FINANCING INNOVATION: EARLY STAGE
INVESTMENT IN THE EU

ANALYSIS OF THE SIZE, DEPTH & GROWTH POTENTIAL OF
INVESTMENT IN HIGH POTENTIAL COMPANIE S ACROSS
EUROPE
April 2023
By William Wright and Christopher Breen

> Innovative growth companies are a vital part of rebuilding a more resilient, dynamic,
and sustainable economy in the EU. This report highlights the challenges faced in
funding this important sector, analyses the rapid growth in early stage investment in the
EU over the past five years, and outlines an ambitious but achievable growth opportunity
that could unlock nearly €25bn a year in additional investment to support nearly 5,000
companies in reaching their potential.

INTRODUCTION & SUMMARY

Financing innovation: early stage investment in the EU
In the wake of the Covid crisis, the Russian invasion of Ukraine, and the recent turmoil in banking and financial
markets, the EU needs all the help it can get to build a more resilient, more dynamic, and more sustainable
economy. In particular, the EU needs to develop more financing of innovation at scale - an area where the EU has
traditionally lagged behind other developed economies - to help support the sort of companies the EU needs to
drive investment in jobs, growth, productivity, and prosperity.
This short paper was prepared for the Informal Ecofin meeting in Stockholm in April 2023 hosted by the
Swedish Presidency of the Council of the EU. It frames early stage investment in the EU in the context of the
state of wider capital markets, and compares early stage investment in the EU with comparable markets like
the US, UK, and Canada. It highlights the welcome and rapid growth in activity over the past five years; analyses
the wide range in the level of activity in different member states; and provides a directional indication of the
potential growth opportunity at an EU and country level in concrete terms. It also presents some questions
and suggestions for consideration at a member state and EU level as to how to achieve this growth.
Here is a summary of the key points from this paper:
1.

The wider context: capital markets in the EU are under-developed and fragmented but they are heading
in the right direction and have made steady progress since the launch of capital markets union. Activity has
grown in absolute terms and relative to GDP in virtually every sector, and EU capital markets are deeper
than ever before. But there is a wide range in development across the EU, and the EU’s share of global
activity has halved in the past 15 years.

2.

Financing innovation: the gap between early stage investment in the EU and other developed economies
is stark. Over the past five years activity in the US has been more than six times larger than in the EU
(€845bn compared with €131bn). The market is highly concentrated (with Germany, France, and Sweden
accounting for 70% of activity) and investment is not evenly distributed across the EU. This suggests that
many high potential companies in some markets may not have access to the capital they need.

3.

Rapid growth: the good news about early stage investment in the EU is that it is growing rapidly. Over the
past five years activity has increased fivefold, and after explosive growth in 2021 investment held up well in
2022 despite the wider market downturn. Last year, activity in the US was just four times larger than the
EU, compared with 12 times larger as recently as 2018.

4.

Growth opportunity: the wide range in development between member states and rapid recent growth
suggests there is huge growth potential in early stage investment in the EU. Using a simple analysis to
benchmark EU member states with each other, we estimate that early stage investment in the EU could
realistically grow by nearly two-thirds. This would unlock an additional €24bn in investment in an extra
4,800 high potential companies across the EU every year.

5.

Seizing the opportunity: there is no magic wand that the EU or individual member states can wave to
achieve this growth potential, and early stage investment may struggle to adapt to rising interest rates.
Enabling this growth will require a combination ‘top down’ initiatives at an EU-level to reduce barriers and
‘bottom up’ measures at a national level to drive capacity. Ultimately, innovative companies will thrive in
markets with well-developed ecosystems that incentivise, attract, and retain the best talent.

