Those hoping for Europe’s venture market to recover in 2023 were disappointed as annual dealmaking totals came in significantly under those of the previous two years.
Here’s a look at four key trends from PitchBook’s 2023 Annual European Venture Report that demonstrate how the downturn impacted deals, exits and fundraising.
European VC deal value fell 45.7% year-over-year in 2023, coming in at €57.1 billion. Although a steep decline from previous records, it was still the region’s third-highest annual total and higher than the 10-year average, demonstrating long-term structural growth.
The estimated number of VC rounds dropped 20.4% from 2022, returning to pre-pandemic levels.
The late-stage saw the heaviest decline in deal value with a YoY decrease of 50.6%, yet it did still claim the largest share of overall capital raised at €24.7 billion.
Early-stage VC accounted for €16.6 billion of overall VC deal value, a 36.1% drop from 2022—the smallest decrease of any of the stages.
Acquisitions accounted for almost 80% of European VC-backed exit value in 2023 despite capital generated by acquisitions falling 60.7% from 2022.
Public listing exit value dropped 90.2% to just €1.4 billion in 2023. Overall, European VC-backed exit value reached €11.8 billion last year—the lowest annual total in a decade.
One hundred and forty-one VC funds worth a combined €17.2 billion closed in 2023, representing declines of 51.5% and 39%, respectively, from 2022. Fund count also reached its lowest annual total in a decade.
The sharper fall in fund count shows that LPs have been committing more capital to larger, more established vehicles.
Read more: 2023 Annual European Venture Report
Featured image by Jeffrey Coolidge/Getty Images
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