The European venture capital ecosystem has benefited from a combination of trends: good returns, success stories of European entrepreneurs and, more recently, a venture capital program launched by the European Commission.
To attract major institutional investors, the EC built a venture capital platform in April 2018 that was designed to help venture capital managers create funds big enough to attract the largest asset owners.
Part of the European Commission's Capital Markets Union Action Plan, VentureEU tackles the issue of helping grow successful startups as well as creating funds suitable for large institutional investors.
A number of Europeans startups could make it beyond the first few years if they received the right level of funding to scale up into global businesses, according to the commission. But European venture capital funds, with average size of around €56 million ($63 million), are not large enough to provide that support. Funds need to be able to raise at least €150 million to attract large investors, estimates Invest Europe, the European private equity and venture capital association.
Managers selected under the VentureEU program are: Isomer Capital LLP, Axon Partners Group, Aberdeen Standard Investments, LGT Group, Lombard Odier Asset Management and Schroder Adveq Management U.S. Inc. The pan-European fund-of-funds program was seeded with €410 million ($460 million) by the EU and aims to raise up to €2.1 billion in public and private investment.
The six managers finance small and medium-size companies from a range of sectors such as information and communication technologies, digital, life sciences, medical technologies, and resource and energy efficiency, the EC said in a news release.