Venture investors conflicted over rising valuations of emerging technology startups
LISBON, Portugal, Nov. 21, 2019 /PRNewswire/ -- PitchBook, the premier data provider for private and public equity markets, today released the findings from a new survey conducted in partnership with Web Summit, the world's largest technology event according to the Financial Times. The survey, PitchBook-Web Summit Venture Investor Survey, examines venture capital (VC) investment preferences in emerging technologies like AI, mobility, fintech, blockchain and more, alongside investor sentiment of the current economic climate. According to the findings, VCs are most bullish on AI/ML but have concerns over rising valuations and the rate at which unprofitable technology companies have entered the public markets.
The survey was administered to 264 VC investors at Web Summit and Venture, an invite-only event at the conference gathering leaders from funds like Seedcamp, Blackstone, Union Square Ventures, Lightspeed Venture Partners, Earlybird and more.
"It's not necessarily surprising VC investors responding to our survey are still prioritizing growth over profitability, given the very nature of venture capital; however, their view that rising valuations are overall negative for the venture industry is a noteworthy shift," said Steve Bendt, VP of Marketing at PitchBook. "High levels of capital availability and a preference for larger deals across all stages has helped fuel rapid growth and rising valuations. And according to PitchBook data, larger deals and valuations are likely to persist, meaning we have yet to see the full impact of the growth over profitability trend."
"It's interesting to see that even with the current questions regarding non-profitable startups, investors are still set on growth as the most important measure. Without any major market correction between private market valuations and public ones, it will continue to drive up the price they're going to have to pay to invest in early-stage startup," said Paddy Cosgrave, CEO and founder of Web Summit.
To download this data graphic to learn more about the key findings below, click here.
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