The venture capital market has been through a dramatic cycle in recent years. After the record-breaking highs of 2021, global VC investment and IPO activity slowed sharply in 2022 and 2023. Rising interest rates, inflation, and geopolitical uncertainty created a tougher environment for both entrepreneurs and investors. In Europe alone, venture deal value nearly halved in 2023 compared to the previous year, while IPO exits fell by 90%.
This shift has underscored a simple truth: the days of “easy money” and growth-at-all- costs are behind us. Today, investors demand stronger fundamentals, clearer paths to profitability, and credible exit strategies. For companies seeking to raise capital, the bar has been raised significantly.
The Link Between IPOs and VC
The decline of the IPO market has had a direct knock-on effect on venture capital. IPOs are a vital exit route for institutional investors, and when public markets close their doors, VC firms hesitate to deploy large sums into later-stage rounds. Companies are staying private longer, valuations have adjusted downward, and the pace of fundraising has slowed.
While this has created headwinds, there are also encouraging signs. IPO activity in early 2024 and into 2025 is showing signs of recovery, with successful listings in the US and Europe restoring some confidence. At the same time, innovation in fields such as artificial intelligence, climate tech, and healthtech continues to attract strong investor interest. The fundamentals for long-term growth remain intact.
Why Kylla’s Role is More Valuable Than Ever
In today’s more selective and demanding venture environment, experience and strategic guidance make all the difference. With exits harder to achieve and investors increasingly cautious, completing a transaction requires more than introductions. It demands structured processes, rigorous preparation, and a trusted partner to navigate the complexities of capital raising. Kylla brings that combination of discipline and expertise, ensuring that deals are not only initiated but carried through to successful completion.
Our global reach, paired with deep European expertise, positions us uniquely to bridge the gap between local entrepreneurs and international investors. As IPO activity has concentrated in the US and Asia, European companies need an advisor who understands both their regional context and the dynamics of global capital markets. Kylla has built that cross-border experience over years of executing complex transactions.
Equally important, we focus on building investor relations founded on trust and transparency. Through our structured CRM process, clients benefit from clear communication, real-time updates, and alignment with investors at every stage of the fundraising journey. At the same time, we help companies position themselves strategically for the future, whether the right exit is an IPO, a strategic acquisition, or a tailored hybrid solution. By aligning strategy, valuation, and capital structure with market realities, we ensure that our clients are well prepared for the opportunities that lie ahead.
Looking Ahead
The current venture capital cycle is not without its challenges, but history shows that downturns often create the best opportunities. Lower valuations, combined with a renewed emphasis on fundamentals, can set the stage for resilient growth and strong future returns. For companies ready to seize this moment, the right partner makes all the difference.
At Kylla, we believe that now is the time when experience counts most. By combining deep market knowledge with a hands-on approach to structuring and executing transactions, we help our clients turn a challenging environment into an opportunity for lasting success.
