What trends will we see in the venture capital market in 2023?
Posted: Sun Dec 22, 2024 6:34 am
According to experts, 2023 will be a year of declining value of larger funding rounds and fewer deals, and the first signs of this trend were already observed at the end of 2022. High interest rates, rising inflation and market uncertainty have led to a shift of capital from high-risk to lower-risk instruments. As a result, startup valuations are expected to decline, triggered by a correction in public company valuations. For example, the SaaS Capital Index between January and December 2022 experienced a decline of approximately 44%!
The market is eagerly awaiting the date of the taiwan phone code release of EU funding under the 2021-2027 financial perspective, which is estimated for the first half of 2023. Mature companies seeking financing could therefore reduce their valuations to attract the interest of activist investors seeking higher returns in the coming periods.
- "I expect fewer companies to raise funds in 2023, they will go to the best ones and, in general, at lower valuations. Software continues to 'eat the world', on the contrary, the pace of this process is accelerating, so more disruptive companies will emerge that change their sectors. So, investors with liquidity have a few or several very interesting months ahead," said Michał Olszewski, Partner at Movens Capital.
However, if PFR or NCBR funds are not released in the coming months, we can expect startup valuations to become more realistic and tech companies to plummet.
The PFR has yet to launch calls for new programmes, the funds from these new startup funds are likely to arrive not by the end of the year at the earliest, and the main wave will start in 2024. The funds from the previous funds, whose investment period ends in December 2023, will still be available. Some of the funds have exhausted all or almost all of their budget, so 2023 may turn out to be a year of relatively weak capital supply. This is also influenced by the weak economic situation outside Poland," says Michał Olszewski, Partner at Movens Capital.
The market is eagerly awaiting the date of the taiwan phone code release of EU funding under the 2021-2027 financial perspective, which is estimated for the first half of 2023. Mature companies seeking financing could therefore reduce their valuations to attract the interest of activist investors seeking higher returns in the coming periods.
- "I expect fewer companies to raise funds in 2023, they will go to the best ones and, in general, at lower valuations. Software continues to 'eat the world', on the contrary, the pace of this process is accelerating, so more disruptive companies will emerge that change their sectors. So, investors with liquidity have a few or several very interesting months ahead," said Michał Olszewski, Partner at Movens Capital.
However, if PFR or NCBR funds are not released in the coming months, we can expect startup valuations to become more realistic and tech companies to plummet.
The PFR has yet to launch calls for new programmes, the funds from these new startup funds are likely to arrive not by the end of the year at the earliest, and the main wave will start in 2024. The funds from the previous funds, whose investment period ends in December 2023, will still be available. Some of the funds have exhausted all or almost all of their budget, so 2023 may turn out to be a year of relatively weak capital supply. This is also influenced by the weak economic situation outside Poland," says Michał Olszewski, Partner at Movens Capital.