone’s deep relationships with founders from seed through Series B. “It was very easy for us to have that conversation about growth,” she said.

“At that point, companies are still figuring out their full senior team, honing product market fit, first step of internationalization,” all areas in which early-stage investors are engaged, said Kotting.

Billion-dollar exits

The 26-year-old firm invests across Europe and the U.S., and is known for its early investments in , and —all billion-dollar exits when the firm exited, where Northzone led their Series A.

Northzone raised its first fund of $8 million in 1997 to invest in the Nordic region. In 2012, the firm established its London office as it had already expanded to investing across Europe. In 2015, the firm hired its first team member in New York, which signaled its intent to invest in the U.S. as talent from Europe moved to the U.S.

Northzone has offices in London, Stockholm, New York, Amsterdam and Berlin.

The firm started raising its fund 10 earlier this year as the tech markets were already pulling back. “If you look at today’s market, obviously inventory in itself is very proven. Our overall track record is much more proven now than it was. The last two funds have already pretty quickly started to prove value, so I think those things coming together gave both the trust to the LPs to come in now,” said Kotting.

Investing in 2022

With the slowdown in the funding markets “we’re now able to take much longer on diligence and timing,” said Schadeck, who found there is less pressure to make quick decisions.

“Most companies have tried to go back to 24-30 months of runway. Most boards have sort of pushed companies to be relatively cash-efficient,” confirmed Kotting.

“There is so much opportunity in the market right now,” he said. “So there’s no doubt we can deploy this money, and hopefully do a good job at it.”

Illustration: Dom Guzman

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“The entire amount invested in private cloud companies in Europe and Israel in 2020 has grown close to 30% so far to $9-9.5 billion, which is nearly half the $20 billion invested in US-born cloud companies,” said Botteri in the latest report on European cloud companies.

Botteri attributes this growth to Europe’s leadership in artificial intelligence in math, science and data, along with the increase in the number of ecosystems across Europe that are attracting startups, which in turn impact one another.

Accel’s London office earlier this year celebrated its 20th anniversary and the firm has been front and center through Europe’s rise as a startup hub.

Key findings

• Two European software companies were valued at more than $10 billion in July this year.
  • , now headquartered in New York, was valued over $10 billion.
  • ���ǰ��ɲ���’s was acquired with a total valuation above $12 billion.
• There are 100 companies to watch on Accels Euroscape cloud list, with , up from 13 a year ago.
• A founded in Europe and Israel is worth over $100 billion.

From consumer to cloud

Botteri built a cloud-investing profile in the early days of cloud at in the U.S. When he moved to Accel, London in 2011, there was very little happening in software at the time.

For the first three years in Europe, Botteri’s investments were in marketplace companies like and —more internet than software–Botteri told Crunchbase News. His first software investments were in in 2014, and then and .

“Europe had created some leading consumer companies like and from 2010 to 2015, and then moved into the era of software from 2016 to 2020,” said Botteri.

mirror this progress. Between 2011 and 2015, Accel made 14 software investments in seven cities, and from 2016 to 2020, 35 investments in 20 cities. The investment amount rose from $150 million to $740 million when comparing these two time periods.

This rise in European cloud companies follows through in global revenue predictions. According to the report, the global cloud applications market has increased to $100 billion in 2020 and is estimated to grow to $1 trillion by 2025.

European ecosystems

Botteri said that Europe was already very connected, and is now even more international due to the rise in remote work sparked by the COVID-19 pandemic. Europe’s time zones make it easier for people to hire in neighboring countries.

“There is a lot more mobility between these hubs than people think,” Botteri said. “You’ll see a company in Paris with engineers from Portugal, from Spain, from the U.K., even from the U.S.”

Many global software companies founded in Europe and Israel create U.S. headquarters while retaining R&D in Europe. “For every dollar spent globally on software, 50 cents are spent in the U.S. You can’t be a global software company and not have significant market share in the U.S.,” he said.

For Botteri, it really depends on the sector and the market being addressed on whether to have a U.S. headquarters or not. The includes 19 companies—all listed on the —collectively valued at $48.4 billion. Of these companies, 10 are headquartered in the U.S.

The most highly valued companies, which were all founded in Europe and Israel, include New York-headquartered robotic process automation company valued at $10.2 billion, London-based online payment solution at $5.5 billion, and customer cloud communications company based in Amsterdam and customer-engagement platform headquartered in San Francisco, each valued at $3 billion.

Security company , based in London, raised its Series A in March 2018 and reached a unicorn valuation at its Series C within two years. And live virtual-events platform , also based in London, which raised a Series A earlier this year, was most recently valued at $2.1 billion in November.

Just a year ago, the 2019 Champions league of 13 companies were valued collectively at $19.5 billion. Now, the new Champions league list of 19 companies for 2020 are valued at $48.4 billion, more than double the valuation of the 2019 list.

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The acquisition, announced on Monday, will help the travel company further refine its pricing, manage inventory, and manage revenue, according to a statement provided by OYO to Crunchbase News. The roll out will start with Europe, which adds to OYO’s promise to invest €300 million in the vacation homes business, “with a special focus on strengthening the relationship with homeowners and enabling them with the resources,” according to the aforementioned statement.

