European VC dealmaking significantly dropped in the first half of 2023, with deal value down 60.8% compared with H1 2022 and 34.2% lower than H2 2022. We attribute this slow and steady decline to a shift in the macroeconomic environment as higher interest rates, high inflation, a closed IPO exit window, and tough fundraising conditions have all been significant decelerators to growth and dealmaking in the VC market. The real question then becomes, have we hit the bottom and when do we recover? Public markets have started recovering in 2023, especially in the US where the Federal Reserve has signaled it is coming closer to an end in monetary tightening. The European monetary tightening cycle may continue for longer given that inflation has been persistently high in the UK and in the eurozone. Private markets often lag public markets by a few quarters, and any sign of recovery in the public markets will help indicate when the private market recovery can be expected.