PitchBook report – European VC Valuations report Q2 2024
Description
Key learnings:
- Valuation recovery with mixed rationalization: Valuations have continued to recover, particularly in early-stage investments, driven by AI and fintech sectors. However, market rationalization remains unclear, with lofty valuations still present in AI. Down rounds have also increased, with 23.3% of deals in Q2 being down rounds, raising concerns about further corrections.
- Pre-seed and early-stage resilience: Pre-seed and early-stage investments have shown the most resilience in terms of valuation recovery. Pre-seed median valuations rose to €4.4 million, and early-stage deal sizes saw significant gains. Early-stage fintech, in particular, led other sectors with median deal sizes of €17.8 million.
- Unicorn recovery but valuation risks persist: Unicorns showed signs of recovery, with deal value increasing by 12.3% YoY. However, many unicorns minted during the 2021 boom may face valuation cuts when they return to the cap table. Of the 141 active unicorns in Europe, 44 were minted in 2021, indicating potential downside in valuations as they undergo new rounds of funding.
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