On January 29, 2025, you’ll be upgraded to the latest version of Equidam with updated valuation parameters. This may result, on average, in a slight valuation increase.
What’s changing
1 | Average valuations used in the Scorecard Method and maximum valuations used in the Checklist Method
We base our estimates on real transactions by country since September10th, 2022. Whenever we were not able to find a significant amount of real pre-money valuations in a given country, we broadened our perspective to the closest larger geographic entity (namely, continental region and continent). You can refer to the table at this link to see how they will change for your country specifically.
2 | Industry EBITDA multiples used in the VC and DCF with multiple methods
Our multiples are based on public market conditions at the beginning of the current year. Data is taken at the global level and aggregated by industry. You can refer to the table at this link to see how they will change for your industry specifically.
3 | Startup survival rates used in the Discounted Cash Flow methods
We determine startup survival rates by analyzing historical company data and fitting a function to forecast survival over time, which is then used to adjust the valuation by discounting forecasted cash flows according to the assessed risk of failure.
General comments on the effect of the changes
Over the last year (considering industry shifts) and last six months (regional shifts), there are a number of interesting shifts to look at. Overall, this update shows relatively low volatility is broadly positive, which should be a source of optimism in private markets.
Europe presents a dichotomy in venture capital activity. Eastern European countries, particularly Poland and Slovakia, have seen substantial growth in both top quartile and average valuations. This trend aligns with the broader European venture capital landscape, where Q2 2024 data showed a 6% increase in VC values. However, more mature markets like France and the Netherlands experienced modest declines, indicating a potential shift in investor focus towards emerging ecosystems.
The United States and Canada are also converging slightly, indicating that the US may not have much more room to grow. Canada recorded a healthier increase in top quartile valuations, while the US experienced only marginal gains— as Canada ‘catches up’. This aligns with recent data showing a 50% rise in the value of VC investments in Northern America in Q2 2024. However, the slight dip in average valuations in the U.S. (-0.58%) might reflect the restriction of capital going into smaller, non-AI startups after the concentration last year.
South America exhibits a similar pattern. Colombia’s significant growth in top quartile valuations (+28.68%) contrasts with Brazil’s decline (-11.89%). This shift broadly matches recent reports, with Latin America seeing a 12% increase in the value of VC investments in Q2 20243, and the trend elsewhere of convergence between established ecosystems and emerging ecosystems.
African markets show strong growth potential, with countries like Senegal and Burkina Faso posting steep climbs in top quartile valuations, and even the larger startup hubs like Nigeria also posting healthy increases. This trend is particularly noteworthy given the overall 80% decline in the value of VC investments in Africa reported for Q2 2024, suggesting a potential rebound or shift in investor focus within the continent or perhaps a ‘flight to quality’.
The technology sector, particularly software and data processing, has seen significant corrections in EBITDA multiples. This aligns with the broader trend of caution in high-growth tech segments, perhaps reflecting investor concern for disruptions created by AI. AI obviously remains a key focus area, with recent reports highlighting its continued importance in streamlining workflows and driving efficiencies in venture capital. Seeing a slight increase in valuation in Q4, FinTech remains a dominant sector across Emerging Venture Markets (EVMs). It secured $1.097 billion in funding and led in deal count with 128 deals in H1 2024, underscoring its resilience and attractiveness to investors. Oil-related services, equipment, and aluminum have seen substantial increases in EBITDA multiples, reflecting surging commodity prices and renewed investor confidence in the energy sector. This trend aligns with the growing interest in sustainable startups, as noted in recent venture capital outlooks.
The overall venture capital landscape shows signs of stabilization after a period of decline. Global dry powder reached a record high of $317 billion in 2024, indicating substantial available capital for investment. However, deal activity has been mixed, with a 30% drop in VC deal numbers reported in Q2 2024. South East Asia has emerged as a significant player, capturing 64% of total Emerging Venture Markets funding in H1 2024. This highlights the growing importance of the region in the global venture capital ecosystem. Conclusion The venture capital landscape in 2024 is characterized by regional disparities, sector-specific trends, and a cautious approach to high-growth tech investments. While some markets and sectors show strong growth, others face challenges. The abundance of dry powder suggests potential for increased activity, but investors remain selective, focusing on promising opportunities in emerging markets and sectors like FinTech and sustainable technologies
Please don’t hesitate to let us know if you have any questions. Thanks for using Equidam!
The Equidam Team