A number of weeks in the past, Bloomberg reported that OMERS Ventures, the enterprise capital agency backed by the Ontario Municipal Staff’ Retirement System, was calling it quits in Europe simply 4 years after opening a London workplace, hiring a group and setting apart $332 million to spend money on the area.
On the outset, it could appear as if the lackluster state of the European enterprise market could have motivated the exit, however it seems that wasn’t the case. As an alternative, OMERS’ exit was fairly as a result of logistics associated to being a solo LP operation, a supply conversant in the matter instructed TechCrunch+.
OMERS Ventures didn’t instantly reply to requests for remark.
Though OMERS didn’t depart due to how issues are in Europe proper now, it wouldn’t have been that stunning if it did. The startup ecosystem in Europe doesn’t look that nice in the intervening time, with decrease deal and exit exercise than the U.S., which itself is struggling.
Europe had just one,332 offers within the first half of 2023, marking a lower of 34.2% from the second half of 2022 and a decline of 60.8% in comparison with the identical interval a yr earlier, in response to PitchBook. The U.S. is the world’s largest startup market in the intervening time, however the distinction in deal rely and exercise is stark, even accounting for the final slowdown: The U.S. had 6,514 offers shut within the first half of 2023.
European startups additionally appear to be discovering it exhausting to exit, or are at the very least unable to land offers at valuations they may like. By the primary half of this yr, startup exits solely generated €3.5 billion ($3.8 billion) in whole. If issues don’t enhance quickly, the European market will be unable to surpass, and even match, the exit quantity of any yr from the final decade.
Buyers from elsewhere on the planet appear much less , too. U.S. traders participated in 746 offers in Europe within the first half of 2023. in comparison with 1,704 a yr earlier, in response to PitchBook knowledge. Given how a lot U.S. traders have pulled again from the area, OMERS wouldn’t have been misplaced had it achieved so due to market situations.