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CE venture capital market ʼcarefully optimisticʼ, says Deloitte

According to Deloitteʼs latest survey about Central European venture capital confidence, while the market is still going strong, the pace of investment activity is expected to stagnate rather than grow this year.

Balázs Csűrös

The survey says that 75% of responding Central European venture capital investors believe that market activity will stay at its current level, representing an increase compared to the summer optimism. About 11% expect the activity to increase, down from 31% this summer, meaning that market optimism is on a downward trend at the moment.

Deloitte says that the expected investments will be financed by the fundraising over the course of the last 18 months, as the fundraising process of two large venture capital funds were concluded last year, while several mid-sized ones started raising funds this year.

Conditions for leveraging remain attractive, with some 93% of respondents saying that the level of liquidity will either remain unchanged (82%) in the next half year or will continue to improve (11%). Less than one tenth (7%) expect that the level of funding will dwindle in the coming months, down from 17% in the previous survey.

"In the past two years, withdrawals in the Central European venture capital market and some significant investments have helped to attract investors, including some well-known private capital investors into the region," says Balázs Csűrös, a partner at Big Four consultancy Deloitteʼs advisory branch.

"These fundraising activities are expected to strengthen investment activity. The number of investment opportunities are increasing as businesses in the region are already more mature and they are looking for external sponsors to provide financing and expertise."

According to 73% of those surveyed, Central European economic conditions will retain their current strong level, and 2% believe it will get even better. GDP growth of the regionʼs markets remain the highest in Europe, with forecasts indicating growth (3.4%) twice as fast as the Eurozone average (1.7%).