Investment in Progress

New Report: International investors eating our lunch?

by Florian Kandler

The good news: this year’s Startup Report Austria (3rd annual edition) shows the growing relevance and influence of Business Angels in the Austrian startup financing arena. The other news: more international investors join funding rounds at an increasingly early stage.

Are international investors going to eat Austria’s Business Angels lunch?

Startup Report Austria in its latest edition lists Austrian funding deals of a quarter of a million Euros and above closed in 2017. All information in the report is confirmed by the founders. The report aims to be the most complete, freely available list of funding deals to give the ecosystem and especially aspiring founders in Austria the impulse: wow, look – it can be done in Austria! But it also includes Q&As with the startups’ founders with fundraising tips and insights. More than half of all the funded startups’ founders participated. The goal being: share your knowledge – pay it forward! As we all agree, one of the pillars of a successful startup ecosystem.

When I analyzed the data this year’s report, I found a couple of very interesting trends. The data, which was provided by the founders, showed that Business Angels have been part of more funding deals than in the years before. And moreover, data showed that pure Angel-syndicates also did larger rounds than in previous years.

The growing number of educated Angels in Austria, as well as their collaboration and growing experience of syndicating larger rounds appear to be boosting Austria’s funding market.

The other big trend was to be found in the percentage of deals that had substantial participation from international investors. The overall percentage increase compared to the previous years – 65% across all deals above €250k. But especially smaller deals (above €250k but below €500k) showed a strong, steady increase of international investor participation: in 2015 at 28%, in 2016 at 39% and in 2017 already at 67%!

Austrian startup founders appear to be seeking investment from international investors more often and far earlier than in previous years. A trend that can both be an opportunity and a threat to local Angels and VCs. From the founders’ perspective (and hey, that’s mainly the hat I’m wearing) this is encouraging and yet another strong sign of a blossoming startup scene in Austria.

The full report can be found at: www.startupreport.at

  Thank you for this analysis, Florian!