“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,” said Nalin Patel, EMEA private capital analyst at Pitchbook, on Tuesday 12 November 2024, at the Web Summit, which is being held in Lisbon, Portugal, from 11 to 14 November 2024. Photo: Pitchbook

“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,” said Nalin Patel, EMEA private capital analyst at Pitchbook, on Tuesday 12 November 2024, at the Web Summit, which is being held in Lisbon, Portugal, from 11 to 14 November 2024. Photo: Pitchbook

Pitchbook’s latest survey, conducted with Web Summit, reveals that 43% of investors view artificial intelligence and machine learning as the most disruptive technologies over the next decade, with growing optimism about the fundraising environment and continued investment in women-led startups.

Pitchbook, a financial data provider, in collaboration with the Web Summit, one of the world’s largest technology conferences, the findings of its latest survey on Tuesday 12 November 2024. The survey, completed by 100 venture capital investors attending this year’s Web Summit in Lisbon, provided an in-depth analysis of current trends and investor sentiment in the global venture capital landscape. According to the report, it highlighted a blend of cautious optimism and strategic adaptation, as investors continue to navigate a complex and evolving economic environment.

Movers and shakers

The survey’s findings highlighted the continued dominance of artificial intelligence (AI) and machine learning (ML) as the most disruptive technologies. 43% of the investors surveyed identified AI/ML as the leading force in shaping the next five to ten years of technological development, reflecting sustained enthusiasm for the sector’s potential. This was followed by interest in climate tech, which saw a notable increase, with 14% of respondents citing it as a top area of disruption, compared to just 9.9% in last year’s . Biotech also remained a key focus, with 8% of investors viewing it as a key driver of change.

Pitchbook noted that despite macroeconomic challenges such as rising interest rates and global political uncertainties, investor sentiment showed a notable degree of resilience. 39% of investors reported maintaining their investment pace, a slight increase from 33.3% the previous year, indicating growing confidence in the venture capital ecosystem's adaptability. However, 26% of investors acknowledged a minor slowdown in investments, reflecting a measured response to the economic pressures at play.

Market conditions

Investor optimism regarding fundraising also appeared to have improved. 43% of investors expected a slight improvement in the fundraising environment over the next 12 months, a shift from last year’s more cautious outlook. This represents a positive sign for the venture capital market, even as economic headwinds persist.

While rising interest rates have added pressure to the market, 39% of investors stated they would not alter their investment pace. Pitchbook’s lead EMEA private capital analyst, Nalin Patel, noted in a report that this reflects the venture capital community’s ability to remain focused on long-term growth despite short-term economic disruptions. “Investors remain committed to transformative sectors like AI and are navigating these challenges with resilience,” Patel said.

Emerging opportunities

The European venture capital market showed particular resilience in 2024, driven by a steady recovery in exits and continued capital flow into high-growth sectors such as AI, software as a service (Saas), and life sciences. One notable milestone was the rise of femtech, with Europe’s first femtech unicorn being a key highlight, signaling progress in gender-focused innovation.

In contrast, overall VC deal value in Europe remained lower than the previous year, as shifting regulatory and market conditions presented challenges in some sectors. However, venture debt in Europe surpassed 2023 totals, providing essential financing to support growth-stage companies. This development highlights a growing focus on alternative financing mechanisms, which may play a crucial role in supporting businesses through economic turbulence.

Investment trends

The survey also revealed key insights into investor preferences when it comes to evaluating opportunities. Investors prioritised executive team experience and business model strength, with 26% of respondents emphasising each of these factors, followed by growth potential at 24%. Meanwhile, 47% of investors highlighted limited market size and 46% flagged an inexperienced founding team as significant red flags.

As for the growing importance of sustainability, 42% of investors identified regulatory compliance as a top investment criterion, and 41% sought out companies focused on positive environmental innovation. This shift reflects broader market dynamics, with increasing emphasis on proactive sustainability efforts and the integration of environmental factors into investment decisions.

Diversity also remained a focus for many investors, particularly in regard to gender diversity. A slight increase in female representation within senior management positions was observed, with 72% of firms reporting at least one woman in a senior role, up from 66.7% the previous year. Furthermore, 70% of investors surveyed confirmed they had made at least one investment in women-led startups in the past 18 months, with nearly 50% of these investors directing 25% of their investments toward such companies.

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