Note: we have used data on early stage investment from Preqin as the basis of this paper. For the purposes of this analysis we
included the following categories as early stage investment: angel, seed, series A, later stage, venture debt, growth capital, and
pre-IPO funding. Any errors are entirely our own.
2

EU CAPITAL MARKETS AT A GLANCE

Fig.1 The growth and depth of EU capital markets
i) Heading in the right direction
Change in value and depth relative to GDP of EU capital markets
Three years to 2021 vs three years to 2014

ii) Going up…
The depth of EU capital markets across 24 different sectors
of activity since 2012 (rebased to EU average = 100 in 2014)

Change since 2014:
Sector

Value

Venture capital investment

305%

Private equity investment

130%

IPOs

66%

Pensions assets

64%

Assets under management

62%

Stock market

57%

Corporate bond market

46%

Corporate bond issues

39%

High-yield bond issues

27%

Insurance assets

27%

Bank lending to companies

7%

Small IPOs (<$100m)

-11%

129

Depth

Source: New Financial analysis of a range of public and private data sources

89

93

100

115 113 113 115
109 112

iii) Going down…
EU share of global capital markets activity 2006 to 2022e
19%
14%
11%

2006

2010

2020

9%

2022e

Slow but steady progress
Capital markets in the EU can be a depressing topic. They are small, under-developed, and fragmented, and they are not
yet in a position to help address key challenges such as financing the transition to net zero, providing a fully diverse source
of funding for EU companies, or supporting an ageing population. Progress on capital markets union has been slow. The
good news is that they are heading in the right direction and making steady if unspectacular progress on most measures.
Fig.1i shows the growth in activity in the EU in a selection of sectors in the three years to 2021 compared with the three
years to 2014, the year CMU was first announced. In virtually every sector the value of activity has increased in absolute
terms and relative to GDP. The strongest growth has come in venture capital investment, which has more than quadrupled.
This steady growth is reflected in the increase in the overall depth of capital markets across the EU. Fig.1ii shows that on
average across 24 different sectors of activity, capital markets in the EU were nearly a third larger relative to the GDP in the
three year to 2021 than in the three years to 2014, and have recovered strongly from the fallout from the euro-crisis.
When we publish the updated index for 2022 later this year, we expect it to fall back to around 120 given the market
slowdown last year. While this growth in EU capital markets is welcome, it is not something that can be attributed to
structural reform from the CMU project. However, it provides good momentum for future growth on the back of CMU.
The bad news is that activity in the EU is growing at a slower rate than in the US and faster growing markets in Asia.
According to our preliminary estimate for 2022, the EU’s share of global capital markets activity has more than halved since
2006 from an average of 19% to just 9% last year (see Fig.1iii). Reversing this relative decline will require a renewed,
co-ordinated, and more urgent effort across the EU.
3

RANGE IN DEPTH OF EU CAPITAL MARKETS

Fig.2 What is the range in depth of capital markets in the EU?
This chart shows the overall average depth of capital markets across 27 different sectors of activity over the three years to 2021.
Note: rebased to EU average = 100
422

412

227

216
170
136

126 119

112

100 97

87 81 80

68 61

53 50 48
44 43

35 34 34
27 22 20
18 17 15 15

Source: New Financial

A wide range
One of the biggest challenges in developing bigger and better capital markets in the EU is the wide range in the level of
development between individual member states. The range in depth of capital markets across the EU is far greater than the
difference in depth between the EU and the US, or between the EU and the UK. Fig.2 shows the wide range in the depth
of capital markets across 27 sectors of activity in each country in the three years to 2021 with every member state rebased
to 100 as the EU average. This wide range highlights the potential benefits of CMU in reducing barriers through ‘top down’
measures to improve harmonisation, but also underlines how individual member states can build capacity in capital markets
through their own ‘bottom up’ measures.
Capital markets in the US (on 412) are nearly twice the size relative to GDP than in the UK (on 227), which in turn are
more than twice as deep as the EU (100). Luxembourg has the deepest capital markets in the EU (422), mainly because of
its role as a regional hub for investment funds and international bond issuance, but Luxembourg’s capital markets are very
small (around 2% of overall EU activity). After a bumper year in equity markets activity in 2021, Sweden’s capital markets
(216) are now almost as deep as in the UK.
There are three clear groups of countries in terms of the depth of their capital markets. The first group is made up of
wealthier countries in the north west of the EU such as Sweden, the Netherlands, and France. These countries’ capital
markets are significantly more developed than the EU average and give an idea of the potential of CMU. The countries in
the second group have relatively developed capital markets but are less developed than the EU average, including three out
of the four biggest economies in the EU - Germany, Italy, and Spain. And finally, there is a long tail of smaller economies
where a fully developed CMU could make a big difference. This wide range matters in terms of generating political
momentum and ownership behind efforts to expand capital markets. It is too easy for many countries with less developed
markets to park the problem in the ‘too difficult’ or the ‘not relevant box’.
4

