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Venture capital valuations slide across Europe

A survey conducted by a partner at Anthemis Group has found that, while venture capitalists are still putting money into Europe, valuations have slid.

Sifted has just reported that Yann Ranchere, a partner at the fintech investor, spoke with more than 30 venture capital firms around the continent, and found that while more than half are still investing they are doing so more cautiously.

All respondents said, too, that valuations were lower in 2022 than they had been in 2021 when it came to Series B+ funding. Only 14% of those in pre-seed and seed investing said that valuations had increased between the two years.

Ranchere told Sifted: “For all the doom and gloom in public forums, investors haven’t stopped investing and are actively deploying capital.”

He added: “The capital situation across stages has, however, changed in comparison to the previous years, with later-stage [investors] having to manage the drastic repricing in public markets and adverse short-term liquidity outlooks.”

This may be a reaction to a situation Expert Investor wrote about last year, in which we liberally quoted Matt Taibbi’s famous/infamous ‘vampire squid’ analogy.

Back then, we posited the venture capital money within Europe was creating a bubble.

Reported PitchBook at the time: “European VC investments have soared [in 2021], reaching €79.2bn across 7,663 deals, according to [our] data. Capital invested has eclipsed 2020’s record by over 86%.”

The piece then quoted Bjorn Tremmerie, head of technology investments for the European Investment Fund, who was speaking at an event called SuperVenture 2021. He said: “I’m worried that the behaviour of the ecosystem has gone in the direction of 1999 all over again. Valuations in my opinion are too high and we can see companies trade below their listing price. Investors are behaving like they don’t want to miss out on things and there’s too much FOMO.”

Pete Carvill

Pete Carvill is a reporter, writer, and editor based in Berlin who has been writing for the B2B and mainstream media since 2007. He is a contributing writer for Expert Investor and, in addition, has...

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