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Europe’s venture capital gap and the financing of high-growth firms

Author

Listed:
  • Baumann, Adam
  • Gati, Zakaria
  • Vinci, Francesca
  • Wolf, Gerome

Abstract

This box examines EU venture capital market developments and the implications for firm financing and growth. Venture capital in the EU remains limited in scale and fragmented across national markets, with gaps particularly evident at later stages of financing where they are partially filled by non-EU investors. Although venture capital from outside the EU can help firms expand, a strong reliance on external investors may reduce Europe’s ability to retain the economic gains generated by its entrepreneurial ecosystem. At the same time, venture capital in Europe appears broadly well targeted towards high-performing firms, suggesting significant potential to support growth. Policy action to deepen and integrate the EU venture capital ecosystem can therefore help strengthen the EU economy. JEL Classification: E44, E22, O16, G28, F36

Suggested Citation

  • Baumann, Adam & Gati, Zakaria & Vinci, Francesca & Wolf, Gerome, 2026. "Europe’s venture capital gap and the financing of high-growth firms," Economic Bulletin Boxes, European Central Bank, vol. 5.
    • Handle: RePEc:ecb:ecbbox:2026:0005:1
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    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration

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