This article is a part of Poland Unpacked. Weekly intelligence for decision-makers
A majority (57%) of venture capital (VC) and private equity (PE) fund managers consider company valuations to be inflated. “It is expensive now, and it will stay expensive,” summarize the authors of the first VC/PE Sentiment Barometer, presented by PFR Ventures and the Polish Private Equity & Venture Capital Association (PSIK). The analysis suggests that the sector does not expect a correction, with 48% of respondents anticipating a stable market environment.
Nonetheless, funds assess capital availability as “limited or very limited” and express concern over potential difficulties in executing exits.
“Data on the sentiment of fund managers from Poland align with European Investment Fund statistics across Europe,” notes Rozalia Urbanek, board member at PFR Ventures.
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Hopes and concerns of domestic investors
The VC/PE Sentiment Barometer is a new analysis of the Polish market, produced by PFR Ventures and the Polish Private Equity & Venture Capital Association (PSIK). The organizations plan to repeat it periodically, presenting fund managers’ sentiment once a year.
The analysis reflects the views of 56 fund managers, with 75% of responses coming from representatives of the VC sector.
Interactive chart Selectivity and higher standards
According to Adam Matusiak, partner at Audire Assurance, quoted in the report, valuations are far from extreme – neither panicked nor euphoric. They are characterized by “selectivity.” Capital remains available in the market, but “requirements regarding business quality have increased.”
In short, today what matters are specifics and the verifiability of assumptions, not merely the narrative of a company’s potential for success.
“Compared with the rest of Europe, the Polish market still stands out for relatively lower valuations, which may enhance its attractiveness for new investments,” says Adam Matusiak.
Interactive chart Expert's perspective
A future more optimistic than the present
The greatest activity is observed in the small- and mid-cap segments, as well as in sectors such as technology, business services, and healthcare.
Difficulty in raising capital for investments
A major challenge for Poland’s VC/PE market is limited capital availability. Funds struggle to persuade private investors to entrust them with money, especially when financing risky, technology-focused companies.
Fund managers assess current opportunities to raise capital from so-called Limited Partners as limited or very limited (57.2% of respondents). Another 26.8% consider the situation moderate, while 14.3% rate it as good. No respondents indicated “very good,” and only 3.6% believe the situation will improve significantly.
Interactive chart Challenges facing VC/PE funds
The primary factor constraining effectiveness in the domestic VC/PE market is executing exits. Poland still has few examples of spectacular investment exits, and those that do occur do not always generate substantial returns. From the perspective of Limited Partners, exits remain the most tangible measure of a fund’s performance.
According to 35.7% of respondents, the prospects for completing exits over the next 12 months are expected to improve only slightly.
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The need for capital and regulatory stability
Equally important is strengthening the ecosystem for growth financing and increasing market liquidity, including through smoother exit opportunities and the emergence of larger funds capable of financing successive stages of company scaling. These conditions are essential for Polish companies to grow and compete in international markets.
Key Takeaways
- Exits remain the key challenge for VC/PE funds, as they constitute the most tangible measure of performance for investors. The Polish market still lacks spectacular exits, and those that do occur do not always deliver high returns. While some fund managers foresee modest improvements over the next 12 months, this issue continues to significantly constrain market growth.
- Poland’s VC/PE market operates under persistently high valuations, yet fund managers do not expect a correction. This points to stabilization at a relatively elevated price level, without extreme market emotions such as panic or euphoria. At the same time, investor selectivity is increasing, with growing emphasis on business quality and the verifiability of assumptions.
- Access to capital remains a significant constraint on market development, with most funds rating it as limited or very limited. Raising funds from private investors proves particularly challenging, especially for riskier technology projects. Only a small fraction of respondents to the VC/PE Sentiment Barometer, presented by PFR Ventures and the Polish Private Equity & Venture Capital Association (PSIK), anticipate a substantial improvement in this situation in the near term.