The CB Insights report released yesterday confirmed expectations of strong valuation adjustment and early-stage resilience.
Globally, valuations of private technology companies came off inflated highs in early 2022 and returned to closer to historic values in the last quarter of the year.
Rising interest rates, volatility on stock markets and the difficulty of IPOs affected private technology companies in 2022. In the last quarter, the valuations of late and mid-stage startups saw the worst drops: a possible explanation is that this type of investor is more sensitive to changes in the open market and how much early stage investors evaluate a longer horizon.
Key conclusions from the technology valuation scenario in 2022:
Late and mid stage valuations fell significantly in the fourth quarter, recording drops of 24% to 50% 4Q 21 x 4Q 22;
Valuations in the early stage showed surprising resilience, even increasing by 3% 4Q 21 x 4Q 22;
In the United States, 44% of late stage deals in 2022 (and 50% in Q4 22) were closed with seniority or tranche payment structures — which represents an increase compared to the previous two years;
Global late stage business volume in 2022 fell 36% year on year, falling to levels seen in 2019 and 2020.
