TLDR:
- Despite a mixed market, Europe may see a venture capital revival according to a report from PitchBook.
- Main “pillars” dominating the VC landscape in Europe in 2024 are rates, recovery, and rationalization.
While the biotech investment scene in Europe has experienced a slowdown after a funding boom in 2021 due to COVID-19, PitchBook’s report indicates that venture capital firms might have more cash to invest in opportunities across Europe soon. The report focuses on valuations in Europe broadly, highlighting three main pillars – rates, recovery, and rationalization.
The report suggests trends in rates and recovery are heading in a positive direction with the European Central Bank and Bank of England cutting rates. However, the rationalization of valuations remains unclear, especially in areas like artificial intelligence with lofty price tags.
In terms of deal sizes, median deal sizes have increased across all stages in the first half of the year, with AI playing a significant role. The proportion of down rounds in Europe has trended upward, particularly in the U.K. and Nordic countries. Despite the challenging financing environment, PitchBook anticipates a recovery with potential rate cuts later in the year.
In 2023, Forbion and BGV announced their biggest biopharma funds to date, raising significant amounts for earlier and late-stage life sciences outfits. Venturing firms in Europe remain optimistic about the situation, emphasizing that biotech venture capital-led innovation thrives in tough market conditions.