EARLY STAGE INVESTMENT IN THE EU

Fig.3 The scale of early stage activity in the EU
i) A question of scale
The value of early stage investment in the EU from 2018 to 2022
compared with the US, Canada, and the UK in €bn
Non-EU
€949bn

ii) Concentration
Country share of EU early stage investment
in 2022
EU
€131bn
DEU
30%

Other
30%

SWE
16%

FRA
24%

70%

iii) Composition
Composition of EU early stage investment in
2022*
SWE
12
NLD ESP
9
8

2%
6%
Angel
Seed

15%
Series A

46%
Later
stage

32%
Venture
debt

72

31

Source: New Financial analysis of data from Preqin and individual stock exchanges

* Data for angel investment is estimate based on 2021

Playing catch-up
The disparity between the size and depth of capital markets in the EU and other developed markets is particularly stark
when it comes to early stage investment. Fig.3i shows that in the five years to the end of 2022, the value of early stage
investment in the US was more than six times larger than in the EU (€845bn compared with €131bn). If the UK (€72bn)
were still part of the EU it would account for 36% of all EU investment activity. This suggests that early stage innovative
companies in the EU - the sort of companies that the EU economy needs to drive growth, jobs, and productivity - are
missing out on the sort of funding they need to fulfil their potential compared with their US counterparts. This may reflect
the bias in the EU financial system towards bank lending, which is not designed to provide growth capital to high potential
but higher risk companies.

Another challenge for early stage investment in the EU is that it is an unusually concentrated and lumpy market: the three
largest markets (Germany, France, and Sweden) represent 70% of all EU investment activity, despite accounting for just
45% of combined GDP, as shown in Fig.3ii. This level of concentration is significantly higher than the average share of
59% for the top three countries in other sectors of the capital markets in the EU, and suggests that high potential
companies in some smaller markets are missing out on investment.
The composition of early stage investment is perhaps surprising. Of the €45bn in early stage investment in the EU in 2022,
less than 10% is in the form of angel investment (2%) or seed funding (6%), with Series A funding - financing for companies
that have demonstrated proof of concept - accounting for another 15%. Later stage investment, for more established
companies with a clear track record of growth, represents nearly half of all early stage investment (46%), with venture debt
(lending to early stage companies) accounting for the remaining third.
5

THE GROWTH IN EARLY STAGE INVESTMENT IN THE EU

Fig.4 The growth in early stage investment activity
i) Growing…
Value of early stage investment in the EU
2018 to 2022 €bn
45.8

ii) Getting deeper…
Early stage investment relative to GDP
(three years to 2022 vs three years to 2018)

44.5

2018

1.00%

2022

iii) Closing the gap…
The ratio of US activity to EU activity
from 2018 to 2022

12.1
10.5

0.65%

6.8

0.53%

19.5

6.3
4.3

12.1

0.29%

8.7

0.25%
0.06%

2018

2019

2020

2021

2022

USA

GBR

EU

2018

2019

2020

2021

2022

Source: New Financial analysis of data from Preqin
Note: for a full sector-by-sector growth analysis see the appendix on page 13

Encouraging progress

One of the most encouraging developments in EU capital markets over the past five years has been the rapid growth of
early stage investment across the board. In the five years to 2022 the total value of investment in early stage companies in
the EU increased five times to nearly €45bn (see Fig.4i) according to data from Preqin. The trend in virtually every sector
has been the same: healthy growth from 2018 to 2020; an explosion of activity in 2021; and activity holding up reasonably
well in 2022 despite a wider market downturn. It is early days for 2023 but the initial data for the first quarter shows a
significant fall in activity: investment fell by 71% to just €4.1bn compared with the same period last year, with later stage
funding hit particularly hard. This decline suggests that members states and the EU will have to redouble their efforts.
It is particularly encouraging to see that Seed investment and Series A investment, which involve funding companies at a
very early stage, remained resilient in 2022. However, the value of later stage investment, which involves follow-on
investments in companies that have already received external backing, fell sharply in 2022 (by 30% to €21bn). This could
suggest a problem further down the line if companies that are trying to scale-up struggle to access capital.

