European venture capital valuations and deal values showed “solidity” across financing stages in 2022 despite mounting uncertainty across financial markets, latest research from PitchBook revealed.
The region’s IT and energy sectors specifically saw an increased median deal value, and restricted energy supplies supported the energy sector, as did the growing attraction for renewable energy, according to the report.
Last year witnessed 47 new ‘unicorns’ emerge in Europe, the second highest on record. The cumulative unicorn count stands at 129.
Since Brexit, the French and Benelux regions have seen more activity. In the past five years, the region’s median pre-money valuation has grown higher than in the UK and Ireland for both early and late-stage financing – increasing 44.9% and 21.2%, respectively.
In contrast, the UK and Ireland region experienced a dip of 27.8% from €26 million to €18.7 million in median pre-money valuation amid political turmoil.
“Valuations, deal values, and step-ups, particularly at mature financing stages, cooled and fell from the peaks of the past two years. It appears public market struggles linked to depressed valuations have filtered into the mature stages of the VC ecosystem,” said Nalin Patel, lead analyst, Emea private capital at PitchBook.
The venture capital industry has also experienced the emergence of non-traditional investors over recent years, allowing portfolio companies to diversify their capital sources. This allowed businesses with non-traditional investors to flourish by gaining higher pre-money valuations compared to firms that did not have non-traditional investors, the report suggested.
Median deal value involving non-traditional investors increased over the last four years in all financing stages. But year-on-year deal value dropped by 15.8% in Europe last year.
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