Invest Europe, the association representing Europe’s private equity, venture capital and infrastructure sectors, as well as their investors, today released its 2020 Central and Eastern Europe Private Equity Statistics.
Second-best year for VC investment and private equity exits across the region
Private equity firms invested in a record 566 companies in Central and Eastern Europe in 2020, as the industry supported dynamic SMEs and start-ups that will fuel the recovery from the impact of COVID-19 and underpin long-term economic and social development across the region. The report shows that the number of companies receiving private equity investment increased by 15% on the previous year’s record and beat the five-year average by 46%.
Venture capital was the driving force for company investments in 2020 as firms backed 474 start-ups and scale-ups with total investment of €358 million – just 4% below the all-time high achieved in 2019. Overall private equity investment slipped to €1.7 billion in 2020, mainly due to the absence of large buyout transactions involving equity commitments exceeding €300 million during the period.
Poland was the leading destination with a quarter of the region’s total investment value (€431 million) and home to almost a fifth of the companies receiving funding. By investment value, it was followed by Estonia with 21% of the CEE total, the Czech Republic (17%), Hungary (14%) and Croatia (9%). Hungary was the leading destination for investment by deal number with 236 companies receiving €226 million in funding, 220 of those were venture capital. Poland reported a total of 105 new investments, of which 82 were venture deals. Across the region and all investments, Information and Communication Technology was the leading sector, accounting for almost half of companies backed, while Consumer Goods and Services ranked second.
Public offerings fuelled a strong year from private equity exits in 2020, drawing attention to the strength and potential of companies being created in CEE. Exits increased by 47% to €1.4 billion, measured at historical investment cost, with public listings hitting a record of €690 million. The statistics show that the CEE region more than doubled its proportion of European exit value to 5.8% in 2020.
Private equity fundraising for investment in CEE dropped to €1 billion as fundraising cycles meant that the region’s large fund managers were not in the market raising new funds. But, the venture capital sector raised €667 million in 2020, the second-highest total on record, positioning the sector for a sustained high level of investment activity in the coming years.
You can find the full report below.