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1、EUROPEANVC ValuationsReportQ320222ContentsPitchBook Data,Inc.John Gabbert Founder,CEONizar Tarhuni Senior Director,Institutional Research&EditorialDylan Cox,CFA Head of Private Markets ResearchInstitutional Research GroupAnalysisQ3 2022 EUROPEAN VC VALUATIONS REPORTPublishingReport designed by Jenna
2、 OMalleyPublished on November 21,2022Click here for PitchBooks report methodologies.DataCharlie Farber Senior Data AnalystOscar Allaway Associate Data Analyst Introduction3Overview4Sectors9Regions11Nontraditional investors13Unicorns15Liquidity18Nalin Patel Lead Analyst,EMEA Private CNicolas Moura,CF
3、A Analyst,EMEA Private C3INTRODUCTIONQ3 2022 EUROPEAN VC VALUATIONS REPORTIntroductionVenture capital(VC)pre-money valuations remained robust through Q3 2022,as bearish macroeconomic outlooks spread across Europe.The drop off in public market capitalisations has not filtered into the VC ecosystem,wi
4、th the valuations of VC-backed companies staying strong.VC valuations are tracing above expectations given wider market conditions,and companies may be absorbing drops internally via reduced revenues and growth rates.Pressure is filtering into the VC ecosystem as recessions bite and reports of down
5、rounds,layoffs,and cost cutting surface.The valuations tied to fresh deals to be completed in upcoming months,with realigned revenue multiples,growth estimates,and business costs,could reflect greater declines.Through Q3 2022,VC deal value with nontraditional investor participation kept pace with th
6、e record set in 2021.With markets shifting considerably in 2022,the glut of nontraditional capital linked to the boom in VC funding during the past five years has flattened.Nonetheless,dealmaking has remained elevated from pre-2021 levels.The near-term challenges facing nontraditional investors and
7、the long-term benefits startups can provide creates an interesting backdrop as we enter Q4 2022.Unicorns continued pacing for a record year with 40 new unicorns emerging in Europe year-to-date(YTD)and Q3 deal value increasing 8.8%year-over-year(YoY)to 5.7 billion.This in itself shows the resilience
8、of the VC industry given the current macro climate,especially within the late stage of the VC ecosystem.There have now been more new unicorns YTD than initial public offerings(IPOs)in Europe,with 40 versus 39.And none of those 39 IPOs were unicorns,as the IPO market remains muted this year.The exit
9、market pulled back from 2021 levels but remains resilient and higher than pre-2021 levels.Disparity between the top and bottom quartile range for 2022 was almost twice as large as any pre-2021 figure.The resilience of European VC exits is witnessed by the median exit of 39.8 million,an increase of 2
10、.8%YoY and more than double from 2020 thanks to exits via acquisitions,which kept a healthy momentum.4OVERVIEWQ3 2022 EUROPEAN VC VALUATIONS REPORTOverviewVC pre-money valuations remained robust through Q3 2022,as bearish macroeconomic outlooks spread across Europe.The median valuation of companies
11、at all financing stagesangel,seed,early stage,and late stagepaced higher than 2021 full-year figures.The drop off in public market valuations has not filtered into the VC ecosystem,with the valuations of VC-backed companies staying strong.VC valuations are tracing above expectations given wider mark
12、et conditions,and companies may be absorbing valuation drops internally via reduced revenues and growth rates.Moreover,time lags could be in effect as readjusted VC valuations may not be announced when a funding round is completed.In contrast,a large-cap publicly listed stock is subject to daily pri
13、ce fluctuations and quarterly financial reporting requirements which can rapidly impact on a market capitalisation.Pressure on valuations is filtering into the VC ecosystem as recessions bite and reports of down rounds,layoffs,and cost cutting surface.Inflation has shaped markets in 2022 and interes
14、t rates have risen aggressively to combat upward pressure on prices.As a result,the availability of capital with low interest to fund the boom in private market strategies during the past decade appears to be over.Record European deal value was logged in 2021 and the pace through Q3 2022 has levelle
15、d off.While valuations have remained high,a more challenging global macroeconomic environment will slow spending for most companies,even if they operate in largely recession-proof sectors or regions.Investors could become more selective in coming months;however,with dry powder elevated prior to the
16、recent economic downturn,deals will continue to be completed.The valuations tied to fresh deals to be completed in upcoming months,with realigned revenue multiples,growth estimates,and business costs,could reflect deeper declines.General partners and VC-backed companies at different financing stages
17、 will expect contrasting challenges within the ecosystem at this time.For example,an angel or seed round with investor-friendly terms for a pre-revenue idea that is multiple years away from an exit could be an enticing prospect for investors.Whereas,a large pre-IPO late-stage round for a company wit
18、h a valuation that has ballooned during the past two years may be less appealing if a recalibration is anticipated.Angel and seedValuations tied to angel and seed rounds displayed strength through Q3 2022.Angel and seed companies are several years away from exit markets and public equity volatility.