This rapid growth means that the gap between the US and EU has been closing over the past five years. Fig.4ii shows
that in the three years to 2018, early stage investment in the US was nine times larger relative to GDP than in the EU
(0.53% a year vs 0.06%) and activity in the UK was five times larger. While activity has doubled in the US and UK, it has
quadrupled in the EU and now stands at 0.25% a year in the three years to 2022, reducing the gap to ‘just’ four times.
In the decade before 2018, activity in the US was 12 times larger than in the EU each year. But over the past five years
this ratio has dropped every year from just over 12 times in 2018 to just 4.3 times last year (see Fig.4iii). This concerted
and significant narrowing of the gap between the US and EU market in the past five years could mark a more structural
and permanent change. However, there is still a long way to go for early stage investment in the EU to be anywhere like
the levels seen in the US, Canada, or the UK.
6

THE RANGE IN EARLY STAGE INVESTMENT IN THE EU

Fig.5 The range in depth and development of early stage investment activity in the EU
This chart shows the value of early stage investment activity relative to GDP by country in the three years to 2022.
Note: rebased to EU average = 100
991

396

272

260
202

182

167

144

130 126 121

121 112

100 95

88

67

66

63

51

41

27

26

20

18

15

15

12

9

6

3

Activity as a % of GDP

Source: New Financial analysis of Preqin data

A range of opportunity
Early stage investment activity is highly concentrated and not evenly distributed across the EU, which suggests that high
potential companies in some markets may be missing out on the capital they need. Fig.5 shows the value of early stage
investment by country in the three years to 2022 as a percentage of GDP, rebased to the EU average as 100. The wide
range in depth highlights what individual member states can achieve on their own merits and underlines the huge potential
growth opportunity across the EU.
Estonia is the most developed market relative to the size of its economy with early stage investment equivalent to 2.5% of
GDP a year: more than double the level in the US and 10 times higher than the EU average (although it accounts for less
than 3% of all activity in the EU). Sweden is the next most developed market (ahead of the UK) and it is encouraging to
see that activity in Germany is well above the EU average and a lot more developed than the rest of its capital markets.
We think this chart should send a strong aspirational message to individual member states: if Estonia can attract early stage
investment of 2.5% a year, why not Lithuania (0.32%) or Latvia (0.06%)? If Sweden can manage 0.7% a year, what about the
likes of Denmark, Belgium, or Austria? And what is stopping large economies such as Spain (0.17%) or Italy (0.05%) having
the same sort of market as France (0.30%) or Germany (0.36%)?
In other words, this chart is not so much asking ‘what can be done at an EU level to boost early stage investment?’ but
’what can individual member states do to support and attract more early stage investment given that comparable
economies have already shown what can be achieved?’. We explore what this growth might look like in the next few pages.
7

DEPTH OF EU EARLY STAGE INVESTMENT BY COUNTRY

Fig.6 What is the depth of activity across EU countries?
This table provides an ‘at a glance’ ranking of the depth of early stage investment in each EU country and the UK across eight sectors of activity.
It is divided into four groups, from most developed (top quartile) to least developed (bottom quartile).
Top quartile

