For years venture capital has languished in the European market even while other parts of the private equity sector have fared better, so much so that wealth managers sometimes dismiss it. But new figures suggest that VC funds enjoyed a big rise in investment activity last year.

 For years venture capital has languished in the European market even while other parts of the private equity sector have fared better. But new figures suggest that VC funds enjoyed a big rise in investment activity last year.

According to Preqin, the research firm, more than €6 billion was invested in European VC deals in 2013, a rise of 42 per cent from the level seen in 2012. That figure is a relative drop in the ocean compared to the multi-trillion asset management sector, of course. But a rise of 42 per cent in just a single year cannot be sniffed at.

To put it another way, more venture capital has been put into European firms than at any time since 2007, the year before the credit crunch. Given that VC deals are aimed at small, nascent business ideas and projects, such a rise is a sign of growing confidence in parts of the European economy, Preqin said in a note on its data.

However, Europe is still way behind North American VC in terms of value invested. A total of 3,868 VC deals were done last year, amounting to a total of $31.6 billion, up from 4,233 deals, worth $32.9 billion a year before (a slight fall). North America accounts for almost two-thirds (62 per cent) of all deals and 68 per cent of the aggregate value of such deals.

There were 5,973 venture capital financings announced globally in 2013 with an aggregate value of $46.3 billion, representing a 6 per cent fall in number and a 5 per cent rise in aggregate value compared to 2012.

The number of deals in Europe was 8 per cent up on the year before, with 1,352 deals in 2013 compared to 1,250 in 2012.

The number of deals in economies outside the main venture capital hubs of North America, Europe, Greater China, India and Israel rose by 38 per cent to 319 from 231 in 2012, along with a 148 per cent increase in value to $2.1 billion from $856 million.