January 18, 2023

2023 Venture Capital Predictions By Ventech (EU Part)

2023 Venture Capital Predictions By Ventech (EU Part)

(by Claire Houry, Tero Mennander, Stephan Wirries, Audrey Soussan, Jean Bourcereau)

While the global economic slowdown will continue, we are optimistic about the long-term venture capital market and the unwavering ability of European tech startups to innovate and reclaim their space, especially digital and climate-related ones. In 2023, companies will have to be more accountable for their impact on the environment.

If you ask any venture capital player, it’s never been harder to make predictions for a new year. So we asked our Partners to humbly share their views on 2023 in this double-paced world.


The State of Startups and VC in Europe

First taste with some key data:

Europe is and will be facing macroeconomic uncertainties throughout the year. There is no denying it. But the continent has proven its potential as an emerging VC hub after Silicon Valley. Since 2013, the European asset class has grown from €60bn assets under management to over €300bn in 2022.

A wind of prioritizing local industries and delivering Tech “made in Europe” is blowing. But for the top-notch European startups or scale-ups, it’s now real-time to step out of the crowd and win big: while others are struggling with cash, those who perform well should seize the opportunities to develop consider internationally and fight for talents.

The trends we’ll see among startups:

What we expect from the VC market: patience and resilience


Most of the capital-intensive business models will see a big wave of consolidation. And most businesses that begin with “quick” or “fast” (like fast fashion, and quick commerce) will suffer strongly.

In general, crowded sectors will see far fewer newcomers:

What else?

Are boring sectors coming back? (again)

Let’s take a closer look at the German market

Interest in issues pertaining to energy, defense, environment, digitization, and supply chains are top of the line in Germany.


It’s not back to black, but back to the basics

“Opportunities come in different shades in more difficult market conditions. Startups that do well have an enormous opportunity to win over talents that were until recently unattainable due to the competition from ‘big tech’. We may witness more startup falling stories in 2023. My hope is that many startuppers transform into founders of a generation of new startups which are created in harder times, and will endure better through times with lessons learned.”

– Stephan Wirries, Partner at Ventech (Germany)

Capital efficiency + Smart growth

“Cash is king! The flavor of 2023 is to manage the startups wisely in terms of expenditure. For most startups, prioritize a small team of very talented people rather than recruiting large organizations. Investors will demand tech companies to focus more on generating positive cash flow.” said Tero Mennander, Partner at Ventech (Finland).

Startups will have to manage their priorities and refocus on their core business, which will require (sometimes) cutting non-core unprofitable initiatives, even if they could be interesting in the long term. During the crisis, big enterprises will reduce their number of vendors, entrepreneurs will need to reach the critical mass required to remain on their vendors’ list. The pace of investment in marketing will be totally synchronized with the interest rate, so it’s still going to be slow in 2023.

Stability and growth: Keep your talents and supporters close

What about new job positions?

“We’ll see a wave of ‘Chief of Staff’, ‘Chief of Happiness’, ‘Chief Digital Officer’, ‘Chief Knowledge Officer’ fading soon. These jobs were created to adapt to the bullish market and to the war of talent (jobs dedicated to retaining employees such as chief of happiness offices, chief of knowledge officer).” predicts Audrey Soussan, Partner at Ventech. “These jobs might be the first one to be cut in a time of recession and rationalization as they will be less relevant in a bearish market when profitability becomes more important than growth at all costs.”

In addition to looking closely at market potential and technology, the VCs that will succeed in 2023 will be those that understand how to identify strong corporate cultures and know that core interests are based on shared values, not just happy-washed terms.