, OYO offers hotel rooms for rental. It optimizes budget hotel rooms and leases them out to individuals and offers fresh linens, wifi and tech support. In India’s fragmented hotel industry, OYO’s model is apparently in demand as the company has raised $1.7 billion in known venture capital funding and acquired seven companies to-date, .

“Data sciences across Pricing, AI, and Imaging Sciences have been a cornerstone of OYO’s proprietary revenue enhancement technology. It is also a huge missing piece in the way traditional vacation rentals industry is run,” said , the global head of OYO Vacation and Urban Homes and chief strategy officer of OYO Hotels & Home, in the statement.

It’s notable that $10 million isn’t much for a company that has raised billions in the past. In fact, as I reported back in June, OYO raised so much money at that point that it is distorting India’s venture market, accounting for 92 percent of the past year’s total funding in India’s hospitality startups.

In the past, OYO’s CEO has credited his company’s proprietary technology for its competitive edge amid other travel giants in the world. But as it expands (the company currently hosts guests around the world in over 23,000 franchised and leased hotels in 800 cities in 19 countries across the world, ), the extra help might be what it needs to keep up.

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That fact comes from the —made in partnership with  and . The report details the growth and maturation of the global startup scene, with a particular focus on the European continent and its most recent exit results. (Also: , a law firm, took part in the report’s creation.)

This is the second time that Crunchbase and Mind the Bridge worked together to dive into the world of European startups. Last year the data, as , indicated that in the last half decade “U.S. companies have purchased about four times as many startups as European acquirers.”

So how much has changed since the last report?

M&A

The number of global startup exits from 2011 to 2017 has shown rapid growth, especially since 2014, a year that could be fairly tagged as one of the peaks in the unicorn cycle. According to the report, the twelve month period ending July, 2017 saw 4,217 startup exits, up from 2,976 in the preceding period.

However, that growth was not mirrored in the value of those exits. Of course, we are dealing with partial exit numbers as many liquidity events are never price-disclosed. Regardless of that caveat, the following chart was eye-catching:

(Date range: July 2010 to June 2017. From the document: “Annual data refers to the period July (previous)-June (listed).”)

Even though total deal volume increased, there are three possibilities that spring to mind concerning the deceleration in exit dollar worth of those startups.

1. More startup exits happened without their prices becoming known.
2. The average acquisition price went through a reduction.
3. Perhaps a little of both.

Regardless, the 2017 period as listed above set new records. This implies, with caveats, that the environment is still quite good for startups looking to tap out, trade in, or join up.

What About Europe?

Writing from Silicon Valley, it’s easy to forget that other parts of California exist. But in addition to the rest of California, it turns out whole other continents feature startup activity.

For instance, it isn’t hard to find enthusiasm about Latin America. And we can even find a little bit too much exuberance in certain sectors of the Chinese startup world. Now let’s narrow the sight on Europe, as the report has several data points concerning the continent that are worth our time.

First, cutting down from the above chart here are the exit numbers, broken down by geographic region:

In the listed 2016 period, European exits accounted for just 42.5 percent of the US total. In the 2017 period, that number had risen to 52.6 percent. Of course, the raw number of US exits grew dramatically over the same period. So what’s the implication? In short, the European scene, despite growth in the US market, managed to grab more relative exit share.

That’s pretty bullish. Now here are the same charts tracking known exit value:

Running the same numbers, here’s what we can say: In the 2016 period, European startup exits were worth just 30.6 percent of their US counterparts. In the 2017-period, that number grew to 50.9 percent.

However, as the value of US startup exits fell, we could be seeing the specter of undisclosed exit values coming to roost. How likely it is that the aggregate (know and unknown) dollar value was down in the US compared to the year before is up to you to determine.

Regardless, the value of European startup exits went up as its deal volume rose.

Relative Performance

Notable in the report is cross-border startup M&A between the US and Europe. Given the strong trade ties between the two areas, it’s perhaps not surprising that there is quite a lot of cross-Atlantic startup dealmaking.

Here are three key data points:

1. “In 87% of US acquisitions both sides were domestic companies, while this number is 75% for European M&A deals.”
2. “US startups accounted about 25% of acquisitions by EU companies, but ate up 58% of the total capital. This would suggest that US startups are more expensive than European counterparts.”
3. “US companies were responsible for more than a third (36%) of European startup acquisitions.”

Summing the three, both the US and Europe largely conduct M&A deals inside their own borders, which isn’t shocking. Geographical proximity counts for a lot, even in our digital age, given the wildly varying local laws concerning IP, taxes, and more. But that fact doesn’t stop the continents from buying from each other. In fact, of the companies that European startups buy, a quarter were from the US. They were purchased at high cost, it seems, as evinced by the 58 percent number. And on the other end of the ledger, US-based companies were responsible for more than a third of European startup acquisitions.

That all points to a robust cross-Atlantic startup M&A market. What will become of it when a nearly-inevitable correction occurs remains to be seen. For now, times are good.

iStockPhoto / kamisoka