19、Therefore,novel concepts with limited financial information and their long-term potential present an appealing proposition in the current climate.When companies are in their infancy,greater importance is placed on the founder,future market size,and product,rather than monthly financial metrics to de
20、termine investment appetite.As a result,we anticipate investment flows and valuations tied to angel and seed deals to remain relatively shielded from volatility in comparison to more mature funding stages.02468320002020212022*Top and bottom quartile rangeTop decileMe
21、dianBottom decileAverageAngel pre-money valuation(M)dispersion Source:PitchBook|Geography:Europe*As of September 30,20225OVERVIEWQ3 2022 EUROPEAN VC VALUATIONS REPORT0.00.51.01.52.02.520000212022*Top and bottom quartile rangeTop decileMedianBottom decileAverageAngel
22、deal size(M)dispersionSource:PitchBook|Geography:Europe*As of September 30,20220522000022*Top and bottom quartile rangeTop decileMedianBottom decileAverageSeed pre-money valuation(M)dispersionSource:PitchBook|Geography:Europe*As of September 30,20220123456
23、7820000212022*Top and bottom quartile rangeTop decileMedianBottom decileAverageSeed deal size(M)dispersionSource:PitchBook|Geography:Europe*As of September 30,20226OVERVIEWQ3 2022 EUROPEAN VC VALUATIONS REPORTIt is widely accepted in the VC industry that several high
24、-profile companies have been founded during challenging circumstances,which can help channel capital and resources into the best ideas that have the greatest chance of success.Through Q3 2022,median angel and seed pre-money valuations reached 2.9 million and 5.9 million,respectively,pacing above 202
25、1 figures.Meanwhile,median angel and seed deal sizes were 0.5 million and 1.8 million through Q3 2022.Strong valuations and deal sizes indicate capital inflows and risk appetite for new investments remain healthy despite a flattening of deal activity in 2022 YTD.Early-stage VCDespite gloomy outlooks
26、,the median early-stage valuation paced at 8.0 million through Q3 2022,up from 6.0 million in 2021.While there is potential for additional fluctuations in Q4 2022,valuations at the early stage have held up impressively during 2022 YTD.One factor helping early-stage valuations flourish is that compan
27、ies are years away from an exit,as is the case with angel and seed companies.Thus,lower multiples for mature international businesses could have less impact on a smaller companys valuation calculation,with more emphasis placed on unique characteristics of the business in question.As deal activity ha
28、s softened,another factor promoting higher valuations could be investors being increasingly selective and backing companies that command a premium.An abundance of capital has flooded into the VC ecosystem 007020000212022*Top and bottom quartile rangeTop de
29、cileMedianBottom decileAverageEarly-stage VC pre-money valuation(M)dispersionSource:PitchBook|Geography:Europe*As of September 30,20220522000022*Top and bottom quartile rangeTop decileMedianBottom decileAverageEarly-stage VC deal size(M)dispersionSource:Pi
30、tchBook|Geography:Europe*As of September 30,20227OVERVIEWQ3 2022 EUROPEAN VC VALUATIONS REPORTin the past two years,which has enabled a plethora of companies across different sectors and regions to be funded.In particular,this has occurred at the early stage,where competition and participation betwe
31、en nontraditional and international investors has risen.Deal sizes have stayed solid for companies at the early stage looking to transition to revenue generation,revise products,and increase adoption among users.Through Q3 2022,the median early-stage deal size topped 2.1 million,pacing above 1.7 mil
32、lion registered in 2021.Top and bottom quartile rangeTop decileMedianBottom decileAverage0500300350400Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3200022*Late-stage VC pre-money valuation(M)dispersionSource:PitchBook|Geography:Europe*As of September 30,20220
