The U.S. vs. Europe: comparing follow-on investment rates
Conclusion: Europe still has quite some catching up to do. This is no big surprise. But follow-on rates are an important indicator for a healthy VC ecosystem, and the ability of startups to scale. Dealroom data shows that the number of companies raising seed rounds has roughly doubled in last five years. But the proportion of startups continuing to series-A, B, C has declined. To some extend this is the natural result of increased risk-taking. But it will be usefule to keep track of this metric going forward, as European VC funding ramps up.
Notes: The average time between rounds is roughly 18 months. Therefore, it takes an average of nearly three years to move from Seed to Series B. For this reason, the data only includes cohorts from 2013 and earlier. The actual follow-on rate will increase over time and we will re-run this analysis later this year.
Originally published on Dealroom https://blog.dealroom.co/the-u-s-vs-europe-comparing-follow-on-investment-rates/