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Median exit multiples for European private equity- and venture capital-backed tech companies are set to rise in the second half of 2026 after a flat first half, according to ScaleX Invest.
The London- and Paris-based private markets data group based its forecast on an index covering about 9,700 transactions involving more than 8,000 European tech companies between 2020 and 2025.
Its analysis points to a sharp disconnect in venture capital pricing at the end of 2025. Venture-backed companies raised money at about 9.3 times revenue in the second half of the year, while mergers and acquisitions valued them at about 2.7 times revenue, leaving a gap of roughly 70%.
That marks a sharp shift from the first half of 2024, when the gap between venture entry and exit pricing was close to zero. The divergence widened over the following 18 months as financing valuations remained relatively firm while exit prices fell.
Pricing gap
Private equity adjusted more quickly to the market correction than venture capital, ScaleX said. By late 2025, the gap between median entry and exit multiples in private equity-backed deals had narrowed to about zero as investors accepted lower entry prices and exit multiples improved modestly.
In private equity, entry pricing fell from 14.3 times EBITDA to 11.3 times EBITDA over two years, while exit pricing rose from 8.4 times EBITDA to 11.6 times EBITDA. In venture capital, by contrast, entry prices edged up from 7.8 times revenue to 8.1 times revenue, while exit multiples dropped from 7.7 times revenue to 2.5 times revenue.
The group also highlighted a rise in distressed outcomes. Sales priced below 1.5 times revenue for companies with negative EBITDA accounted for 5.6% of venture-backed exits between 2022 and 2025, compared with 1.8% of financing rounds over the same period.
The trend became more pronounced in 2025. About 11% of European venture exits that year were classified as zombie sales, up from roughly 3% in 2022 and 2023.
Profitability pressure
The research suggests investors and buyers are applying a steeper discount to companies moving into modest profitability than to those still reporting losses. Deeply loss-making businesses still commanded revenue multiples of 15.6 times in 2025, while companies with EBITDA margins between 0% and 20% fell to about 2.4 times.
Only companies with EBITDA margins above 20% saw some recovery, with multiples reaching about 4.6 times. The pattern suggests that simply reaching break-even has not protected companies from lower valuations.
Sébastien Paillet, Chief Executive Officer of ScaleX, said the market remained divided on how to value private technology assets.
"Venture GPs are battling mixed emotions: relief that the era of continuous repricing is over, and uncertainty over how wide the entry/exit multiple gap could become. While the gap doesn't constitute a market-wide portfolio write-down, it tells us that investors and buyers continue to operate under very different assumptions.
"For founders and CEOs, it is no longer enough to prove your company can grow. You and your investors need to show it can deliver enough growth, profitability and strategic value to support the valuation already placed on it - and hope a future buyer will use the same valuation logic. This is why our Index exists: to bridge the communication gap between different parties and their expectations. Founders, sellers and buyers may still disagree on individual companies, but they no longer need to negotiate against market-wide pricing that varies wildly."
He said recent funding rounds should no longer be treated as a clear marker of enterprise value.
"For tech companies, their last funding rounds now represent an operating commitment, not a true valuation. Even a company that has grown 50% between 2022 and 2025 could still have destroyed equity value if its multiple slid into a profitable danger zone. Break-even is no longer the safe harbour - it is the valley.
"During the second half of 2025, venture-backed companies sold to strategic acquirers at effectively the same multiple as public markets. This erases the historic reward for illiquid private investments over listed comparables. It makes uncomfortable reading for GPs, and for LPs it begs the question: where does the premium now lie?"
Signs of reopening
ScaleX said its index tracks three measures that have historically moved in sequence: listed private tech stocks, private financing and private exits. Its latest reading showed listed European tech shares had risen for three consecutive half-years, entry pricing had steadied and exits had remained flat.
Paillet said that sequence suggests the lag in exit pricing may now begin to close.
"Our Index tracks three gauges that historically move in a strict order: private tech stocks, then private financing, then private exits. The latest reading shows European listed tech stocks rose in each of the past three half-years; entry pricing has firmed; but private exits remain flat. The tape is trained to read this situation the way a trader reads the market: the laggard will catch up."
The expected recovery is not uniform across sectors or countries. Liquidity should return first to disruptive artificial intelligence, profitable software and larger buyout targets, while activity in the middle of the market is likely to remain subdued.
By geography, France appears best placed for an earlier recovery because the gap between private and public market pricing is narrower there than elsewhere in Europe. The UK is expected to follow, while Germany may take longer to recover because its pricing gap is wider.
The underlying database spans venture capital, growth equity, private equity, acquisitions and selected listed-market comparisons, making it one of the broader data sets focused on European private tech transactions. The latest reading covers half-year market data through the end of 2025.