The report prepared by PFR Ventures and Inovo VC analyzes transactions on the venture capital (VC) market in Poland in 2023. According to this report, 399 companies managed to raise a total of 2.1 billion PLN from 210 different funds. This is a decrease of 42% year on year.
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According to the latest report prepared by PFR Ventures and Inovo VC, in 2023 the venture capital market in Poland experienced a significant slowdown. The total value of investments in the past twelve months was 2.1 billion PLN – 42% less compared to 2022, when startups collected a total of 3.6 billion PLN.
As the authors of the report state, the main reason for the decline was reduced activity of VC funds, especially those focusing on the growth phase. This was due to the global crisis, lack of large financing rounds and lower company valuations.
Aleksander Mokrzycki, vice president of PFR Ventures predicts that the first half of 2024 may be difficult for the Polish market due to the end of POIR programs, but the situation may improve in the second half of the year thanks to funds from FENG.
– In the face of the global crisis, VC funds, especially those investing in the growth phase, reduced their activity. This resulted in a lack of large rounds and a decrease in valuations. Hence the overall decline in investment value in 2023 – comments Mokrzycki.
Jakub Rusak
The biggest success last year was the funding round of the company ElevenLabs, which raised about 320 million zlotys, thus becoming a unicorn with a valuation exceeding 1 billion dollars. International investors such as Andreessen Horowitz and Sequoia Capital participated in the transaction, as well as Polish business angels. Karol Lasota from Inovo VC believes that the success of ElevenLabs will inspire the startup market.
– The success that the founders of ElevenLabs achieved in such a short time is an extraordinary inspiration for the entire startup ecosystem. This event can become an impulse for the entire VC market – points out Lasota.
The dominant type of investment in Poland were seed investments, with 380 transactions in 2023. Although the number of type A transactions increased by 27%, B rounds recorded a decrease of as much as 70%. The average transaction value also fell, reaching 4.1 million zlotys compared to 6.6 million zlotys in 2022.
In terms of VC funding, the greatest emphasis is placed on innovations in the health sector, which has been a trend for four years now. In 2023, they accounted for almost 16% of all transactions. The most popular business model remains the SaaS subscription model.
The recent years have also been a time of slowdown in the job market in startups. Out of 19 companies that raised the most VC funding in 2019-2023, 9 reduced the number of positions, although the overall number of employees in these companies remained at a similar level.
Jakub Rusak
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