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Despite reports to the contrary, VC market is not in hibernation

PitchBook summarized VC trends of the first half of 2022, released data suggesting positive economic outcomes for some start-ups.

Even with reported layoffs and weaker revenue growth at mature businesses, overall valuations have stayed in good shape, Pitchbook said.

State of early stage VC:

• QoQ early-stage valuations saw their first decline in ten quarters (as investors pull back)

• Deal values are increasing (QoQ +19%, as start-ups try to keep sufficient runway)

• Seed valuations grew by 33% since 2021 (maybe due to the time lag to fell the economic adverse conditions)

Late-stage VC has different picture:

• Deal value decreases (H1 22-on-full 2021 – 7%, as investors expect a delay in exits)

• Pre-money valuation is increasing (H1 22-on-full 2021 +10%)

Positive trends:

The biggest jump was in early-stage biotech and pharma.

Fintech saw seed and early-stage median valuations rise.

IPOs and the exit market was weak:

• Lack of IPOs — a shortage of liquidity. It means that the investors can not pull back their funds to invest in new deals or return to their limited partnerships.

• That would negatively affect new rounds and may translate in more thorough due diligence and protectionist terms if the current economic climate continues or worsens over the next 12 months.


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