Europe sets 3rd-highest fundraising total ever in 2023, as private equity, growth, venture capital investments reach €100bn for 4th year on record

Invest Europe, the association representing Europe’s private equity, venture capital and infrastructure sectors, as well as their investors, today published Investing in Europe: Private Equity Activity 2023, the most authoritative and comprehensive report into European private equity and venture capital fundraising, investment and divestment activity. The study shows continued strong demand from international long-term investors for the asset class, as well as ongoing robust investment levels that put the industry in line with the highs achieved before the pandemic.

• Private equity, growth and venture capital firms raised €133 billion in incremental funds in 2023, down on 2022’s exceptional result of €195 billion, but nonetheless the third highest total for European capital raising and well ahead of pre-COVID levels. Buyout funds raised €95 billion, 5% above the average of the last five years, while growth funds gathered €17 billion, and venture capital funds raised €14 billion.

• A total of €100 billion was invested into 8,391 companies, down on the highs of 2021 and 2022, but in line with pre-COVID activity and the fourth year out of the last five in which the industry has invested €100 billion or more. Buyout investment totalled €63 billion, driven by investment into medium-sized companies. Venture capital investment decelerated to €13 billion yet remained ahead of pre-pandemic levels.

The data illustrates the ongoing attraction of European private equity, growth and venture capital as a source of returns to long-term investors. In terms of funds raised at final closing, 2023 was a record year, with 242 funds achieving a total of €137 billion since they started fundraising, the highest amount ever registered, and some 28% ahead of the 2022 total.

Pension funds were the largest contributors to the asset class, accounting for 24% of capital committed, followed by sovereign wealth funds and fund of funds. The appeal of European businesses to global investors is also evident as North America remained the leading source of capital, representing almost one quarter of all euros raised, while Asia & Australia jointly accounted for a fifth of fundraising. France & Benelux was the leading European source of commitments on 22%. 

Eric de Montgolfier, CEO of Invest Europe, commented:

“After two exceptional fundraising and investment years in the immediate recovery from COVID, the challenges facing the industry in 2023 were widely documented. But far from enduring a crash, private equity and venture capital has had a soft landing with fundraising and investment rejoining their pre-pandemic trajectories across buyouts, growth, and venture capital.”

“Europe is home to innovative and exciting businesses, as well as exceptional fund managers. This winning combination ensures that capital and expertise continue to flow where they are needed, building better businesses, driving the digital and energy transitions, and creating jobs and prosperity for European citizens in the process.”

Information and Communication Technology (ICT) remained the largest sector in 2023, accounting for a quarter of all investments. Consumer Products & Services was the second largest sector with 19.1% of investment, closely followed by Business Products & Services with 19%. Biotechnology and Healthcare accounted for 15% of capital invested, highlighting the particularly robust VC investment in this sector. Further highlighting the industry's focus on companies that make a positive difference, Energy & Environment was the fifth largest sector in terms of total investment, at 7.5%.

A total of 4,764 start-ups received venture capital backing in 2023 with the €13 billion invested a modest 5% below the average of the past five years. Start-ups in the UK & Ireland led the way for VC backing with €3.8 billion received, while companies in France & Benelux received most growth funding at €7.8 billion.

In the buyout segment, Europe’s mid-market further cemented its reputation as the region’s growth engine in 2023, accounting for €24 billion of investment, making it the largest buyout segment of the year.

This year, for the first time, our report is published online alongside an interactive dashboard designed to increase the use of our industry-leading statistics. Importantly, the information available in this dashboard often provides deeper insights than is typically available to non-members through our regular reporting.

Click to download the full report and supporting data (member-only).

_________________________________________________________________________________________

About Invest Europe

Invest Europe is the association representing Europe’s private equity, venture capital and infrastructure sectors, as well as their investors. We have over 650 members, split roughly equally between private equity, venture capital and limited partners – with some 110 associate members representing advisers to our ecosystem. Those members are based in 57 countries, including 42 in Europe, and manage 60% of the European private equity and venture capital industry’s €1 trillion of assets under management. Businesses with private capital investment employ 10.9 million people across Europe, 5% of the region’s workforce.