Within the last few years, the participation of crossover investors in VC deals increased to an all-time high of USD 60+bn globally (USD 6+bn in Europe) in 2021. However, there is limited dedicated research on this growing group of investors active in European private and public markets.
 
Therefore Deutsche Börse Venture Network and Dealroom.co wanted to uncover some of the recent trends and contribute to a better understanding of how crossover investors impact the European VC ecosystem and IPO market. The resulting report takes a closer look at the characteristics of crossover investors and their investment activities as well as the impact on the tech ecosystem and the latest developments.

Key takeaways

Crossover investors have risen to key players in the tech ecosystem: 

• The participation of crossover investors in VC deals increased to an all-time high of $60+bn globally and $6+bn in Europe in 2021. This represents 13% of the global and 8% of the European VC investments.

Bridging private and public markets by backing the companies’ growth track: 

• The initial investment of crossover investors is over 60% of the times at Series C+. With follow-up rates between  59% to 65%, crossover investors back companies pre- and post-IPO and show flexibility in holding periods.

Crossover investors can add global experience and network to IPO candidates: 

• Almost 25% of the latest European tech listings were backed by crossover investors. These companies went public 50% faster, 2.3x more often and at 148% higher valuation compared to companies without a crossover investor.

Recent market environment challenged the rebalancing of portfolio compositions: 

• Global VC investments by crossover investors in 2022 pulled back by nearly 70% (Europe 32%). However, crossover investments are expected to stay, with a less aggressive investment pace as in 2021.

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