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The fat years are over. Sky-high startup valuations, limited partners who are desperate for investment opportunities and subscribe for practically every new fund – the almost heavenly conditions for venture capital are over for now. Fortunately.
The low interest rate environment in recent years has made venture capital one of the last havens for many institutional investors looking for attractive yields. During the pandemic in 2020 and 2021, this trend boomed. According to PitchBook, in 2019, 1,012 funds in Europe and the United States raised a total of $94.6 billion. In 2021, these figures skyrocketed to 1,575 funds and $183.9 billion.
The turnaround in interest rates last year resulted in a remarkable shift: As the combined fundraising volume of Europe and the US reached a new all-time high of $189.4 billion, the count of closed funds experienced a substantial decline. The total number of closed funds, 981, was marginally below the level before the pandemic, with a lower figure last observed in 2017. This suggests two things. First, venture capital continues to play an important role as an asset class in capital allocation among institutional investors. Secondly, these investors are now once again betting more heavily on teams with a track record.
We just recently learned how important this is when we successfully raised capital in March. Despite the bank turmoil and the disruptions in the venture capital and startup sector triggered by the collapse of Silicon Valley Bank, Heliad was able to raise around €7 million in fresh equity.
Given the gigantic sums of money raised worldwide last year, this may seem like a modest amount. However, under the new valuation regime, you no longer need billions to make good later-stage investments. According to data from AngelList, the average Series B valuation of U.S. startups in the fourth quarter of 2022 was $125 million. In the first quarter of the year, it was twice as high, at $250 million.
The fat years are certainly over. However, the new era also offers exciting opportunities for teams with a track record – there are still good companies out there and demand from institutional investors is still high.
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tonies SE is engaged in the manufacturing of children’s digital entertainment products. It offers a smart connected audio player, the Toniebox. The firm’s products are positioned at the intersection of four consumer markets, video gaming, traditional toys and games, connected audio and video streaming.
Patric Fassbender, Marcus Stahl
2013 / 2021
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flatexDEGIRO AG is one of the leading online retail brokers in Europe with over 2 million customers, offering low-cost brokerage, securities, and credit servicing for a broad range of securities in a total of 18 countries. Its products include equities, bonds, ETPs, ETFs and mutual funds.
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1999 / 2009
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NewtonX is the only B2B research company that connects forward-thinking companies with the exact professionals required to solve any problem. NewtonX partners with the world’s top consultancies, marketers, and technology companies to field large-scale quantitative surveys, facilitate qualitative interviews, engage in long-term consultations, and create customized research plans.
2016 / 2021
B2B Market Research (SaaS)
InstaFreight is a digital forwarding company for B2B customers, that enables fast and uncomplicated processing of freight transports. By offering innovative solutions and providing first-class service, they reduce the complexity of the supply chain and ensure absolute transparency for their customers and carriers.
Philipp Ortwein, Maximilian Schaefer, Markus Doetsch
2016 / 2022
Clark is an insurance platform providing transparent, cheap and comprehensive insurance coverage. By combining technology and insurance expertise, Clark offers users simple, fair and customer-centric insurance advice.
Dr. Christopher Oster, Chris Lodde, Dr. Marco Adelt
2015 / 2021
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Sebastian Marcin Siemiatkowski, Michael Jonathan Moritz
2005 / 2021
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Marius Till Fritzsche, Dr. Jens Rühle, Timo Josten
2012 / 2012
E-Commerce / D2C
Razor is a global consumer goods holding that partners with e-commerce merchants to acquire and operate profitable Amazon FBA brands in Europe, the US and beyond, scaling them to the next stage of development.
Tushar Ahluwalia, Dr. Oliver Dlugosch, Christoph Felix Gamon and Shrestha Chowdhury
2020 / 2021
MODIFI helps SMEs finance and manage their international trades. Serving over 1,000 buyers and sellers across >40 countries, MODIFI offers simple digital solutions that enable SMEs to trade like large corporates.
Nelson Holzner, Sven Brauer and Jan Wehrs
2018 / 2021
Enpal is a photovoltaics leasing firm that provides solar power systems. Its product already enables customers to reduce their electricity expenditure through a solar system and a green all-inclusive energy solution.
Mario Kohle, Viktor Wingert and Jochen Ziervogel
2017 / 2021
WorkMotion digitizes and simplifies time-consuming onboarding processes, helping companies to hire & onboard talents internationally, easily and compliantly in 160+ countries without a local branch. In addition to employment contracts, WorkMotion also offers services including pay slips, tax registrations, and personnel management.
Carsten Lebtig, Felix Steffens and Karim Zaghloul
2020 / 2022