Second quartile

Overall ranking
Rank

Top quartile

1
2
3
4
5

Second quartile

6

Third quartile

EST

12

20

IRL

MLT
BEL

AUT
CZE
PRT

LVA
ITA

21

HUN

23

GRC

22
24
25
26
27

Private
equity

DNK

CYP

19

Angel
investment

FRA

16
18

Growth
stock
market

HRV

ESP

17

Venture
debt

DEU

14
15

Later stage
/ other

FIN

NLD

11

Series A

LUX

9

10

Seed

Related investment activity

GBR

LTU

8

All early
stage

Types of early stage investment

Bottom quartile

SWE

7

13

Bottom quartile

Country

Third quartile

SVK

POL

SVN

ROU
BGR

8

THE GROWTH POTENTIAL IN EARLY STAGE INVESTMENT

Bigger and deeper
The previous two pages have highlighted the
wide range in the level of early stage
investment across the EU. The data can also be
used to provide a directional estimate of the
growth potential in early stage investment and
its impact in practical terms. Overall, we
estimate that early stage investment activity in
the EU could grow by 64%, which translates
into an additional €24bn of investment in nearly
4,800 extra companies a year (see Fig.7).
We ran a simple ‘what if…?’ analysis based on
the rankings by quartile: what if the value of
early stage investment activity in each country
increased to the average level of the countries
in the quartile above?
For example, investment in Spain of €2bn a
year over the last three years translates into
0.17% of GDP, at the top of the third quartile.
The average depth of countries in the quartile
above is 0.28%. If activity in Spain increased to
that level - and there is no particular reason
why Spain should not have the same sort of
market as France or Belgium - it would translate
into an increase of 80% in investment or an
extra €1.7bn a year being invested in at least
280 additional companies. If you repeat this
exercise for each country and each sector (and
apply a conservative growth rate of half the
average growth to countries in the top quartile)
you get an ambitious but achievable measure of
the growth opportunity across the EU.
At an EU level, this growth ranges from 160%
for the market value of growth stock markets
(an extra €203bn and more than 3,000 extra
listed companies) to ‘just’ 54% for later stage
investment (an extra €11bn a year funding
nearly 1,300 companies). At a country level
(see Fig.8) activity in Germany would increase
by nearly 60%, unlocking an extra €8bn a year
for roughly 770 companies. In Italy, activity
would more than triple with an additional
€1.9bn a year supporting 520 companies. And
across Central and Eastern Europe (what we
call the EU11) this directional growth would
mean activity more than doubling with an extra
€2.3bn to support more than 900 companies.

Fig.7 The growth potential by sector at an EU level

The growth opportunity in early stage investment activity at an EU level
The numbers in blue show the potential increase in value in €bn
The numbers in purple show the potential increase in the number of investments
+€bn +number
160%

Growth mkt

203

3,125

2.7

883

117%

Seed
Series A

78%

4.2

381

Angel

68%

0.43

1,861

All early stage

64%

23.8

4,749

Venture debt*

64%

5.7

325

Later stage

54%

10.8

1,299

* Note: the high concentration of activity in just two countries for venture debt means that we
have applied the average potential growth of the other sectors instead of a quartile-based analysis

Fig.8 The growth potential by country

The growth opportunity in early stage investment at a country level
The numbers in purple show the potential increase in the number of investments
DEU

8

13

FRA

4

8

SWE

2

4

57%

767
646

52%

259

56%

NLD

3

1

29%

Current activity (average
three years to 2022)

ESP

2

2

80%

Potential growth in activity

EU11

2

2

123%

147
281
909

FIN

1 0 45%

378

IRL

1 1

79%

118

DNK

1 0 40%

176

ITA

1

2

202%

521

Source: New Financial analysis

Note: for a full country-by-country growth analysis see the appendix on page 12

9

LOOKING AHEAD
Financing innovation: unlocking the growth potential
One of the key messages in this report is that early stage investment in the EU has made significant progress in the past few
years but needs all the help it can get to fulfil its potential, particularly in the wake of rising interest rates and recent market
turmoil. This will not happen by accident, and will need a combination of ‘top down’ measures at an EU level and ‘bottom
up’ initiatives at a national level. Here are some questions and suggestions for policymakers across the EU to consider:
1.

The wider picture: innovative companies do not exist in a vacuum - they need a supportive business, legal,
regulatory, and social environment. Many of the challenges they face are more ‘upstream’ in nature than
regulatory changes, such as education, corporate and personal tax, labour laws, government bureaucracy - as
well as housing, infrastructure, and social policy. Innovative companies thrive in cities that mobile and talented
people can afford to move to and want to live in.

2.

A unified market: the single market is a perpetual work in progress, but the remaining barriers to a genuinely
unified markets in terms of hiring, bureaucracy, and regulation are one of the biggest obstacles for innovative
companies. Europe does not have a start-up problem, but too many companies struggle to scale-up in a
fragmented European market and find it easier to expand in larger markets like the US.

