Pitchbook just released its Q4 2024 Venture Monitor Report. It’s a good read and very comprehensive on the state of venture investing. One section that really stood out relates to exit values and volumes of VC backed companies. According to Pitchbook, “The lack of liquidity continues to be the VC problem. 2024 recorded an estimated total of 1,259 exit events with an aggregate value of $149.2 billion.” While that’s better than 2023 (slow clap), the value is still way below pre-pandemic values; by comparison, in 2019 there were 1,285 exits valued at $339mm. The value of exits in 2019 was 128% higher than 2024! That’s ugly.
Taking it a step further, the average deal value is way down compared to 2019. The table below shows the average deal value in 2024 was $118mm while in 2019 it was $232mm, a 96% difference. To us, 2024 looks a lot more like 2017 and 2018. Deal counts, volumes, and average deal size are all roughly similar. 2017 and 2018 were very healthy periods for SaaS investing and exits, but obviously far from the froth from 2020 and 2021. Pitchbook’s data is yet another confirmation of the malaise in venture, and we don’t see the market going back to 2020/2021.
Everyone thinks 2025 will be a much stronger year for SaaS exits. We agree there will be more exits, but it will be because companies have run out of the equity and debt they raised in 2022 and will therefore be forced to the market. We don’t think investor support will be there for the next round. We believe valuations will be in line with that of the 2017 and 2018 period.
Thank you for your readership. See more blogs and SaaS data at blossomstreetventures.com. Email the author at sammy@blossomstreetventures.com.
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