Investor caution over 2023 has resulted in challenging conditions for venture backed companies, who have found that the bar has been raised considerably when seeking investment. This has been coupled with a recalibration of valuations to pre-pandemic levels. Despite these headwinds, venture capital investors, by design, take a long-term view and we remain confident that companies will continue to successfully navigate this period of volatility.
In a broad market context, around 50% of investment activity has occurred outside London and the strongest sectors have been AI, digital health and medtech. These themes have been mirrored across our own practice, Mishcon Future.
For the Mishcon de Reya teams, the last year has also seen an uptick in advisory services to investors. Our collaboration extends beyond investment transactions, as we work closely with investors to identify innovative strategies for supporting and steering their portfolio companies.
Finally, the market generally has seen an increase in exits at an earlier stage than would have been expected previously, albeit at lower average valuations. We anticipate that this increased activity will continue into 2024.
Erika McIntyre, Partner in the Corporate and Venture Capital teams.