33、070Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3200022*Top and bottom quartile rangeTop decileMedianBottom decileAverageLate-stage VC deal size(M)dispersionSource:PitchBook|Geography:Europe*As of September 30,2022Late-stage VCThrough Q3 2022,the median late-
34、stage valuation paced above 2021s figure.However,diving deeper into quarterly figures,the median late-stage valuation declined for the second consecutive quarter from its peak of 19.7 million in Q1 2022 to 11.9 million in Q3.While valuations remain strong in comparison to recent yearly figures,the f
35、alls through 2022 indicate VC valuations are cooling at the top end of the ecosystem.Figures indicate rounds are closing for multi-billion-euro VC-backed companies,but we are no 8OVERVIEWQ3 2022 EUROPEAN VC VALUATIONS REPORTlonger seeing records tumble and new valuations over 10 billion,as witnessed
36、 during the past two years.We believe late-stage companies will continue to close multi-million-euro rounds,but the outsized valuations recorded during the past two years are unlikely to be surpassed in the current climate.Reported layoffs at high-profile late-stage companies,including Gorillas,Hopi
37、n,TIER Mobility,and C,are increasing scrutiny on costs across the VC ecosystem.Several companies that grew remarkably during the COVID-19 pandemic lockdowns are now focusing on capital efficiency rather than growth at all costs.As late-stage companies are closest to public markets in terms of revenu
38、es and company size,they have been the first to reflect troubles from public markets in the VC ecosystem.We anticipate further challenges for companies whose valuations swelled during the past two years,with layoffs and potential flat or down rounds on the horizon in the near term.Furthermore,with e
39、xit markets muted,largescale late-stage companies will be forced to extend their funding runways in the VC ecosystem.Time between rounds and up,down,and flat roundsRounds sizes and valuations have trended upwards during the bull run in VC during the past decade.The growth experienced by companies ha
40、s been sharper as larger revenues and subsequent valuations have been achieved at faster rates in the last five years.Time periods to achieve different financing stages have remained relatively flat during 14.9%17.4%0%5%10%15%20%25%30%20000212022*Proportion of VC dow
41、n roundsSource:PitchBook|Geography:Europe*As of September 30,20223.24.12.22.42.93.07.57.50000212022*AngelSeedEarly-stage VCLate-stage VCMedian years from VC-backed company founding by stageSource:PitchBook|Geography:Europe*As of September 30,20221:This per
42、centage was calculated with data from 1,741 deals.the past decade,with slight convergence between stages.For example,the median time from founding to completing a late-stage round has been 7.5 to 7.8 years since 2016 and was 8.0 to 8.9 years from 2012 to 2015.The median time from founding to complet
43、ing an angel or seed round has shifted from 2.1 years in 2012 to 4.1 years in 2022 YTD.Long-term shifts,including the bootstrapping ability of founders and lower costs associated with starting an online business,have likely impacted on timings for first-time financings for startups.Meanwhile,steeper
44、 growth trajectories for companies,fuelled by larger amounts of capital,have enabled VC-backed companies to accelerate towards a late-stage round or exit.While long-term shifts illustrate that time periods are evolving slowly,the current developing downturn that markets are in may alter time periods
45、.A prolonged recession may stifle activity and cause deals and exits to dry up,lengthening time periods across the ecosystem.While a widespread drop off is unlikely,lower spending associated with economic downturns will result in divergent impacts for stakeholders across the VC landscape.Certain com
