The venture capital (VC) landscape in Europe, Middle East and Africa (EMEA) has experienced a significant transformation over the past decade, with the number of active investors contributing to the sector each year surpassing 10,000, new data released by Dealroom show. The figure represents a 4.5x increase from ten years ago and showcases the dynamism of the market as EMEA nations continue to push for innovation.

The data, released in the 6th annual ranking of VC investors in EMEA, also reveal the dominance of seed stage funding and the region’s focus on nurturing the inception of new ventures. Out of the 10,000+ investor pool that supports the EMEA startup ecosystem every year, 4,100 are predominantly active from the seed stage onward. The total number of investors active at seed stage stands higher than this figure at 5,400 investors, because many Series A and later-stage investors also participate in seed rounds.

Underscoring the vibrancy of the EMEA entrepreneurial ecosystem, the data show that approximately 3,500 new startups in the region start their venture-backed journey each year by raising their first VC round.

But despite a dynamic VC market, achieving unicorn startup remains a big challenge for ventures in EMEA. In recent years, about 50 new unicorns are minted each year in EMEA out of the 3,500 annually first-time funded startups. This translates to roughly a 1-1.5% conversion rate. Additionally, just about 25% of EMEA startups making it to Series A or beyond, the data show.

Data also indicate that choosing the right investor is critical for a startup to succeed, revealing a strong correlation between the top performing investors, and the likelihood of their portfolio companies converting from seed to Series A. More specifically, startups backed by top quartile VCs were found to be three times more likely to successfully graduate to Series A compared to those backed by VCs in the bottom quartile.

Top 20 EMEA investors

Dealroom’s 2023 VC Investor Ranking, released on November 24, presents the startup investors that are the most successful at picking winners and supporting them to become future unicorns. This is done by giving each investor a score based on their investments in unicorns, their investments in future unicorns, and their pace of investment. These scores are then ranked to determine the most successful startups investor.

The 2023 EMEA ranking, which focuses on VC investors targeting the region, reveals that LocalGlobal is the top VC investor in EMEA startups. LocalGlobe is UK-based VC that focuses on seed and impact investments, targeting mainly startups in the enterprise software, fintech, marketing and media sectors. Notable investments include Robinhood, Wise and Monzo.

LocalGlobe is seed-stage dominant, meaning that it’s backed most of its unicorn startups since the seed stage and implying that it’s very successful in identifying future winners from their very beginning.

After LocalGloba, the next top two VC investors are Index Ventures and Accel. Index Ventures is a VC firm with dual headquarters in San Francisco and London, investing in technology-enabled companies with a focus on e-commerce, fintech, mobility, gaming, infrastructure and artificial intelligence (AI), and security. It’s a renowned VC firm that has backed the likes of Skype, Facebook, Adyen, Plaid and Revolut.

Accel is an American VC firm that works with startups at the seed, early and growth stage. It concentrates on tech sectors including consumer, infrastructure, software-as-a-service (SaaS) and enterprise software, and has backed the likes of Slack, Flipkart, Spotify and Animoca Brands.

Both Index Ventures and Accel are Series A-dominant, the ranking shows.

Finally, for Series B startups and up, Insight Partners is the most successful investor in EMEA. Headquartered in New York City, Insight Partners is a global VC and private equity firm that invests in high-growth tech, software, and Internet businesses. The firm has backed Checkout.com, Alibaba and Shopify, among others.

Insight Partners is ranked at the 10th position in the overall 2023 EMEA ranking.

Other VC firms that made it into the top 20 VC ranking the year include Point Nine (#4, Germany), HV Capital (#5, Germany), Sequoia Capital (#6, USA), Bessemer (#7, USA), Global Founders Capital (#8, Germany), Seedcamp (#9, UK), Kima Ventures (#11, France), Balderton Capital (#12, UK), Creandum (#13, Sweden), Cherry Ventures (#14, Germany), Speedinvest (#15, Austria), Mangrove Capital Partners (#19, Luxembourg) and Entree Capital (#20, Israel). These firms are all seed-stage dominant.

Meanwhile, SoftBank (#16, Japan), Tiger Global Management (#17, USA) and Eurazeo (#18, France) have been the most successful in identifying future unicorns at the Series B and upper stages.

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