In Q3 2023, deal value increased by 5.9% compared to Q2. Stage deal activity was down by 61.9% through Q3 2023 compared with the same period in 2022. Cleantech and AI technologies were common among top deals. AIN.Capital shares key points of the Pitchbook report.

Venture deal activity in Q3:

  • Venture capital deal value in Europe amounted to €43.6 billion in the first nine months of the year, down 49.1% from the first nine months of 2022.
  • Deal value in Europe has been increasing since Q1 2023, with Q3 deal value 5.9% higher than Q2. These indicators show a more sustained recovery in market activity.
  • 4 of the most significant 10 deals in Q3 are early-stage startups. This trend demonstrates an increase in deal activity since Q1 2023.

Top 10 deals in Q3 2023 in Europe:

  • The top 10 deals in Q3 2023 were focused on cleantech investments. The largest deal in Q3 was for low-carbon battery developer Verkor from France, that received €2.1 billion from several investors, including €600 million of debt.
  • The second largest investment was €1.5 billion round for green steel player H2 Green Steel. The investment will finance the construction of a flagship green plant in Sweden.
  • France & Benelux shows the most resilience in activity through Q3 2023, with deal value declining 37.7% versus 2022. Despite this, UK and Ireland still lead, where 33.0% of deal value in Europe sat through Q3 2023.

Nontraditional investor participation:

VC deal value with nontraditional investor participation declined to €32.3 billion through Q3 2023, 49.5% lower than the total through Q3 2022. Overall, this is in line with the declines seen on a market level, where deal value in Europe decreased by 49.1%. Nontraditional investors include sovereign wealth funds and hedge funds, among others.

VC exit activity in Q3:

  • According to the report, exit value reached €9.1 billion in the first three quarters of 2023 (72.8 % below the same period last year). 2023 was called the most depressed year for exit value since 2013.
  • In the first nine months of the year, exit value via public listings declined 79.8% compared with the same period last year.
  • Buyouts showed the most resilience (but still, with a 56.4 % decrease compared to the same period last year). 

Share of VC exit value by sector:

In Q3 IT hardware shows the most resilience, and energy saw the greatest decline in the first nine months of the year. For the largest sector, software, exit value declines by 69.3% through Q3 2023 versus the first three quarters of 2022.