European startups raised $10.6B in VC funding in Q1 2023, down 66% YoY and 18% QoQ, per Crunchbase.
Seed-stage funding dipped 25% QoQ to $1.6B in the quarter, falling
below the $2B mark for the first time in two years. Late-stage funding
continued to contract consistently every quarter since the global
venture pullback started, with the total for the current quarter
amounting to $4.3B, down 77% YoY.
- U.S.-based
VC firms decreased their investments in European startups throughout
the quarter, intensifying the decline in venture funding.
- European
VC firm Newfund estimates that U.S. VC firms reduced their investments
in French startups from 40% in 2022 to 5% in Q1 2023.
- Fears of down rounds are growing after big startups Klarna and Stripe slashed their valuations.
- Klarna reduced its valuation by 85.3%, from its peak valuation of $46B to $6.7B in March 2023.
- In March, Stripe raised $6.5B in funding at a $50B valuation, nearly half of its peak valuation of $95B.
- Early-stage funding remained fairly steady at $4.7B, dropping only 7% QoQ from Q4 2022's total of $5.1B.
