Paul Fisher compared VC funding for Web 2.0 startups in the U.S. and Europe. As one would assume Europe lags behind, but the discrepancy he reports is pretty startling:

In 2005, US-based Web2.0 companies reported raising £200mn whilst European businesses raised just £24mn.

This is in line with my anecdotal experience. A local entrepreneur / angel investor friend of mine recently asked a number of the local VCs if they’re getting much Web 2.0 dealflow. The major VC firm said they hadn’t received any business plans.

Fisher ends on a positive note, though:

Frequently, we see European VC software investment trends trailing the US by anywhere from 3 – 12 months. I’m pretty excited by the range of European Web2.0 entrepreneurs that I’m meeting today. I also know there are some interesting deals currently “in process” at many VC houses. I’m looking forward to seeing the European numbers catch-up.

Again, my anecdotal experience from recent Euro events (DLD, LIFT) suggests there are some cool startups in the process of landing VC investment. Perhaps characteristically of Europe, they seem to have more of a mobile angle.

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Stuart Rock
February 13th, 2006 at 3:26 pm (#)

Jyri, you are right about the mobile angle. Our magazine Real Business
(http://www.realbusiness.co.uk) recently ran a pretty substantial article on the 50 UK companies to watch in mobile. For the past nine years, we have run a general “50 to watch” feature. Now, though, mobile has become such a fertile area for entrepreneurs, it’s worth reporting in its own right. We may well start looking for other sub-sectors.

Mike Butcher
February 23rd, 2006 at 7:11 am (#)

Yes, here in the UK Web 2.0 start-ups are still having a tough time: http://mbites.com/web_2_wave_or_bubble

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