The latest PitchBook report indicates a positive shift in Europe’s venture capital (VC) sector, which appears to be rebounding after a significant decline in deal value last year. The report reveals that median deal sizes in Europe have increased across all stages in the first quarter of 2024.
Pre-seed funding has been particularly resilient, with both valuation and deal sizes increasing quarter-over-quarter. The median pre-seed pre-money valuation saw the most significant growth, reaching €4.6 million at the end of Q1 2024, up from €2.5 million in 2023.
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Survival of the Fittest and Market Stabilization
PitchBook notes a rationalization in the industry, where tougher conditions have led to the survival of higher-quality startups. The proportion of down rounds, where the pre-money valuation is lower than the previous post-money valuation, has plateaued this quarter. However, UK and Ireland startups experienced the majority of these down rounds, with median deal sizes in these regions at €2.8 million, lower than other European regions, and a 9% dip in valuations compared to 2023.
Sector-Specific Insights
The fintech sector led in terms of the largest median round at €3.3 million, followed by cleantech at €2.9 million. Consumer tech had the smallest average at €1.3 million.
Global VC Market Comparison
Contrastingly, a recent PitchBook report found that US VC funding hit its lowest level since 2016 in Q1 2024, indicating that dealmaking in global markets remains subdued.
The PitchBook report underscores the resilience and emerging growth within Europe’s VC market, despite ongoing challenges.