46、panies that would have received backing during the past two years may not get funded in the current climate.In addition,flat or down rounds may increase in prevalence as portfolio companies and investors work together to prevent businesses from going bust.Through Q3 2022,the proportion of down round
47、s ticked upwards from 2021 figures and reached 17.3%.19SECTORSQ3 2022 EUROPEAN VC VALUATIONS REPORTSectorsSoftware companies in subsectors such as fintech,information security,and business&productivity have attracted substantial capital flows in Europe.The VC ecosystem is intrinsically linked to sof
48、tware,with high proportions of activity taking place each year.Therefore,alterations to deal sizes and valuations in the software sector will directly influence overall VC activity.Through Q3 2022,median software pre-money valuations paced above 2021 figures,indicative of the resilience displayed ac
49、ross the VC ecosystem.Across financing stages,median software deal sizes ticked upwards through Q3 2022 with the early stage reaching 2.9 million.2.32.94.96.87.310.019.323.40522000022*AngelSeedEarly-stage VCLate-stage VCMedian software VC pre-money valuati
50、ons(M)by stage Source:PitchBook|Geography:Europe*As of September 30,2022As discussed in our Q2 2022 European VC Valuations Report,late-stage healthcare valuations could be displaying early signs of flattening.Capital deployment accelerated within healthcare as attention was concentrated on the secto
51、r during the past two years.As COVID-19 restrictions have loosened,attention has shifted towards macroeconomic challenges due to geopolitical tension,inflation,and recovering sectors.Through Q3 2022,the median late-stage healthcare valuation was tracing marginally above 2021s figure;however,the top
52、decile is pacing 23.0%lower at 101.0 million.10SECTORSQ3 2022 EUROPEAN VC VALUATIONS REPORT0.40.51.21.91.82.95.06.602000022*AngelSeedEarly-stage VCLate-stage VCMedian software VC deal size(M)by stageSource:PitchBook|Geography:Europe*As of September 30,2022
53、Late-stage healthcare pre-money valuation(M)dispersionSource:PitchBook|Geography:Europe*As of September 30,2022020406080000212022*Top and bottom quartile rangeTop decileMedianBottom decileAverage11REGIONSQ3 2022 EUROPEAN VC VALUATIONS REPORTRegionsAs refer
54、enced in our 2022 UK&Ireland Private Capital Breakdown,high levels of VC activity are concentrated in the region.The median late-stage valuation in the UK&Ireland ticked downwards to 14.2 million through Q3 2022,from its peak of 14.9 million in 2021.Despite the drop at the late stage through Q3 2022
55、,median angel,seed,and early-stage valuations are pacing above 2021.Median valuations in the UK&Ireland indicate valuation reductions are taking place at the late stage and could potentially spread towards less mature financing stages.We are no longer seeing the record-breaking valuations witnessed
56、in the past two years as dealmaking has flattened.Mature late-stage companies are still closing rounds but valuations have cooled in 2022.We expect late-stage valuations in the UK&Ireland to remain flat in coming quarters.In 2022 thus far,the UK has faced unprecedented political instability.Recent t
57、ax rate announcements,new government cabinet ministers,and currency fluctuations have created uncertainty for operators and investors in the region.If concerns persist in the long run,we believe VC investment,company valuation development,and job creation could be harmed.The France&Benelux region co
58、uld benefit from the turmoil facing the UK in recent months.It is one of the largest VC ecosystems in Europe in terms of deal value each year and has expertise and resources for growing largescale companies.Through Q3 2022,the median late-stage valuation reached 13.2 million,pacing 32.8%higher than
59、2021s full-year figure.1.21.64.2000022*Angel and seedEarly-stage VCLate-stage VC3.61.80.8Median UK&Ireland VC deal size(M)by stageSource:PitchBook|Geography:UK&Ireland*As of September 30,20224.65.914.202468220000
