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After Brexit, London slowed down investments in Europe. While Europe continues to focus on the United Kingdom. A recent study in Research Policy, co-authored by Vincenzo Butticè, Annalisa Croce and Andrea Odille Bosio from the Department of Management, Economics and Industrial Engineering at Politecnico di Milano, and Simone Signore and Andrea Crisanti of the European Investment Fund (EIF) shows these findings.
The research examined more than a decade of venture capital (VC) investments in the UK and EU, distinguishing between pre-announcement, the uncertainty period (2016 referendum to formal exit), and post-Brexit stages. The result was an asymmetric response from investors on the two sides.
Politecnico di Milano’s Business Data Analytics Professor Vincenzo Butticè said, “UK investors reacted immediately, cutting back investments in Europe after the Brexit announcement. European investors, instead, waited for greater clarity before changing their behavior. This supports the idea that Brexit raised uncertainty in the market for financing innovative entrepreneurship.”
According to the analysis, after the 2016 referendum, UK funds drastically reduced their operations in continental Europe, maintaining a cautious approach and focusing on the domestic market. EU investors waited until after Brexit’s official implementation in 2020 before significantly boosting investments in British startups.
A possible explanation is that EU investment growth in the UK may stem from weaker fundraising by British funds, coupled with new partnership strategies between UK and EU investors to navigate post-Brexit barriers, as indicated by the analysis of syndicated investment data from funds in both regions.
The study provides a novel perspective on the reshaping of innovation-driven capital flows across Europe and their lasting implications for the startup ecosystem. Italy, with its modest VC share, can use Brexit as an opportunity to strengthen its foothold in Europe’s investment market.
More information:
Andrea Odille Bosio et al, How Brexit reshaped venture capitals market: An analysis of UK and EU investments, Research Policy (2025). DOI: 10.1016/j.respol.2025.105289
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Polytechnic University of Milan
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Brexit: Maintaining domestic focus, UK investors avoided European markets, study shows (2025, July 16)
retrieved 16 July 2025
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