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Laxman Pai, Opalesque Asia:

Both the number of VC deals and the total VC investment in Europe fell for the fourth straight quarter, dropping from $15.7 billion across 2,512 deals in Q4'22 to $9.8 billion across 1,533 deals in Q1'23, said a study.

The decline was particularly stark when set against the record number of VC deals and VC investment seen during the same quarter in 2022, said Venture Pulse - a quarterly report published by KPMG Private Enterprise.

VC investors in Europe were increasingly cautious in Q1'23, taking a heavier hand with their portfolio companies-scrutinizing their internal budgets, pressuring them to cut costs and become more efficient, and holding them accountable to agreed-upon milestones.

As per the KPMG report, over the next couple of quarters, VC investors could begin to pick and choose between their portfolio companies, pulling back from making follow-on investments in companies they don't believe can survive. This could spur M&A activity as startups look to sell to avoid failing.

Several government-backed initiatives were initiated in Europe during Q1'23 to support startup growth. The UK's budget included GBP3.5 billion to help the country become a scientific and technologic superpower, including funding to support next-gen supercomputing and AI research.

The UK also released a whitepaper on the regulation of AI. During the quarter, the German government also launched a €1 billion fund to sup......................

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