New Venture Investor Survey Shows Resilience and Optimism in Venture

PitchBook, the premier data provider for the private and public equity markets, today released findings from a new survey conducted in partnership with Web Summit, the world's largest technology conference, welcoming more than 70,000 attendees, including over 1,000 investors and 3,000 exhibiting companies, from November 11-14, 2024 at the MEO Arena in Lisbon, Portugal. The survey was completed by 100 global venture capital (VC) investors attending the conference. This is the 9th survey PitchBook and Web Summit have collaborated on and offers a look into technology trends, market sentiment, and diversity in investing. PitchBook is sponsoring the investor lounge at Web Summit, where investors in attendance can work, take meetings, and network.

Key Takeaways

• AI's Dominance: 43% of investors believe AI/ML will be the most disruptive technology over the next 5-10 years, reflecting continued enthusiasm for AI's transformative potential.
• Cautious Fundraising Optimism: 43% of investors expect the fundraising environment to slightly improve over the next 12 months, signaling optimism despite economic headwinds.
• Resilience Amid Economic Uncertainty: Even with rising interest rates and election impacts, 39% of investors report no change in their investment pace, highlighting the venture community's adaptability.

The European VC market has shown resilience in 2024, with a steady recovery in exits and continued capital flow into high-growth sectors like AI, SaaS, and life sciences. Femtech reached a milestone with Europe's first femtech unicorn, signaling progress in gender-focused innovation. Despite these positives, overall VC deal value is pacing below last year, and some sectors are facing challenges amid shifting regulatory and market conditions. Meanwhile, venture debt in Europe has already surpassed 2023 totals, providing essential financing to support growth-stage companies. As investor sentiment becomes more cautious in response to economic uncertainty, these developments highlight both emerging opportunities and ongoing challenges for investors navigating the year ahead.

"Our Q3 European Venture Report highlighted ongoing challenges for venture capital, with deal activity and valuations under pressure from economic headwinds," said Nalin Patel, EMEA Private Capital Analyst at PitchBook. "Yet, our investor survey at Web Summit reflects cautious optimism. Investors remain committed to transformative sectors like AI and are navigating these challenges with resilience, maintaining a steady investment pace despite rising interest rates. This blend of optimism and adaptability underscores the venture community's focus on long-term growth amid short-term uncertainties."

"It's clear from this year's survey that investors are not only adapting to economic challenges but are also diversifying their focus to capture opportunities in emerging sectors like AI, climate tech, and biotech," said Ricardo Lima, Head of Startups and Investors at Web Summit. "The resilience shown by the venture community, particularly in Europe, reflects a commitment to driving innovation across industries, even as they prepare for potential economic and political shifts. Investors are looking beyond immediate obstacles, prioritizing environmental impact, diversity and inclusion, and regulatory compliance to ensure their portfolios endure over the long term."

See findings and comparisons with last year's survey below:

Top technology trends and key investment criteria

• 43% of investors see AI/ML as the most disruptive technology over the next 5-10 years, followed by climate tech (14%) and biotech (8%). Interest in sustainability is rising, as climate tech's disruption potential grew from 9.9% last year.
• A strong commitment to AI-driven innovation is evident, as 82% of investors surveyed reported making at least one AI investment in the past 18 months.
• Nearly half of investors (49%) are now using AI and data analytics for competitive benchmarking, while 38% leverage AI to streamline due diligence, reflecting growing adoption of AI tools.
• When evaluating investment opportunities, investors prioritize both the executive team's experience and pedigree (26%) as well as business model strength (26%), followed by growth potential (24%), underscoring a focus on leadership quality and sustainable business fundamentals.
• Limited market size (47%) and an inexperienced founding team (46%) are the top red flags for investors, emphasizing the importance of market viability and team quality.

Investor sentiment on market conditions

• Fundraising optimism has increased, with 43% of investors expecting a slight improvement in the fundraising environment over the next 12 months, marking a shift from last year's more cautious outlook.
• Despite rising interest rates, 39% of investors report no change in their pace of investments, compared to 33.3% last year, indicating even stronger resilience in the face of economic pressures. However, 26% of investors surveyed have reported a minor slowdown in investment, reflecting a measured response to economic changes.
• Nearly half of investors (46%) anticipate adopting a more conservative approach due to the uncertainty surrounding the U.S. presidential election, mirroring last year's caution around geopolitical events.

Diversity and Environmental Considerations in investing

• Environmental impact plays a significant role in investment decisions, with 42% of investors prioritizing regulatory compliance and 41% looking for companies that drive positive environmental innovation, showing a shift toward proactive sustainability efforts.
• Representation of women in senior management has risen slightly, with 72% of firms reporting at least one woman in a senior role, compared to 66.7% last year.
• Gender diversity remains a focus, with 70% of investors surveyed having made at least one investment in women-led startups in the past 18 months. Nearly half of these investors are directing 25% of their investments toward these companies, reflecting steady support for diversity.

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About PitchBook

PitchBook is a financial data and software company that provides transparency into the capital markets to help professionals discover and execute opportunities with confidence, and efficiency. PitchBook collects and analyzes detailed data on the entire venture capital, private equity, and M&A landscape?including public and private companies, investors, funds, investments, exits, and people. The company's data and analysis are available through the PitchBook Platform, industry news, and in-depth reports. Founded in 2007, PitchBook operates globally with more than 3,000 team members. Its platform, data, and research serve over 100,000 professionals around the world. In 2016, Morningstar acquired PitchBook, which now operates as an independent subsidiary.

About Web Summit

Web Summit is a technology events company, bringing together a global community of founders, entrepreneurs, business leaders, and investors to connect and exchange ideas about the technology and trends shaping the world. Web Summit events ? including Web Summit in Lisbon, Web Summit Rio in South America, Web Summit Qatar in the Middle East, and RISE in Asia ? have gathered nearly one million people since Web Summit's beginnings as a 150-person conference in Dublin in 2009. Its newest event, Web Summit Vancouver, will launch in May 2025.