Q2 2023

Sifted tracked 1,202 early-stage transactions for the quarter, with an average deal size of €3.6m – including Series A rounds. 107 companies launched in 2023 raised their first rounds in Q2, a healthy sign for early-stage Europe.

While 23% lower than Q2 2022, early-stage deals — particularly at Series A — are showing continued resilience compared to later stages, which are down 50% for the same period. The top end of investors is crowded with early-stage dealmakers.

Energy startups deepened their pockets over the quarter, racking up €3.3bn (or 22% of total funding), led by climate infrastructure startups. Solar was the headliner, landing €779m — its third highest sum ever.

Healthtech bounced back to form in Q2 (€2.7bn, +43% quarter-on-quarter); as did B2B software providers (€2.3bn, +116%). On the other side, fintech’s gloom is far from over, checking out on a slight 5% increase at €2bn.

The billion-dollar GenAI question also gave some good answers: while not yet moving the needle, GenAI startups raised €427m in Q2 — a clear record — with big cheques for Aleph Alpha, Synthesia, Reka, Weaviate and Sana Labs.

Germany snatched second place over France for the first time in 18 months, notching €2.4bn in a quarter driven by megarounds, which were largely absent in France (€2.1bn). The UK, at €4bn, was still the place to be in Q2, and its dominance — though narrowing — still lacks a serious challenge.

On the lower distribution, Italy, Ireland, Finland, Norway and the Netherlands all had an improved quarter compared to the previous one.

The number of VC-backed exits climbed above Q1’s total, with 211 companies bought out this quarter — the most in a calendar year, and the third highest for any quarter. Average exit values have dipped sizeably compared to quarters past, however.

Despite cheaper price tags, M&As and IPOs alike remain elusive on the back of colder public markets, making for awkward VC-LP meetings (for a flavour of this, check out the frosty “Michael, I want my money back” scene in The Big Short). Undisclosed transactions are on the rise, however, which may obfuscate actual M&A terms and delay conclusions until later in the year.