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  • Bilanz Capital

Private Investment (VC, PE) Trends in 2023

Updated: Jan 27





Delving into the dynamic landscape of private market (VC, PE, PIPE etc) investments confirms prevailing concerns. The need for companies to adapt their capital raising and spending strategies has never been more critical, given the fierce competition to tap into the ever-growing Drypowder.



In our recent market analysis:

 

1. Deal Closure Dynamics:

Deal closure rates have experienced a decline, ranging between 40% to 55%, resulting in an overall decrease of 44% in total deals. (Check the above graph, showcasing the Deal distribution by the ticket size).


Despite this, the average ticket size per deal remains relatively stable, indicating a resilient market for impactful opportunities.

 

2. Funding Trends:

Total funding amounts have seen a 37% reduction, with the USD 10 to 15 million and 50 to 100 million ranges experiencing more significant drops at 58% and 54%, respectively. This cautious funding environment reflects a selective approach, especially in larger investments. (Check the above graph, showcasing the Total amount distribution by the ticket size).

 

4. Stability in Average Ticket Size:

Despite the challenging environment, the stability in the average ticket size per deal suggests that quality deals continue to attract capital. Investors are maintaining a discerning approach, steering away from a "spray and pray" model.

 

5. Market Revival Indications:

Analyzing these trends against the backdrop of a massive dry powder of USD 20 Billion and a gradual timeline of prevailing winter exceeding 18 months, there are indications of a potential market revival soon. Opportunities may arise for those with a strategic and patient approach.

 

6. Extended Winter Impact:

Due to an extended winter, a decent number of funded startups have faced challenges in raising follow-on rounds. This presents a unique opportunity for early-stage investors to participate in more mature or ahead-of-the-curve startups at reasonable valuations.

 

In the face of these challenges, the importance of proven unit economics, working go-to-market (GTM) strategies, and maintaining reasonable valuations cannot be overstated. These factors will play a crucial role in attracting the right lead investor and ease the way to raise capital.

 

Our team is here to help you navigate these challenges. Should you have any questions or require further information, please do not hesitate to reach out. We appreciate your continued partnership and look forward to exploring new horizons together.


Thank you for reading!



 

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