Valuations for venture capital public listings in Europe took a big hit in the first six months of the year as the IPO market all but disappeared.
Public listings valuations reached a new peak last year as investors and companies took advantage of strong demand for tech, which resulted in a record number of public entries. As the tide turned in 2022 with widespread tech sell-offs and increased market volatility, valuations have dropped significantly.
The median pre-money value for public markets stood at €30.7 million (about $30.6 million) in H1, according to PitchBook’s Q2 2022 European VC Valuations report, which is some 56.8% less than at the end of 2021. VC-backed companies in the bottom quartile suffered the biggest drop with a 74.2% decline in the median valuation. For those in the top quartile, the median price tag fell by 22%.
The fall in European VC public listing valuations is explained by a significant drop in the number of such exits and their value. In H1, Europe saw 34 public listings for a combined total of €11.3 billion, a decline of 83.3% and 89% from 2021, respectively.
Despite the drop, the median valuation at exit via public listing remains elevated compared to pre-2021 levels. However, with a recession becoming more probable for Europe’s economies, VC-backed companies will likely continue to be reluctant to go public for the foreseeable future. If public listing activity slows further, valuations could soften even more.
Of those that went public this year, crypto investment platform Smart Valor topped the list in terms of the highest pre-money valuation at €710.3 million after its listing in February. Green hydrogen producer Lhyfe followed at €300.8 million, going public in May.
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