European VC deal value falls sharply in Q1, PitchBook says

The Scalpel skyscraper centre in London, U.Okay.

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The worth and variety of enterprise capital offers fell in Europe within the first quarter as inflation and better rates of interest dampened capital deployment and firms got here below strain to scale back prices and enhance margins, PitchBook mentioned.

The worth of VC offers fell 32.1% quarter-over-quarter to 11.8 billion euros ($12.90 billion), the trade analyst mentioned in its Q1 2023, European Enterprise Report. The variety of offers fell 19.2%.

Noting that swathes of layoffs had been introduced within the quarter, together with cuts at main gamers reminiscent of Alphabet, Amazon and Meta, PitchBook mentioned the macro-economic panorama had develop into more difficult for corporations in search of financing.

It mentioned an extending runway – or the period of time between fundraisings for start-ups and rising corporations – can be a key theme this 12 months, together with additional layoffs throughout mature venture-capital-funded companies.

The worth of exit offers for European VCs fell 69.6% quarter-on-quarter to 1.6 billion euros, it mentioned, the bottom worth since Q1 2020.

PitchBook mentioned it anticipated exit exercise to stay quiet for the following few quarters amid the volatility seen in public markets previously 12 months.

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