European venture valuations have continued on their downward course as median price tags dip across all stages.
Here are five key trends from our Q3 2023 European VC Valuations Report that illustrate the trajectory of Europe's VC valuations in the first nine months of the year.
For the first time in a decade, the annual median early-stage valuation has fallen, dipping from €5.7 million in 2022 to €5.3 million this year.
As the venture downturn has progressed throughout the year, the impact felt by those closest to the public markets has trickled down into the earlier stages. On a quarterly basis, median early-stage pre-money valuations show few signs of recovery, with a decline of 18.4% from Q2 to Q3.
The median deal size for late-stage companies has continued to trend upward this year to stand at a record €3.5 million—a 9.4% increase from last year.
Notable deals including French battery developer Verkor's €850 million Series C and Zurich-based lender Teylor's €275 million round have helped push up the median.
Venture growth has seen the most severe declines in valuations, with the median pre-money valuation falling 26.1% to €22.9 million.
With interest rates expected to remain high and exit activity still muted, venture growth will likely continue to be affected by valuation cuts.
The percentage of European venture deals that are down rounds has reached its highest total since 2014.
In the first nine months of the year, 21.3% of investments were completed with a valuation haircut, compared to 14.8% last year.
Although acquisitions have accounted for the vast majority of exit value this year, the median valuation of exits via public listing continues to outpace that of acquisitions, with the gap widening year-over-year.
The median valuation for acquisitions fell to €23.2 million in the first nine months of the year, while the median price tag for public listings now stands at €40.9 million—up from €39.3 million in 2022.
Read more: Q3 2023 European VC Valuations Report
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This article originally appeared on PitchBook News