Biweekly VC Insights by Uniborn #32

Inside: European VC deal/exit/fundraising stats and more
Barbara Krassner
🇬🇪 Uniborn Team
3 min read

Hey there! In this roundup, we delved into the final stats of 2023's venture landscape, layoff trends, and patterns of startup success. Subscribe so you don't miss the next one!

🔥As January comes to a close, the reflections on last year's VC landscape persist

The challenges of 2023 in the venture capital industry become even more apparent. Pitchbook's recent calculation revealed that while the volume of venture deals in Europe for 2023 surpassed the 10-year average — on a positive note — the figures still took a significant hit compared to the previous two years.

To illustrate the scope of the downturn, consider these numbers:

  • Deal value plummeted by nearly 46% in 2023 compared to the previous year (for context, the US indicator fell by 30%). The number of deals also saw a 20% dip, landing at about 10,797, in contrast to 13,557 in 2022.
  • Exit activity hit its lowest since 2013, with exits in 2023 totaling €11.8 billion, approximately 70.9% lower than the previous year. Noteworthy to mention is that exit value surged by almost 60% to €100.1 billion in the UK and Ireland, constituting over a third of the regional exit costs. In other European regions, exit values experienced a decline.
  • VCs faced challenges raising funds for their ventures, with only 141 funds securing €17.2 billion. This marks a nearly 52% and 39% decline, respectively, compared to 2022.

For a visual breakdown, check out the graphs below👇

VC deal activity in Europe. (Image: Pitchbook)
VC deal activity in Europe. (Image: Pitchbook)
And this is an exit activity. (Image: Pitchbook)
And this is an exit activity. (Image: Pitchbook)
Then, there is fundraising activity. (Image: Pitchbook)
Then, there is fundraising activity. (Image: Pitchbook)

Check the Pitchbook report for a deeper insight.

🔥 Amidst the challenges, some sectors thrived — AI and climate startups performed well. European open-source startups also proved themselves

In Q4 2023, European open-source startups claimed 25%, possibly 30%, of the top 20 spots in the ROSS Index, a ranking of trending open-source projects. Names like Wasp and Pythagora from Croatia, Tldraw and Trigger.dev from London, and Arc53 from Scotland took the lead.

Check the Tech.eu notice for a deeper insight.

🔥 How did layoffs unfold, and how does the cautious optimism of 2024 impact tech companies?

The tech industry witnessed over 240,000 job losses in 2023 — a staggering 50% increase from 2022. While this worrying trend seemed to plateau, recent announcements from giants like TikTok and Google, as well as smaller startups, suggest otherwise.

This serves as another signal for investors — recession is an enduring process, and companies "are continuing to pivot from a growth mindset to one based on efficiency in the face of stubborn market conditions."

Check the Techcrunch list for a deeper insight.

🔥 Beyond the hyperfocus on efficiency, what qualities hint at the potential success of today's startups?

Analyzing over 25,000 teams reveals:

  • Optimal team composition involves 3-6 executives, with single founders encountering challenges.
  • It holds significant importance to have a  CEO founder while having an external CEO is less promising.
  • Teams with a higher average age tend to achieve more success, with minimal differences observed between ages 25 to the early 40s.
  • Education plays a pivotal role, with both Master's and Ph.D. holders showing promise, while scenarios with Bachelor's degrees or no higher education pose challenges.

Check Andre Retterath’s estimates for a deeper insight.

Cover image: Unsplash

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