Although it is very possible to see some changes by the end of the year, quarterly trends can set the tone for how valuations trend through the year.

A new “Q1 2024 European VC Valuations Report” published by PitchBook, highlighted key valuation trends across stages, sectors, and regions during the quarter. 

Here are the key takeaways:

The pre-seed stage continues to demonstrate remarkable resilience in terms of valuations, a trend that persisted from the end of 2023 through Q1 2024. Both valuations and deal sizes saw an increase quarter over quarter, with the median pre-seed pre-money valuation experiencing the most significant rise, reaching €4.6 million by the end of the quarter, up from €2.5 million in 2023.

While down rounds experienced a slight uptick, they also show a sign of potential easing of this trend. In Q1 2024, down rounds increased to 21.7 per cent, slightly up from 20.8 per cent in 2023.

Notably, the majority of down rounds were attributed to startups in the UK & Ireland, with the largest round associated with late-stage life sciences startup Mission Therapeutics. However, up rounds saw a slight increase to 76.3 per cent, surpassing the historical average for the first time since 2021.

Analyzing key verticals in Q1 2024, fintech led with a median round of €3.3 million, followed by cleantech at €2.9 million, while consumer tech had the smallest average at €1.3 million. In late-stage deals, biotech & pharma claimed the largest median round at €9.7 million, trailed by climatetech at €6.9 million.

Median deal sizes in Q1 2024 were notably larger in the DACH region for earlier stages, reaching €7.0 million, more than doubling from €3.8 million in the previous year.

However, in late-stage deals, France & Benelux recorded the highest median deal sizes at €8.0 million in 2023, followed by DACH and the Nordics. UK & Ireland deal sizes were comparatively lower at €2.8 million, reflecting lower valuations in the region, which started 2024 at €10.2 million, a 9.1 per cent decrease compared to 2023.

Europe saw an increase in active unicorns, totaling 139 as of Q1 2024, with four new additions during the quarter and only one exit in the VC ecosystem. Half of these unicorns were in the software-as-a-service (SaaS) sector, indicating a positive outlook for a vertical that has faced significant valuation adjustments, particularly in the mature market segment. Unicorn deal value also displayed signs of recovery in Q1.

While exit valuations in 2024 have shown resilience, exit activity remains subdued. In Q1, the median exit valuation stood at €22.7 million, slightly lower than the €23.2 million recorded in 2023.

Lead image: Pitchbook