Paris takes over London as VC capital of Europe

The Île-de-France region received €3.1bn in investment between 2007 and 2015, against Inner London's €2.8bn, according to the VC Factor report. Berlin received €1.7bn, with Stockholm, Upper Bavaria and the Berkshire, Buckinghamshire and Oxfordshire region of the UK following.

Emerging startup hubs are also gaining importance, with 25% of capital deployed into cities with fewer than 100,000 inhabitants, the report found.

VC Factor analysed a sample of 8,960 EU startups that received an early- or late-stage VC investment for the first time during 2007-2015. For financial and industry activity data, the report used Bureau Van Dijk's Orbis database.

From a sector perspective, two thirds of the European VC-backed startups operated in the information, communication and technology (ICT) and services sectors. This was the case in most geographic regions, with the British Isles exhibiting the highest share of ICT startups. The Nordic region had the highest share of life sciences firms, representing 28% of total investment, against the European average of 17%.

The report also found that VC-backed companies outperformed non-VC-backed companies by the third year after the VC investment, on average. Metrics for performance included growth of staff, revenues, assets and intangibles. Without VC investment, the report concluded startup performance would have been significantly poorer, while the number of companies that would have shrunk in size would have increased by more than 3x.

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