The Impact of Brexit on the European investor sentiment
Geo-political rife and a civil pre-disposition towards chaos is rarely a recipe for attracting investments. The United Kingdom has managed to pull in quite a lot of investments irrespective of the recent turmoil caused by Brexit.
The country has attracted over $7.7 billion of investment through funds and business ventures despite the conjecture of economists and fund managers over the UK’s viability as an investment destination.
Moreover, UK also remained the top destination for technical talent − though it has lost some share to neighbors Germany and France, according to a recent report from the London-based venture capital firm Atomico.
photo/ DANIEL DIAZ via pixabay
The year 2017 was a phenomenal one for young businesses and startups, with the amount of VC financing in Europe breaking records, even as that capital was spread among fewer deals. And throughout the continent, the VC landscape was littered with familiar names as well as new names, coupled with the brouhaha over AI and its associated fields.
Even as investment surges, British optimism in the startup scene still pales in comparison with that of other European nations. Where France has introduced its own tech-visa, Germany under Angela Merkel, has had a definitive growth of startup in Berlin.
Several things depend on Brexit’s current predicament, both for London businesses and European startups. Data from Balderton Capital, a Europe-focused VC fund establishes London as Europe’s startup capital in 2016, in terms of capital invested, and the number of startups. More information and insight can also be found via Q8Trade trading.
As for all-round investments in the continent, European investors accounted for 56% of projects in Europe. While, US companies remained Europe’s biggest investors, European companies banded together, were the biggest source of the continents cross border flows (56%), with German, British and French companies in the bandwagon.
Chinese investors were up by 25%, where their companies launched 297 FDI projects in Europe in 2016. This is in spite of the fact that Chinese investments were cooling on the UK in favor of Germany, France and other continental destinations.
Among a panel of investors, those who have already invested in Europe are markedly more confident about the future of the European Union (69%) than those who have yet to invest here (45%).
Rajat Khare, the owner of Boundary Holding, a fund based out of Luxembourg, stated, “The environment in Europe is justifiably volatile. This could bring an unprecedented damage to the startups in Europe. At the same time development initiatives could prove to be an opportunity for cities, countries, funds and investors to invest in undervalued assets, and build spheres of unprecedented tech development.”
“With Brexit, you are recreating borders in a market that is already perceived by (non-EU) foreigners as a complex one,” says Christophe Bavière, chief executive of Idinvest Partners, a private equity firm focused on Europe.
With all that said and considered, Europe could certainly prove to be a proverbial gold mine for investors. And while investors would look to leverage the continent’s undervalued grip on the world’s tech sphere, developments after Brexit could manifest itself into a plethora of opportunities by 2019.
Author: Jacob Maslow
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