2022 DACH private market trends in six charts

On Dec 9, 2022

In the first nine months of 2022, private market deal activity in the DACH region—which consists of Germany, Austria, Switzerland and Liechtenstein—retreated slightly from its previous highs as Europe’s financial markets entered correction territory.

Private equity is on track to match last year’s levels, but with the downturn persisting, activity in Q4 could see a slowdown. Meanwhile, venture capital dealmaking has already registered its second-best year on record, but at the pace set through Q3, it is likely to fall short of 2021’s totals.

Take a look at these six charts from our 2022 DACH Private Capital Breakdown to see how the PE and VC asset classes performed in the first three quarters of the year.

Overall VC deal activity has been resilient this year, with an estimated 1,503 deals worth a total €14 billion closing in the first nine months of 2022. However, Q3 saw the lowest quarterly total of capital raised since Q4 2020, exemplifying the increase in caution in the market.

Germany accounted for the majority of VC deal value—€10.1 billion—thanks to its well-established financial services sector and large economy.

Acquisitions made up the lion’s share of exits, with 97 deals completed worth a total €1.48 billion. Only three public listings took place, the largest of which was cryptocurrency investment platform Smart Valor’s IPO at a pre-money valuation of €710.3 million.

Overall exit activity reflected the broader European VC market, with a sharp decline both for exit count and value. Through Q3, only €2.37 billion was generated from exits, meaning the region could see its lowest annual exit total since 2018.

Venture fundraising in the DACH region held up well through Q3 considering market conditions. Some 33 vehicles closed worth a total €4.5 billion, compared with 46 funds totaling €5.1 billion last year.

While swelling fund sizes have helped keep fundraising steady, the region has yet to see a €500 million-plus vehicle close this year.

Add-ons proved to be the most popular type of PE deal in the first three quarters of 2022, accounting for nearly half of all transactions.

Given the current downturn, add-ons allow firms to grow their existing portfolio companies to better position them to weather challenging market conditions. Deal sizes tend to be smaller and thus more attractive than buyouts.

Volatility in the public markets trickled down into private equity this year, with a significant drop in exit activity. An estimated 175 deals worth a total €27.1 billion closed through the end of September, just over a third of the value generated last year.

The region saw no PE-backed public listings during this period, and acquisitions were the most common route to exit.

Only five PE funds closed in the first three quarters of the year, compared to 19 vehicles closed throughout all of 2021. Market conditions have caused many LPs to reevaluate their allocations to private markets due to the fall in public market valuations.

Four out of those five vehicles came from Switzerland, making 2022 the first year Germany did not account for the majority of new PE funds in the DACH region.