VCs are still investing in Europe, but startup valuations have come down — particularly at the latest stages — according to a new survey of investors in the region. 

The survey was conducted by Yann Ranchere, partner at fintech investor Anthemis Group, who compiled responses from 34 VCs investing in Europe. It echoes anecdotal evidence from VCs in the market that valuations and investment activity have slowed on the back of a public market downturn following the heady days of 2021. 

“For all the doom and gloom in public forums, investors haven’t stopped investing and are actively deploying capital,” Ranchere says. 

“The capital situation across stages has, however, changed in comparison to the previous years, with later-stage [investors] having to manage the drastic repricing in public markets and adverse short-term liquidity outlooks.” 

Here’s a look at the findings: 

No VCs have stopped investing — yet

Just over half of VCs said that they were still investing, but more selectively. No one said that they had paused investing. 

A decline in startup valuations is less pronounced in early stages

As has been noted by many VCs, valuations have not fallen as much at the earlier stages. That makes sense; the earliest companies are still years away from any sort of exit, as opposed to later-stage companies which might have been thinking about a public listing soon.

Ranchere asked investors whether valuations were higher than last year, stable versus last year, or lower versus last year. All respondents said that valuations were lower than last year at Series B+, and more than three-quarters said the same of Series A. 

Ranchere also asked investors to report on what a typical round looked like and what a more competitive, “outlier” round looked like, and calculated median values for seed and Series A. The results were as follows:

Typical seed round

• median round: €3m
• median valuation: €13.55m

Outlier seed round

• median round: €5.35m
• median valuation: €21.5m

Typical Series A

• median round: €9.4m
• median valuation: €35.4m

Outlier Series A

• median round: €21.8m
• median valuation: €84.95m

Sentiment is worse at later stages

And given the fall in valuations at later stages, it makes sense that sentiment was worse at the growth stage too. 

On a scale of 1-5, 1 being the most negative, 13% of VCs said they were feeling extremely negative about the funding situation for pre-seed and seed-stage companies thinking to raise a Series A, compared to 52% saying the same for Series B+ companies thinking to raise an even larger growth round.