European technology venture capital surged in Q2 2004, with 199 companies raising $1.25 bln, a 21% increase YTY. After a sharp drop in biotechnology and healthcare funding in Q1 2004, the sector bounced back strong in Q2 to score the largest share of the pie, with $581 mln, or 46% of all European funding, for the quarter. The software sector fell back to second place with $213 mln, or 17% of all capital. While the number of active investors dropped 9% to 300, the average deal size increased by 25% to $6.4 mln. The United Kingdom took in the most cash of any European country, with nearly 28%, or $348 mln. Tech investments in Germany surprised everyone, soaring to $269 mln – its highest levels since Q4 of 2001, and an impressive 75% hike over Q1 of 2004. France didn’t fare so well, only attracting $121 mln, a 38% decrease from the previous quarter.