European startups are taking longer to raise money between rounds as venture capital dealmaking remains slow.
The median time between funding rounds has grown across most series from last year, according to PitchBook’s Q2 2024 European VC Valuations Report. Only startups raising a Series B have seen the median time decrease.
The increase is particularly notable at the later stages. For European companies that are raising a Series C, the median is now two years, compared to 1.6 last year. For rounds later than Series D, it now stands at 2.3 years instead of 1.8 years in 2023.
During the VC gold rush post-pandemic, the time between rounds had been getting smaller as capital became more abundant. But with the downturn in 2022, this trend reversed as investors pulled back on deals.
In a more challenging dealmaking environment, startups have been focusing on cost-cutting measures to extend their runway instead of raising fresh funds. Many companies have also been waiting for valuations to recover. The increases in median pre-money valuations in the first half of this year may bring more companies into the capital-raising market.
For those that are raising capital, round sizes have been growing and therefore are likely delaying the need to secure additional funds. In H1 2024, deal sizes rose across all stages, with early-stage VC seeing the biggest increase—€1.8 million (about $2 million) compared to €1.2 million in 2023.
While many startups may be facing longer gaps between rounds, there are exceptions. French generative AI startup Mistral AI closed a €600 million Series B in June—just six months after its €385 million Series A. London-based autonomous driving company Wayve also took less than a year to raise its $1.05 billion Series C.
While H1 2024’s dealmaking numbers suggest the year will fall short of 2023’s annual totals, there are signs the pace is picking up. Deal value in Q2 2024 was up 24.4% quarter-over-quarter and 9.3% year-over-year, according to the latest European Venture Report.
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