Aggregate post-valuations of European unicorn startups dropped 0.3% YoY from €472.2B ($508.9M) to €471.2B ($507.3B). This is the first time in the last five years that the cumulative valuations of European unicorns have stagnated. In each of the five previous years, the aggregate value increased by at least 50%. In some years, the aggregate value increased by 100%. The present market conditions have created a reversal in the valuation trend, resulting in a plateau in the unicorn count and the loss of unicorn status for a few startups. The unicorn count has remained flat at 128 from last year to this, the first time the count has stagnated since 2012. The funding slump has severely impacted startups that had high cash burn rates. In Q1 2023, unicorn startups raised €1B ($1.08B) in VC funding across 10 deals. Deal value and deal count declined by 87.5% YoY and 65.5% YoY, respectively.
Median pre-money valuations at the seed stage remained flat at €5.5M ($5.9M) in Q1 2023, with median deal sizes increasing from €1.5M ($1.6M) to €1.7M ($1.8M). Median early-stage valuations continued to slide for the third consecutive quarter, down 15.4% QoQ to $5.5M ($5.9M). The reversal in valuations has largely impacted late-stage and venture-growth startups. Median values of venture growth startups declined 40.9% QoQ to €25.3M ($27.3M) in Q1. However, median late-stage valuations showed a 26.9% QoQ increase due to the presence of an outlier in the dataset, namely German solar startup Enpal which raised €215M ($234M) at a €2.2B ($2.3B) valuation during the quarter. Without the presence of the outlier, Pitchbook expected the valuations to remain flat from the preceding quarter. Swedish buy-now-pay-later startup Klarna's valuation slumped to $6.7B, down 85.3% from its peak value of $46B. The startup reported nearly $1B (10.4B kroner) in full-year operating losses in 2022. In April 2023, Schroders Capital Global Trust marked down the value of its stake in European fintech startup Revolut by 46%. Median pre-money valuations of venture growth fintech startups dropped 59.7% QoQ in Q1 2023. However, valuations of early-stage fintechs increased to €22.1M ($23.8M) in the same period, 60% more than 2022's values of $13.8M ($14.8M). Pre-money valuations of late-stage energy startups dropped 68.9% compared to 2022. However, median seed and early-stage deal values increased 96.0% and 70.9%, respectively, over their 2022 values. The percentage of down rounds increased in Q1 2023, representing 18.8% of all deals. Down rounds were at their lowest in the decade in 2022, representing 15.3% of all deals that concluded in the year. Down rounds are expected to increase as more startups run short of cash runways and venture into the market for fresh capital. |
