European venture funding climbs 3% in Q3, but early stage companies take a hit

European startups saw only a modest increase in fundraising during the third quarter as funding to the earliest stage companies dried up.

The numbers came from the latest report by Dow Jones VentureSource, released today. With a softer IPO market in the most recent quarter, this was just the latest sign that the European startup economy is cooling a bit after a blistering start during the first half of the year.

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Overall, European companies raised €2.3 billion ($2.92 billion) for 323 deals during the three months ending Sept. 30, according to the report. That’s up 3% from the €2.24 billion ($2.84 billion) in the second quarter, and up 36% from €1.69 billion (2.14 billion) raised a year ago.

Delivery Hero of Germany led the way with a funding round of €258.78 million ($328.16 million).

Hardest hit were the earliest stage companies, where funding fell 40% from the same period a year ago, according to the report.

For the year, European venture-backed companies have attracted €6.1 billion ($7.4 billion) in 1,089 deals. That’s 6% fewer deals but an increase of 38% in the amount invested.

European venture funds had a much tougher quarter. Venture capital fundraising fell to €600 million ($760.87 million), down 42% from the second quarter, though still up 50% from the same period a year ago.

London-based Advent Venture Partners’ Life Sciences fund topped the list of fund closings this quarter, with €114.60 million ($145.33 million).