60、22*Angel and seedEarly-stage VCLate-stage VC14.95.63.3Median UK&Ireland VC pre-money valuations(M)by stageSource:PitchBook|Geography:UK&Ireland*As of September 30,202212REGIONSQ3 2022 EUROPEAN VC VALUATIONS REPORT3.07.413.202468000022*Angel and seedEarly-s
61、tage VCLate-stage VC2.65.010.0Median France&Benelux VC pre-money valuations(M)by stageSource:PitchBook|Geography:France&Benelux*As of September 30,2022Median France&Benelux VC deal size(M)by stageSource:PitchBook|Geography:France&Benelux*As of September 30,20221.12.45.000162017
62、200212022*Angel and seedEarly-stage VCLate-stage VC4.12.01.013NONTRADITIONAL INVESTORSQ3 2022 EUROPEAN VC VALUATIONS REPORTNontraditional investorsNontraditional investor involvement in VC deal activity has gained traction during the past decade.2 Wealthy nontraditional investors have ent
63、ered the VC ecosystem to gain exposure to the long-term returns,synergies,and portfolio diversification that VC investments can offer.Consequently,a wider investor pool for startups has increased competition,round sizes,and valuations in Europe.With markets shifting considerably in 2022,the glut of
64、nontraditional capital linked to the boom in VC funding during the past five years has flattened.As broader VC deal value has declined in Q3 2022,deal value with nontraditional investor participation has followed a similar trend.We believe valuation development could slow if the economic downturn is
65、 deep and prolonged,as growth becomes challenging for portfolio companies.Through Q3 2022,VC deal value with nontraditional investor participation reached 59.2 billion,pacing marginally below the record 82.1 billion set in 2021.Dealmaking has remained elevated from pre-2021 levels.VC is a long-term
66、strategy that possesses a high-risk,high-reward return profile.Fund returns typically follow a power law,can be lumpy,and are regularly concentrated among a select few investments.VC investing can also produce outlier returns for investors and growth for companies that can counteract inflation,volat
67、ility,and market cycles impacting on mature businesses.An influx of capital has entered the VC ecosystem,but it can be tricky for nontraditional investors without experience to pivot into VC investing.Through Q3 2022,median VC deal sizes with nontraditional participation across all financing stages
68、are pacing above 2021 figures.Although oscillations can still take place in Q4 2022,the median early-stage and late-stage deal sizes climbed to 4.5 million and 10.2 million through the third quarter.Deal sizes tend to be larger with nontraditional investors involved,as they target more mature compan
69、ies that align with their investment expertise.Irrespective of investor type involved,median early-stage and late-stage pre-money valuations are also pacing above 2021s record figures through Q3.Down rounds reflect a minority of completed deals in the VC landscape.However,as announced down rounds ar
70、e completed,it could take a few quarters for the decline in valuations to feed into data.Even then,the falls could be isolated to specific financing stages,sectors,or regions.2:We define nontraditional investors as corporate VC arms,private equity firms,asset managers,investment banks,pension funds,
71、sovereign wealth funds,and hedge funds,among others,who are not primarily VC funds.28.68.5055402000182019 2020 202134.510.32022*Nontraditional investorNo nontraditional investorMedian late-stage VC pre-money valuations(M)Source:PitchBook|Geography:Europe*As of Septem
72、ber 30,2022Median early-stage VC pre-money valuations(M)Source:PitchBook|Geography:Europe*As of September 30,202210.214.24.56.2024682200019 2020 2021 2022*Nontraditional investorNo nontraditional investor14NONTRADITIONAL INVESTORSQ3 2022 EUROPEAN VC VALUATIONS REPORT
73、1.73.08.2024681012Angel and seedEarly-stage VCLate-stage VC2000182019 2020 20212.34.510.22022*Angel and seedEarly-stage VCLate-stage VCMedian nontraditional investor VC deal size(M)by stageSource:PitchBook|Geography:Europe*As of September 30,20224.25.87.612.012.215.820.126.836.
