2024 turned out to be a slower year for M&A in Europe than many bankers, investors and lawyers expected.
There were 858 exits of VC-backed companies in Europe last year, down about 11% from 2023 and off a whopping 37% from the frenzied days of 2021, according to new PitchBook data (which could still change as further deals are announced). The value of those deals, however, ticked up, largely thanks to Spanish luxury beauty and fashion company Puig’s $2.8bn public listing in May on the Spanish stock exchange. M&A deal value hit €61.8bn last year, up from €42.2bn the year prior.
“Otherwise it was a quiet year for European VC-backed exits, particularly on the listings front as companies avoided exits,” says PitchBook analyst Nalin Patel. “We expect exits to pick up in 2025 as market conditions improve.”
Among the largest deals in Europe last year was London-based biotech EyeBio’s acquisition by US pharma titan Merck for $1.3bn (upfront, with a potential eventual value of $3bn) announced in May; and Dutch file transfer service startup WeTransfer’s acquisition by Italian unicorn Bending Spoons in July for what PitchBook puts as $700m (Bending Spoons also snapped up the remains of beleaguered event tech startup Hopin last year).
2025 will be ‘great year’ for these startups to sell themselves
When it comes to dealmaking activity, Julian Riedlbauer, partner at investment bank Drake Star, says we’ve “reached the bottom now”. He points out that public markets have picked up momentum, and that stock prices and valuations are on the up.
Private markets tend to lag public markets, but “I think the valuations [this] year will be higher than [last] year” based on that momentum, he recently told Sifted.
He expects 2025 will be “a great year” for startups in the AI, mission-critical enterprise software and defence tech sectors to raise money or sell themselves. Those hot "companies have a lot more power than they used to,” he says — and it will “get even more intense, because I think a lot of investors were very careful deploying money in [2023], and they started to deploy more [last] year, but there is a capital overhang; there's a lot of dry powder out there that needs to be invested in the coming years.”
But not everyone is so sure M&A will be back big-time in 2025. "Exits markets are still challenging across exit types. Larger corporates that might come in for VC assets could be grappling with their own lower growth forecasts and rising costs,” says PitchBook’s Patel.
