European VC investment remains stable, albeit slightly subdued, as Crunchbase reports $11.8 billion in startup funding for the first quarter of 2024. While this is up from the previous quarter, it is lower than the same period a year earlier. U.K.-focused figures from HSBC Innovation Banking demonstrate a similar trend with investment slightly down from the previous quarter, indicating a challenging funding landscape for many businesses.
Two European companies, Kittl and Pigment, have recently completed successful funding rounds. Kittl, a Berlin-based business, raised $36 million in a Series B round led by IVP, building on a previous Series A round of $11.6 million from 2023. The company offers browser-based graphics tools for designers to create professional collateral, adapting to the cautious approach of VCs in the current economic climate.
Kittl initially focused on growing its user base rather than revenues, leading to a need for accelerated monetization when approaching investors in 2023. The company successfully demonstrated that customers were willing to pay for its freemium model, which helped secure funding for AI development and expansion into new markets. Pigment, a Paris-based business planning platform, raised $145 million in a Series D round, aiming to provide decision-making support for businesses using data analysis and scenario planning.
Pigment has tripled its annual recurring revenue and doubled its customer base globally in the last year, highlighting the appeal of the platform in a challenging market. CEO and co-founder Eléonore Crespo attributes the company’s growth to a commitment to product innovation and the ability to offer multiple use cases within organizations, expanding its reach across different departments.
Securing VC funding during a downturn involves demonstrating product value to clients and generating cash flow. As VC criteria may change rapidly based on market conditions, it is essential for businesses to stay informed and adapt to investor expectations. Both Kittl and Pigment have successfully navigated funding rounds by showcasing revenue generation and product innovation to attract investors in a competitive landscape.
In conclusion, European companies like Kittl and Pigment have shown resilience in securing VC funding despite economic challenges. By focusing on user growth, revenue generation, and product innovation, these companies have been able to attract significant investments and expand their market presence. As the funding landscape continues to evolve, businesses will need to remain agile and responsive to investor preferences to ensure continued success in raising capital for growth and innovation.