74、082.159.21,0661,3221,6951,9422,1352,5422,9633,2173,6274,5382,99002020212022*Deal value(B)Deal countNontraditional investor VC deal activitySource:PitchBook|Geography:Europe*As of September 30,2022The near-term challenges facing nontraditional investors and the long-t
75、erm benefits that startups can provide creates an interesting backdrop as we enter Q4 2022.Long-term industries with growing demandsuch as renewable energy,mobility,and food technologyappear to be solid bets in the current climate.Moreover,broader investment themes centred around investing in young
76、companies focused on artificial intelligence,machine learning,and digitisation of economies present interesting opportunities.In contrast,nontraditional investors could prioritise core investment areas alongside near-term liquidity needs and may not want to lock in significant sums of capital into a
77、 fund for multiple years.Capital allocations could be recalibrated amid the current environment,with the potential for increased usage of venture debt instruments or direct nontraditional investments for VC-backed companies.15UNICORNSQ3 2022 EUROPEAN VC VALUATIONS REPORTUnicorns40 new unicornsVC-bac
78、ked companies valued at 1 billion or morehave emerged in Europe in 2022 YTD,pacing for a record year of unicorn additions.This in itself shows the resilience of the VC industry given the current macroeconomic climate,especially within the late stage of the VC ecosystem.In Q3,deal value for unicorns
79、increased 8.8%YoY to 5.7 billion and deal count was higher than in the first three quarters of last year(69 YTD versus 67 last year).However,the picture for unicorns is not all rosy,and tougher times may lie ahead given the backdrop seen in public markets.Although unicorns are not directly affected
80、by public market volatility,they are not insulated either,and are usually the most impacted within the VC ecosystem because the businesses are closest to publicly listed companies in terms of maturity,financials,and size.As tech stocks plummeted some-33.1%YTD in Europe,3 we are seeing certain unicor
81、ns cutback on hiring and focus on improving operational efficiencies rather than a growth-at-all-cost approach.For example,London-based unicorn Hopin has been on a hiring freeze,and in July,cut 29%of its workforce in its second round of layoffs in five months.4 Flowing down from this,Q3 saw valuatio
82、n haircuts from software unicorns Klarna and SumUp.The Swedish unicorns“buy now,pay later”business took an 82.8%valuation cut as Klarna was valued at 6.4 billion,down from 37.5 billion a year earlier.Similarly,UK fintech SumUp took a 60%valuation cut,valued at 8.0 billion,down from 20.0 billion earl
83、ier in the year.As the 12-year long bull market in tech stocks fades away,it comes as no surprise that investors are becoming more scrupulous about valuations,especially in companies that focus on consumer spending.As inflation is biting consumers wallets and cost of living is rising,there is less a
84、ppetite for buying now if you cannot pay later.Unicorns are also lengthening their stay within the VC ecosystem.As covered in our Q3 2022 European Venture Report,the IPO market has emphatically cooled down in 2022,going from 175 IPOs in 2021 to 39 YTD.Conducting an IPO used to be the holy grail for
85、companies,but as private markets have exploded in the past decadegoing from 332 billion in 2012 to 3 trillion in 2022 in total assets under management across venture fundsunicorns will only pursue an IPO if public market conditions are favourable.Otherwise,they are happy to flourish within the VC ec
86、osystem.There are much less regulatory and reporting costs if a business stays private,and as long as VC funding is available,there is no pressure for unicorns to go public.In 2022 so far,there has been 545 million in VC dry powder globally.03504004505000204060801220
87、00022*Aggregate unicorn post-valuations(B)Cumulative unicorn countNew unicorn countNew and cumulative unicorn count and aggregate post-money valuation(B)Source:PitchBook|Geography:Europe*As of September 30,20223:“iShares STOXX Europe 600 Technology UCITS ETF(DE),”iSh
88、ares by BlackRock,n.d.,accessed October 20,2022.4:“Events Platform Hopin Cuts 29%of Jobs in Second Wave of Layoffs,”UKTN,Robert Scammell,July 13,2022.200620072008200920000022*Dry powderRemaining value5001,0001,5002,0002,5003,0003,5000Global VC Fund AUM(B)S
89、ource:PitchBook|Geography:Global*As of September 30,202216UNICORNSQ3 2022 EUROPEAN VC VALUATIONS REPORTCompany TickerDeal typeIPO date(2021)Current market cap(M)*Performance(%)since public listingWorking days since listingHQ locationArrivalARVLReverse mergerMarch 24496.0-90.6%419UKATAI Life Sciences
90、ATAIIPOJune 18491.6-76.0%357GermanyAUTO1 GroupAG1IPOFebruary 41,475.7-82.3%453GermanyBird RidesBRDSReverse mergerNovember 5 124.4-93.6%257NetherlandsCazoo GroupCZOOReverse mergerAugust 26245.3-96.0%308UKDarktraceDARKIPOApril 302,929.0 40.9%392UKDeliverooROOIPOMarch 311,862.5-77.9%414UKironSourceISRe
91、verse mergerJune 293,331.3-64.8%350IsraelMMNDYIPOJune 104,843.6-15.6%363IsraelOxford Nanopore TechnologiesONTIPOSeptember 302,589.1-36.7%283UKVTEXVTEXIPOJuly 21804.8-73.8%334UKWalkMeWKMEIPOJune 16757.3-64.8%359IsraelWiseWISEIPOJuly 77,787.3-26.0%344UKAll European unicorn public listings in 2021Sourc
92、e:PitchBook|Geography:Europe*As of October 31,202202040608002000202021New IPO countNew unicorn count2022*3940New IPO and new unicorn countSource:PitchBook|Geography:Europe*As of September 30,202217UNICORNSQ3 2022 EUROPEAN VC VALUATIONS REPORT1.61.71.81.71.
