WEB SUMMIT: VCs seek output, Does your SaaS Generate Caswebh? Down rounds: Accept that it Hurts Less
Lisbon – The debacle of the venture capital market is a deeper abyss than many imagine it. Liquidity for outings was “dried up,” said Nizar Tarhouni, principal director of institutional research at Pitchbook, here at the Web Summit. Last year, the worldwide venture capital market recorded approximately 1,000 transactions per quarter, putting around $ 400 billion in the pockets of investors each quarter.
This year, the number of transactions was divided by two and the exit liquidity melted by 70 %. In the third quarter, for example, there were 598 transactions, which have moved only $ 100 billion. The number of market top transactions (T2 2021) was 1,200 with a combined value of $ 426 billion.
“The liquidity of the whole year is lower than that of certain quarters of last year,” said the CEO of Pitchbook, one of the largest databases in the sector. The highest drop has been observed in outings through IPOs, which in recent years have been the main way to withdraw money from an investment. According to Pitchbook, the Introduction Entries on the stock market was $ 362 billion to their peak. In the third quarter, the source dried up – 86 billion USD.
*** The unfavorable scenario has also affected SaaS (Software AS A Service) companies listed on the stock market, one of the most important areas in recent years. According to Pitchbook, the Middle Middle Price/Sales of Listed SaaS companies culminated at 53x in the second quarter of last year.
Now this multiplier is a 3.3x low. Nizar said it was linked to the increase in the rate of liquidity consumption in these companies, which has continued to increase in the last quarters. “What the market says is that if a company has no positive cash flow, there will be no more interest,” he said.
*** In the midst of a 52% drop in venture capital investments since the last quarter of last year, investors are starting to make a decision. “During the last quarters, the market has become more and more favorable to investors and less favorable to the founders. It is the investors who dictate the terms of the contracts,” said Nazar.
According to him, the dry powder of money is still brutal, largely because it raised a mountain of money last year and 2020. “There are 562 billion dollars on the market that were lifted And have not yet been invested, [the biggest amount], “said Nazar. “Half of this is.” The amount is the money collected in 2020 and 2021. “
*** During another session, Josh Wolf, of Lux Capital, agreed that dry powder is excellent, but said that a large part of the resources will be invested in companies already in the funds portfolio, and not in new businesses. start -up companies. “Managers do not want to do depreciation and must finance the companies in their portfolio to survive,” he said.
*** In the same panel, the CEO of Techstars, Maelle Gavet (pre -priming director), said that the founders should “adopt” the lower table towers – towers made to valuations lower than previous funding. “The Tour du Bas means that there are still managers who are ready to invest in you. This does not mean that you must accept the conditions that managers offer you, because there are a lot of predatory offers over there “She said.
“But if you are in a position where you are offered an offer that makes sense for you to enhance online with the new market dynamics, consider it.” According to her, many techstars portfolio startups have made lower tricks and “came out on the other side in much better conditions”. The journalist moved to the invitation of Brivia, a communication group specializing in the digital transformation of major brands.