The Impact of Crossover Investors – bridging private and public markets
The role of crossover investors in the private startup funding landscape has gone from negligible, to fear-inducing for VCs in recent years. In partnership with Deutsche Boerse we explore the impact of crossover investors (hybrid fund active in both, private and public markets) in startup ecosystems, and the bridging of the gap between private and public markets.
Crossover investors have risen to key players in the tech ecosystem
The participation of crossover investors in VC deals increased to an all-time high of $60+B globally and $6+B in Europe in 2021.
This represents 13% of the global and 8% of the European VC investments.
Bridging private and public markets by backing the companies’ growth track
The initial investment of crossover investors is over 60% of the times at Series C+.
With follow-up rates between 59% to 65%, crossover investors back companies pre- and post-IPO and show flexibility in holding periods.
Crossover investors can add global experience and network to IPO candidates
Almost 25% of the latest European tech listings were backed by crossover investors.
These companies went public 50% faster, 2.3x more often and at 148% higher valuation compared to companies without a crossover investor.
Recent market environment challenged the rebalancing of portfolio compositions
Global VC investments by crossover investors in 2022 pulled back by nearly 70% (Europe 32%).
However, crossover investments are expected to stay, with a less aggressive investment pace as in 2021.