June 30, 2023

Less than a third of soonicorn leaders think fundraising will pick up this year

Sifted polled 100 of Europe and Israel’s fastest growing SaaS startups to gauge the mood on fundraising

Startup founders are an optimistic bunch — but even they aren't predicting sunny forecasts for the tech economy.

According to a new survey of soonicorn leaders by Sifted, only 30% of tech leaders expect funding to pick up in the second half of this year. 39% of respondents — a mix of founders, CEOs and CMOs — do not expect Europe’s fundraising environment to improve in H2 2023, while 31% are uncertain.

Sifted polled 100 fast-growing software soonicorns in Europe and Israel for our latest Sifted report, sponsored by Sapphire Ventures; 54 responded.


Looking for money outside of Europe

Crucially, a sizeable share (37%) say they’ll be looking to sign term sheets with investors outside Europe to fund their growth — a surprising result, considering how successful this cohort has already been at raising large sums from European investors.

VC investment from the US and Asia into Europe has dropped consistently over the past two years amid an overall slowdown in tech funding, in favour of domestic or European funding — which ate up 64% of all funding so far this year, according to Dealroom data.

Still, 46% of respondents, many of whom are based in Germany and the UK, say they believe they can still bank on European funds for late-stage capital.

A vast majority (81%) of the responding cohort is convinced that cost-cutting times are coming to an end. That, of course, includes layoffs, which have continued since 2022. Only three companies said cost cutting would continue, while seven were unsure.

Future raise intentions

In our ranking — which listed 100 SaaS companies that are on a unicorn trajectory — 80 startups were either at Series B or C level, and will be looking to raise growth rounds in the future. But only 18% of respondents indicated a need or an intention to raise further funds within the next 18 months.

That aligns with wider trends at later stages; companies are raising less frequent and smaller rounds compared to the past two years.

In our SaaS ranking, 77% of startups last raised in 2022 or 2023 and so have much longer funding runways to rely on, as well as smoother revenue streams, sitting at an average of €16.3m for the previous financial year. They’ve raised at larger valuations — €300m on average, compared to €22m for early-stage — and are backed by investors with proven track records.

Gender distribution at senior level

Sifted also asked about the gender breakdown in senior positions. Respondents told us that, on average, 34% of their senior positions were filled by women — a slight increase on 2022, when startups in a similar ranking told us that 29% of their top jobs were filled by women.

The largest share by a tiny margin (25.6%) have between 31-40% of women in senior management positions, while 7.7% have more than 50%.

Generative AI use

We’re (almost) all using it, and our cohort is no different, particularly as some of the startups offer a variety of AI solutions as part of their core business models. 85% — spanning several sectors — confirmed they were actively using new GenAI tools in the workplace, while only six companies told us they hadn’t yet adopted the tech.


Click here to see the full report.

*Given the size and the selective nature of the respondent’s sample, this is not meant to advance findings as established ecosystem trends. Rather, it sheds some further light on the companies selected for our report. Answers are anonymised as per agreement with the respondents. 

Results were charted by Ruggero Di Spigna, startup analyst at Sifted.

Federico Scolari

Federico Scolari is a junior intelligence analyst at Sifted. Find him on LinkedIn