While venture capital deals and valuations in Q3 of 2024 are currently valued ahead of 2023’s figures, the number of rounds seems to have dropped, a new report shows.

Analysis from PitchBook has shown that VC funding is making a recovery from last year, as inflation and high interest rates ease across Europe.

As central banks continue to cut interest rates over the past year and inflation falls, the climate has been primed for better dealmaking.

While the number of rounds may have dropped, the size of deals and valuations tied to these rounts have risen.

Pre-money valuations are rising compared to last year at the pre-seed, late and venture stages of growth in the UK and Ireland. They have, however, stagnated at the seed stage, and even down at the early stage.

At the pre-seed stage, pre money valuations averaged £3.2m in the UK and Ireland, up 31% from last year. The average at the venture growth stage was £16.8m, up about 5% from 2023.

UK and Ireland have hovered slightly lower than the rest of Europe in terms of valuation, with £4m in the third quarter of 2024, versus the European £4.5m.

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The UK average at the venture growth stage was £16.8m, significantly below Europe’s £20.8m average.

“The UK’s higher activity levels and wider dispersion of price points for deal sizes and valuations compared with other nations could be influencing medians,” the PitchBook report said.

“Nonetheless, the UK remains a robust benchmark and mirrors longer-term trends for European VC valuations.”

Funding in the UK dropped over the third quarter of 2024, a previous report showed, though the UK was still leading Europe.