3.

Direct investment: public sector vehicles that invest directly in high potential companies help kickstart market
growth and encourage private sector investment. There is a danger in assuming public money can solve the
problem, but examples such as ALMI Invest in Sweden, Bpifrance in France, or High-Tech Gründerfonds in
Germany show how active public sector investment can galvanise activity.

4.

Scale-up funds: despite rapid growth in early stage investment in the EU, later stage investment and scale-up
capital is still underdeveloped. The TIBI programme in France to help connect companies with institutional
investors shows the value of governments playing a co-ordinating role in providing scale-up capital to help
companies through the ‘valley of death’ as they grow to maturity.

5.

Open vs closed: one of the trade-offs to consider is the balance between the EU being open to investment
from overseas while encouraging the development of more domestic investment. For example, we estimate
that US investors were involved in just over half of all early stage investments in Europe last year by value.

6.

Ecosystems: the thriving ecosystems for growth companies in London, Paris, Stockholm, and Tallinn did not
happen overnight or by accident. One of the best ways to encourage clusters of innovation is to work with
successful local founders and encourage them to become funders and mentors, creating well-funded and selfpropelling ecosystems in which returns from successful companies are reinvested in the local market.

7.

Tax reform: one way to incentivise this sort of reinvestment by successful entrepreneurs is to design tax
breaks at every stage of the funding escalator. The Seed Enterprise Investment Scheme in the UK was
specifically designed for start-ups and based on an existing tax scheme for more established companies.

8.

Not an option: competition for talent among innovative companies is fierce and money is often tight. This
means that share options are a fact of life. Harmonising the structure and tax treatment of options across the
EU - and building on the reforms at a national level over the past few years - would help level the playing field
(see the Not Optional initiative).

9.

Customer of first resort: much of the innovation in the US and other successful markets has been a response
to government demand for new technologies. Too often, governments can default to hiring more established
tech companies for projects rather than taking a risk on smaller local companies.

10. Intellectual capital: first class universities across the EU are a goldmine of innovation and technological
progress. Governments can work more closely to bring together universities, investors, and companies to help
stimulate clusters, and standardise the process of university spin-outs to tap into this rich resource.
10

About the authors
William Wright, founder and managing director, New Financial
William launched New Financial in 2014 to make the case for bigger and better capital
markets in the UK and Europe. He previously spent 18 years as a financial journalist as the
editor and member of the launch team at Financial News, which was acquired by the Wall
Street Journal in 2007. He was educated at Oxford, London, and INSEAD.
Christopher Breen, senior research analyst, New Financial
Christopher joined New Financial in February 2022 and focuses on capital markets and
green finance. He studied political science and Slavic languages & literature at the University
of Chicago, has a masters in international relations from King’s College London, and a
masters in data analytics from Queen Mary University of London.

New Financial LLP
1 Duchess Street
London
UK, W1W 6AN
www.newfinancial.org

William Wright
Managing director
william.wright@newfinancial.org
+44 (0) 20 3743 8269

Follow us on Twitter and on LinkedIn
@NewFinancialLLP

New Financial is registered on the EU Transparency Register, registration number 435008814959-36
© New Financial LLP 2023. All rights reserved
Our research on capital markets:
Here is a selection of some of our recent reports on capital markets:
Benchmarking ESG in banking & finance
Unlocking the capital in capital markets
Building EU capital markets from the bottom up
From Big Bang 2.0 to the Edinburgh Reforms
A new narrative: how (not) to talk about banking & finance
The politics of EU capital markets
A reality check on green finance
A new vision for EU capital markets
11

APPENDIX 1: A COUNTRY-BY-COUNTRY SUMMARY

Fig.9 Summary of activity and growth potential in early stage investment
This table provides an ‘at a glance’ summary of the value, depth, and growth potential in early stage investment in each EU country and the UK.
Depth in 2022 relative to EU average = 100

Activity in 2022 (exc. angel)

Annual growth potential

Value €bn

% of
GDP

# of
deals

Overall

Seed

Series A

Later /
other

Venture
debt

Angel
(2021)

