European venture activity falls sharply in Q3

European venture capital activity slowed sharply in the third quarter, with both fundraising and dealmaking showing the decline.

Fundraising across the Continent fell 48 percent in dollars and 41 percent in funds to just shy of $1.9 billion, according to Dow Jones VentureSource. Twenty funds raised the capital, with Partech International Ventures VII (from the transatlantic venture firm Partech Ventures) the largest at about $473 million.

Cathay Innovation, Mangrove Capital Partners and BlackFin Capital Partners also raised money.

Fundraising in Q2 was in contrast $3.6 billion with 34 funds collecting money. The summer quarter is often a soft one for European fundraising.

Venture investing also slipped from the second quarter, to about $3.9 billion, down 25 percent, according to VentureSource. The number of companies raising capital fell 7 percent to 513.

The second quarter was unusually strong, with about $5.2 billion invested.

Q3 seed activity was strong, while money going to late-stage rounds was largely unchanged. First-round dealmaking slumped 42 percent in capital, and that helped lead the median deal size across stages higher to about $2.8 million.

The United Kingdom held onto its position as the top spot for financings, with its startups attracting 41 percent of the quarter’s capital. Germany was second with 18 percent of the capital distributed.

Venture-backed IPOs and M&A exits were also down in the quarter, with eight IPOs taking place and 46 acquisitions. Seventeen IPOs and 66 exits took place in the second quarter.

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