LONDON, April 18 Reuters The value and number of venture capital deals fell in Europe in the first quarter as inflation and higher interest rates dampened capital deployment and companies came under pressure to reduce costs and improve margins, PitchBook said.

The value of VC deals fell 32.1 quarteroverquarter to 11.8 billion euros 12.90 billion, the industry analyst said in its Q1 2023, European Venture Report. The number of deals fell 19.2.

Noting that swathes of layoffs were announced in the quarter, including cuts at major players such as Alphabet, Amazon and Meta, PitchBook said the macroeconomic landscape had become more challenging for companies seeking financing.

It said an extending runway or the amount of time between fundraisings for startups and growing companies would be a key theme this year, along with further layoffs across mature venturecapitalfunded businesses.

The value of exit deals for European VCs fell 69.6 quarteronquarter to 1.6 billion euros, it said, the lowest value since Q1 2020.

PitchBook said it expected exit activity to remain quiet for the next few quarters amid the volatility seen in public markets in the past 12 months.

1 0.9147 euros

Reporting by Paul Sandle; Editing by Sharon Singleton

Source Reuters