Last year saw a significant drop in tech startup funding in Europe, with funds raised projected to reach $45 billion, compared to $82 billion the previous year. This decline is attributed to later-stage companies delaying fundraising and slower deployment pacing by investors. Meanwhile, venture capital investors in the AI and crypto space are reportedly more focused on infrastructure plays, directing funding less towards service providers and more towards building foundational ecosystems.
Key takeaways:
- European startups are increasingly turning to convertible debt as venture funding becomes scarce, with the volume of convertible debt issued by European venture capital-backed firms reaching a record $2.5 billion last year.
- Convertible debt becomes equity over time and allows founders to raise cash quickly without having to publish new valuations.
- However, these deals can provide greater benefits to investors and more liabilities for startups, potentially giving investors greater control.
- There was a significant drop in tech startup funding in Europe last year, with funds raised projected to reach $45 billion, compared to the $82 billion raised the previous year.