Venture Capital Investment Down in the First Quarter

In the first quarter of this year, members of the Hungarian Venture Capital and Private Equity Association (HVCA) invested a total of HUF 3.5 billion in 25 Hungarian companies in 25 transactions, compared to HUF 8.1 billion invested in 31 companies in the same period last year, the association told MTI on Monday.

According to the latest report, prepared jointly with consultancy Ernst&Young, the amount invested was 56.2% lower than the capital invested in the same period last year and 62.7% less than the capital invested in the first quarter of 2021.

Of the 25 transactions, 12 were first round investments, accounting for 53.8% of the total amount invested.

A total of 20 transactions were made in seed, start-up, incubation and late-stage companies, with investments in these businesses accounting for 80% of the total number of first-quarter transactions and 84% of the value.

The average investment amount was HUF 10 million for incubation deals, HUF 156 million for seed deals and HUF 29 million for start-up deals. For late-stage companies, the same indicator reached HUF 505 million.

The highest single transaction was a HUF 1 billion investment in a late-stage company, while the second highest was a HUF 780 million investment in a seed-stage company.

Equity investments were made in ten different sectors in the first quarter of this year. 75% of the value of the investments went to the consumer and retail, business and industrial services and consumer services markets. These three sectors accounted for 52% of the total number of transactions. The highest value of individual investments also took place in the consumer & retail trade and business & industrial services sectors.

The association recorded 29 exits across ten funds in the first three months of the year.

During the quarter, HUF 3.2 billion was raised in Hungarian funds, according to the statement.