Report: VC-funded European companies will likely see valuations cool due to COVID-19

Report: VC-funded European companies will likely see valuations cool due to COVID-19 1

VC-backed European companies will likely see their valuations cool or fall due to the coronavirus pandemic as the year progresses. 

PitchBook’s latest ‘European VC Valuation’ report says that pre-money valuations across the financing stages remained resilient amid the emergence of the pandemic but notes that most venture capital deals were closed prior to the disruption. 

[Read: The do’s and don’ts of launching a side hustle to supplement your income]

Additionally, the report says that angel, seed, and early-stage European rounds could decrease as managers shift their focus inwards towards existing portfolio companies. 

Coinbase 3

Rapid late-stage valuation growth is also expected to taper during the recessionary environment, the report says. 

According to the report, non traditional investment is also likely to be affected, adding to downwards pressure on venture capital deal sizes and valuations.

“Valuations associated with rounds involving non-traditional investor participation will likely fall in the near term, in line with an overall depression in valuations across the board. Non-traditional investors may focus on their primary markets instead of VC during the looming downturn,” the report states. 

On another note, it observes that aggregate unicorn value growth has been strong but this too may be subject to a decrease. 

“Valuations of high-profile loss-making unicorns could come under scrutiny as avoiding funding gaps and resource management become imperative. Unicorn valuations are likely to flatten or fall as growth becomes harder to capture in the current environment,” adds the report. 

Exit valuations continued to fall in Q1 2020, and coronavirus will drastically reduce the number of exits. As a result, the report says that mature startups will seek out follow-on and extension rounds to stretch runways rather an exit. 

However, exit opportunities will be further hindered by volatility in public equities and strategic acquirers facing financial problems.

It’s not looking good — but when there’s a will, there’s a way

These findings come after a separate report by PitchBook recently said VCs poured €8.2 billion into European companies during the first quarter of 2020.

Even though this year got off to a good start, analysts said the pandemic was expected to have a significant impact on deals in the ecosystem. It also threatened the flow of US capital into European tech companies.

On a more positive note, GP Bullhound’s latest findings showed Chinese investors were deepening their ties with Europe’s tech community.

The current literature largely suggests that the upcoming months will be challenging for many businesses — but as is the case in every crisis, where there are problems, there are also opportunities.

Published June 2, 2020 — 05:00 UTC

Report: VC-funded European companies will likely see valuations cool due to COVID-19 2
blank
About the author

E-Crypto News was developed to assist all cryptocurrency investors in developing profitable cryptocurrency portfolios through the provision of timely and much-needed information. Investments in cryptocurrency require a level of detail, sensitivity, and accuracy that isn’t required in any other market and as such, we’ve developed our databases to help fill in information gaps.

Related Posts

blank

E-Crypto News Executive Interviews


blank

bitcoin
Bitcoin (BTC) $ 38,200.00
ethereum
Ethereum (ETH) $ 2,505.86
tether
Tether (USDT) $ 1.01
binance-coin
Binance Coin (BNB) $ 323.92
cardano
Cardano (ADA) $ 1.34
xrp
XRP (XRP) $ 0.704769
usd-coin
USD Coin (USDC) $ 1.00
dogecoin
Dogecoin (DOGE) $ 0.197108
polkadot
Polkadot (DOT) $ 17.50
binance-usd
Binance USD (BUSD) $ 1.00
USD
EUR
GBP
bitcoinBitcoin (BTC)
$ 38,200.00
ethereumEthereum (ETH)
$ 2,505.86
tetherTether (USDT)
$ 1.01
bitcoin-cashBitcoin Cash (BCH)
$ 531.88
litecoinLitecoin (LTC)
$ 137.74
bitcoinBitcoin (BTC)
32.148,13
ethereumEthereum (ETH)
2.108,87
tetherTether (USDT)
0,849990
bitcoin-cashBitcoin Cash (BCH)
447,62
litecoinLitecoin (LTC)
115,92
bitcoinBitcoin (BTC)
27,494.64
ethereumEthereum (ETH)
1,803.61
tetherTether (USDT)
0.726953
bitcoin-cashBitcoin Cash (BCH)
382.82
litecoinLitecoin (LTC)
99.14

Automated trading with HaasBot Crypto Trading Bots

Crypto Scams

blank
The World’s Most Infamous Crypto Hacks and Scams
July 31, 2021
Cryptocurrency Exchanges
Cryptocurrency Exchanges and the Plague of Scams and Bans
June 29, 2021
blank
What Role Do Cryptocurrencies Play In The Era Of Ransomware Attacks?
June 9, 2021
Crypto Scams On The Rise As Market Enters Bull Cycle
Crypto Scams On The Rise As Market Enters Bull Cycle
December 22, 2020
Harpreet Singh Sahni perpetrated the Plus Gold Union Coin (PGUC) scam
Sydney Concert Promoter Harpreet Sahni Involved In $50M Crypto PGUC Scam
November 2, 2020

Blockchain/Cryptocurrency Questions and Answers

Short-Sell Cryptocurrency
How to Short-Sell Cryptocurrency: A Brief Overview
July 17, 2021
Klaytn
What Is Klaytn (KLAY) And How Does It Work?
July 16, 2021
Cryptocurrencies
Our Crypto Roundup Interview Asks- Do Cryptocurrencies Have a Future?
July 15, 2021
Solana
What Is Solana (SOL) And How Does It Work?
June 26, 2021
blank
What Is Plethori Platform And How Does It Work?
June 12, 2021


CryptoCurrencyUSDChange 1hChange 24hChange 7d
Bitcoin38,243 0.87 % 0.83 % 2.13 %
Ethereum2,512.0 0.92 % 0.65 % 9.57 %
Tether1.010 0.28 % 0.34 % 0.10 %
Binance Coin324.00 0.40 % 0.56 % 3.35 %
Cardano1.350 1.02 % 3.67 % 5.68 %
XRP0.7074 0.83 % 1.02 % 10.14 %
USD Coin1.000 0.04 % 0.27 % 0.09 %
Dogecoin0.1971 0.56 % 0.77 % 3.62 %
Polkadot17.51 1.24 % 1.52 % 22.24 %
Binance USD1.000 0.23 % 0.56 % 0.33 %

bitcoin
Bitcoin (BTC) $ 39,155.00
ethereum
Ethereum (ETH) $ 2,620.01
tether
Tether (USDT) $ 1.00
binance-coin
Binance Coin (BNB) $ 330.30
cardano
Cardano (ADA) $ 1.36
xrp
XRP (XRP) $ 0.720512
usd-coin
USD Coin (USDC) $ 1.00
dogecoin
Dogecoin (DOGE) $ 0.199582
polkadot
Polkadot (DOT) $ 18.50
binance-usd
Binance USD (BUSD) $ 1.00