European ETA Ecosystem Sees Record Growth in 2025

The European entrepreneurship through acquisition ecosystem has reached a significant milestone in 2025, with an unprecedented number of first-time searchers launching funds across the continent. According to data compiled from IESE Business School's annual search fund study and industry sources, the number of active European searchers has roughly doubled compared to three years ago.

Key Trends Driving Growth

Several factors have converged to accelerate ETA adoption in Europe:

• Baby boomer succession crisis: An estimated 2.4 million European SMEs will need to find successors in the next decade, according to the European Commission. This creates a historically large pool of acquisition targets for searchers.
• MBA program adoption: Leading European business schools - IESE, INSEAD, HEC Paris, London Business School, and WHU - have all expanded their ETA course offerings and alumni networks, producing a steady pipeline of trained searchers.
• Institutional capital: Dedicated European search fund investors have emerged, including Scipio Holding (Belgium), Seqos Capital (UK/Germany), and WAD Capital, alongside established US investors expanding their European allocations.
• Lower entry barriers: Self-funded and accelerator models have made ETA accessible to entrepreneurs who may not fit the traditional two-year MBA-to-search-fund path.

Country-by-Country Highlights

France has emerged as the largest European ETA market by number of active searchers, supported by a strong ecosystem around HEC Paris and INSEAD, favorable succession legislation (Pacte Dutreil), and BPI France's support for transmission d'entreprise.

Spain continues to punch above its weight thanks to IESE's central role in the global search fund community. The IESE Search Fund Center hosts the most thorough European data on search fund performance.

Germany and the DACH region represent the largest opportunity by number of succession-ready businesses (the Mittelstand), though cultural factors around business sales have slowed adoption relative to the market's potential.

The UK has seen growth particularly in self-funded searches and micro-PE models, with London Business School and Cambridge Judge developing active ETA communities.

Challenges Ahead

Despite growth, European ETA faces challenges: fragmented markets across different legal and tax jurisdictions, language barriers limiting cross-border searches, and less developed exit markets compared to the US. The industry also faces the ongoing challenge of demonstrating returns comparable to US search funds, where decades of data from Stanford's studies have built institutional investor confidence.

What This Means for Searchers and Investors

For aspiring searchers, the growing ecosystem means more resources, mentors, and co-investors available than ever before. For investors, Europe's search fund market offers potential for differentiated returns in a less competitive environment than the US, though with added complexity from cross-border deal execution.