Growth
market

Value
€bn

%

# of
deals

Austria

0.71

0.16%

33

57

51

37

102

1

117

11

0.510

76%

156

Belgium

0.85

0.15%

45

54

78

96

65

14

98

8

0.770

89%

102

Bulgaria

0.01

0.02%

5

5

95

0

0

0

104

28

0.077

542%

92

Croatia

0.51

0.78%

4

276

41

0

582

0

42

8

0.097

51%

14

Cyprus

0.03

0.11%

6

40

360

46

28

0

305

1906

0.038

116%

18

Czechia

0.40

0.14%

12

50

20

47

86

6

150

21

0.398

153%

63

Denmark

0.91

0.25%

51

88

163

109

55

112

287

29

0.402

40%

176

Estonia

1.15

3.11%

44

1102

1505

828

1897

0

2083

7

0.357

44%

246

Finland

1.09

0.41%

53

144

179

269

186

20

425

129

0.495

45%

378

France

10.55

0.40%

340

142

136

169

206

37

98

168

3.951

52%

646

Germany

13.55

0.35%

482

126

142

121

106

153

71

38

7.522

57%

767

Greece

0.03

0.01%

7

5

32

9

0

5

27

18

0.152

209%

45

Hungary

0.10

0.06%

3

21

4

0

43

0

44

0

0.203

276%

48

Ireland

1.47

0.30%

62

106

60

120

71

157

93

108

0.831

79%

118

Italy

1.39

0.07%

64

26

12

18

24

35

60

75

1.851

202%

521

Latvia

0.01

0.02%

6

5

85

0

0

2

301

16

0.050

196%

25

Lithuania

0.08

0.12%

7

42

149

226

0

0

288

6

0.069

38%

27

Luxembourg

0.37

0.47%

12

167

146

162

285

0

134

0

0.180

49%

28

Malta

0.03

0.20%

3

72

0

482

0

0

195

6

0.027

73%

8

Netherlands

1.45

0.15%

117

55

123

104

50

27

87

0

0.781

29%

147

Poland

0.21

0.03%

26

11

32

25

11

1

110

61

0.607

298%

192

Portugal

0.13

0.05%

23

19

54

85

7

0

102

24

0.334

207%

191

Romania

0.02

0.01%

10

3

17

12

0

0

64

129

0.214

516%

135

Slovakia

0.09

0.09%

1

30

0

0

64

0

25

0

0.151

317%

22

Slovenia

0.02

0.04%

3

14

0

54

12

0

81

0

0.056

375%

46

Spain

2.35

0.18%

130

63

60

65

61

66

87

211

1.668

80%

281

Sweden

6.96

1.21%

98

431

173

145

155

1010

104

550

2.036

56%

259

EU

44.48

0.28%

1,647

100

100

100

100

100

100

100

23.8

64%

4,749

UK

17.81

0.59%

805

208

277

261

216

160

235

466

-

-

-

Country

Source: New Financial analysis of data from Preqin, EBAN, and individual stock exchanges
12

APPENDIX 2: GROWTH IN EARLY STAGE INVESTMENT

Fig.10 The growth in early stage investment activity in the EU
Summary of the value of early stage investment activity in the EU in different sectors from 2018 to 2022 €bn
i) All early stage investment
(excluding angel investment)
45.8

ii) Seed investment

44.5

iii) Series A investment
2.5

2.5

6.5

6.7

2021

2022

1.8
19.5
8.7

2018

0.9

12.1

2019

0.6

2020

2021

2022

iv) Later stage investment

2018

2019

2020

2021

2022

v) Venture debt

2.2

2.4

2018

2019

3.1

2020

vi) Growth stock markets
150

14.4

30.0

117

113
20.9
82
5.9
5.2

2018

8.0

2019

68

6.7

8.7

2020

2021

2022

0.6

0.7

2018

2019

2020

2021

2022

2018

2019

2020

2021

2022

vii) Angel investment
1.2
0.9
0.7

2018

0.7
0.6

2019

2020

2021 2022*

Source: New Financial analysis of data from Preqin, except EBAN for angel investment, and individual stock exchanges for growth markets
* Note: New Financial estimate of angel investment in 2022

13