93、72.02.22.12.52.83.63.84.03.83.70.00.51.01.52.02.53.03.54.04.5020406080100120140Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q320022*Cumulative unicorn countAverage unicorn valuation(B)Unicorn count and average post-money valuation(B)Source:PitchBook|Geography:Europe*As of September 30,20220.0 x0.5x1.0 x1.
94、5x2.0 x2.5x3.0 x3.5x2002020212022*1.8x1.9x3.1x2.3x1.1x2.2xMedian and average unicorn step-up multipleSource:PitchBook|Geography:Europe*As of September 30,2022There have been more new unicorns YTD than IPOs in Europe,and none of the 39 IPOs were unicorns.In comparison,13 unicorns made thei
95、r public debut in 2021,but out of those 13,only Anglo-American cyber-defence company Darktrace has had a positive share price since.Unicorns will have those figures in mind when thinking about exiting through an IPO,which is why none have gone through the process this year and instead prefer to rema
96、in private.Despite more and more companies joining the 1 billion-plus unicorn club each year,we notice data is pointing to a cooling in valuations.The average unicorn valuation,which has been on the rise since 2018,has been dropping in 2022 for three consecutive quarters from 4.0 billion in Q1 to 3.
97、7 billion in Q3.Looking at median unicorn step-ups,5 we have a similar story as the figure has been rising for the last five years but has dropped this year from 3.1x post-money valuation to 2.3x post-money valuation,which of course was impacted by the previously mentioned down rounds of Klarna and
98、SumUp.In summary,there are more unicorns making more deals that are worth less,and they are afraid to go public due to the macroeconomic environment.We expect additional valuation haircuts as unicorns look to extend their VC funding runway to survive stagflation and play the long game.5:Calculated a
99、s the ratio of pre-money valuation of the new funding round over the post-money valuation of the previous funding round.18LIQUIDITYQ3 2022 EUROPEAN VC VALUATIONS REPORTLiquidityThe VC exit market pulled back from 2021 levels but remains resilient and higher than pre-2021 levels.This is reflected in
100、the disparity seen between the top and bottom quartile range for 2022,which is almost twice as large as any pre-2021 figure.The resilience of European VC exits is witnessed by a median exit size of 39.8 million,an increase of 2.8%YoY and more than double the 2020 figure.2021 was a standout record ye
101、ar for exits given the beneficial macroeconomic conditions of low interest rates,low inflation,and high valuationsspecifically within the tech sector.2022 will most likely be remembered as a year of market correction and policy tightening by major European economies as inflation skyrocketed,interest
102、 rates were pushed higher,and valuations came crashing down and experienced a reality check.Public listings,including IPOs,DPOs,and SPACs,which had a record year in 2021,were almost entirely muted in 2022 as only 39 IPOs were recorded YTD in Europe.Moreover,all of the IPOs were micro-capscompanies w
103、ith a market capitalisation of less than 300 millionas the more established companies witnessed the likes of Deliveroo and AUTO1 Group go public in 2021 and have their share price plummet since:Deliveroo is down 77.9%,while AUTO1 Group is down 82.3%since their respective public debuts.In 2022,median
104、 public listing exit valuation YTD was at its lowest figure in a decade at 20.8 million versus an average of 41.1 million in the past 10 years.As discussed earlier,market conditions have made public listing exits unfavourable as the 12-year-long bull market in public equities ended.This is the resul
105、t of valuations climbing irrationally high,most notably within the tech sector,but also a factor of too much cheap money circulating in the economy thanks to low interest rates since the Great Financial Crisis of 2008.This has resulted in a divergence between valuations and the underlying state of t
106、he economy.In contrast to VC-backed public listing valuations,acquisition exit valuations continue trending higher on all metrics tracked.We point out that although exit count of acquisitions is below 2021 levels,the median exit is at all-time highs at 40.9 million,up 47.2%YoY.As mentioned in our Q3
107、 2022 European Venture Report,software companies made up 51%of exit value YTD.And as explained earlier,techin particular,software as a sub-sectorhas seen valuations plunge this year alongside the haircuts we experienced within the VC ecosystem.This has created an opportunity for larger,more mature,b
108、etter capitalised,cash-rich companies to snap up software companies seeing their valuations slashed this year.For example,Remitly acquired Rewire for 78.4 million in Q3 to further expand its product offering and complement its customer base.We expect acquisition exits to continue making up the bulk
109、of exits in the current market dynamics while public listings remain subdued.0050060070020000212022*Top and bottom quartile rangeTop decileMedianBottom decileAverageVC-backed exit valuation(M)dispersionSource:PitchBook|Geography:Europe*As of September 30,2
110、02219LIQUIDITYQ3 2022 EUROPEAN VC VALUATIONS REPORTThe median time since founding to exit,as well as median time since first VC to exit,have remained relatively constant throughout the years,ranging from 7.5 years to 8.4 years for median since founding to exit,and ranging from 4.3 years to 5.5 years
111、 for median since first VC to exit.We expect that if the current macroeconomic environment continues to worsenfor example,if most European economies enter a recession in 2023then VC-backed companies will most likely remain longer in the VC ecosystem and those numbers will rise.If this happens,the ex
112、it market could continue to be muted,and as a result,this may also affect fundraising as less exit capital will be redeployed back into new VC funds,thus potentially affecting the overall growth of the VC industry in the long-term.05003003504002012 2013 2014 2015 2016 2017 2018 2019 2020
113、2021 2022*Top and bottom quartile rangeTop decileMedianBottom decileAverageVC acquisition valuation(M)dispersionSource:PitchBook|Geography:Europe*As of September 30,202202004006008001,0001,2001,4001,6001,8002,0002012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022*Top and bottom quartile rangeTop
114、decileMedianBottom decileAverageVC public listing valuation(M)dispersion Source:PitchBook|Geography:Europe*As of September 30,20228.05.300021 2022*Median years since founding to exitMedian years since first VC to exitMedian time(years)between founding and
115、exit and first VC investment and exit for VC-backed companiesSource:PitchBook|Geography:Europe*As of September 30,2022Additional researchCOPYRIGHT 2022 by PitchBook Data,Inc.All rights reserved.No part of this publication may be reproduced in any form or by any meansgraphic,electronic,or mechanical,
116、including photocopying,recording,taping,and information storage and retrieval systemswithout the express written permission of PitchBook Data,Inc.Contents are based on information from sources believed to be reliable,but accuracy and completeness cannot be guaranteed.Nothing herein should be constru
117、ed as any past,current or future recommendation to buy or sell any security or an offer to sell,or a solicitation of an offer to buy any security.This material does not purport to contain all of the information that a prospective investor may wish to consider and is not to be relied upon as such or
118、used in substitution for the exercise of independent judgment.Venture capitalQ3 2022 European Venture ReportDownload the report hereQ3 2022 US VC Valuations ReportDownload the report hereQ2 2022 European VC Valuations ReportDownload the report here2022 UK&Ireland Private Capital BreakdownDownload the report hereMore research available at