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The Daily Pitch: VC

May 19, 2022

Like our newsletter? The data comes from the PitchBook Platform — our data software for VC, PE and M&A

In today's Daily Pitch, you'll find:

Andreessen Horowitz has raised $600 million for a new gaming fund as it doubles down on an investment thesis centered in the metaverse.

Top Tier Capital's founder and managing director shares his perspective on the market downturn and VC opportunities.

Our latest US VC Valuations Report explores how startup valuations are faring in the face of market headwinds.

Today's Top Stories

US VC valuations yet to see full impact of market volatility

Valuations of VC-backed companies endured a quick shift to a difficult market in the first three months of 2022. While the numbers do not yet depict the immediate impact of the ongoing volatility, PitchBook analysts say that investor sentiment has changed over the last quarter.

Our latest US VC Valuations Report explores how startup valuations across the venture lifecycle are reacting in the face of market headwinds—which include rising interest rates, high inflation and geopolitical tension due to the war in Ukraine. Key takeaways include:

Early-stage deal sizes and pre-money valuations hit record highs in Q1. At the outset, the numbers suggest that early-stage startups are a bit more insulated from turbulence in the public markets than those at later stages.

As tech stocks took the brunt of the market volatility over the past few months, the average late-stage pre-money valuation decreased from the highs of 2021, along with the top-decile figure.

The average public listing valuation fell to $993.1 million in Q1. While the figure is still elevated on a historical scale, it represents roughly one-third of 2021's $2.8 billion.

read the report

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LP Spotlight: Top Tier sees VC opportunities in market downturn

(Malorny/Getty Images)

David York, founder and managing director at Top Tier Capital, a VC-focused fund-of-funds specialist, has seen several investment downturns over the course of his nearly 40-year career.

Today, San Francisco-based Top Tier boasts a relationship with over 100 firms, including some of the most recognizable brands in VC, such as Andreessen Horowitz, Accel, Index Ventures and Craft. It also invests in direct and limited partner secondaries.

We spoke with York about how this downturn compares to those he experienced earlier in his career and what he thinks will be the best opportunities and most significant risks amid the venture market pullback.

Recommended Reads

The effects of automation have been fiercely debated for decades, but maybe we shouldn't be blaming robots for taking our jobs. [The New Yorker]

For years, Apple has worked in secret on an AR and VR headset. Technical and leadership challenges have caused the project to struggle to get off the ground. [The Information]

Inside one photographer's attempt to document Indigenous culture by photographing every federally recognized tribe in the US. [The New York Times]

Since yesterday, the PitchBook Platform added:

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VC valuations

1756

People

454

Companies

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Funds

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Quick Takes


	The Daily Benchmark
	2017 Vintage Global Funds-of-Funds
	VC Deals
	Sweden's Klarna faces valuation drop in new round
	Sequoia leads $100M Series C for Glean
	Laekna Therapeutics collects $61M
	N3TWORK Studios picks up $46M
	Animal-free milk developer drinks up $28M
	Seclore banks $27M
	UrbanFootprint announces $25M in new funding
	Heartex secures $25M Series A
	Fundraising
	Tusk Venture Partners locks in $140M for Fund III

The Daily Benchmark

2017 Vintage Global Funds-of-Funds

Median IRR

25.94%

Top Quartile IRR

35.68%

1.67x

Median TVPI

Select top performers

TrueBridge Capital Partners Fund V

Top Tier Venture Capital VIII

StepStone Tactical Growth Fund II

*IRR: net of fees

34 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

VC Deals

Sweden's Klarna faces valuation drop in new round

Buy now, pay later startup Klarna could see its valuation fall by as much as 30% as it seeks to raise new capital, the Wall Street Journal reported. The Stockholm-based company is understood to be seeking up to $1 billion from new and existing backers in a deal that could put its value in the low $30-billion-range. Klarna is currently Europe's most valuable VC-backed startup and was most recently valued at $45.6 billion following a SoftBank-led round in June. Earlier this year, it was reported that Klarna was aiming to secure new funds at a valuation of between $50 billion and $60 billion.

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Sequoia leads $100M Series C for Glean

Glean has raised $100 million at a $1 billion valuation in a round led by Sequoia. The startup's platform enables employees to search for information across all their companies' SaaS apps at once. Glean's customers include Databricks, Outreach and Grammarly.

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Laekna Therapeutics collects $61M

Laekna Therapeutics has raised a $61 million Series D led by CS Capital. The Shanghai- and New Jersey-based company is developing therapeutics intended to treat cancer and liver diseases.

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N3TWORK Studios picks up $46M

N3TWORK Studios has raised a $46 million Series A led by Griffin Gaming Partners. Based in the Bay Area, the company is a developer and publisher of blockchain games. Peter Levin, managing director at Griffin, will join the company's board.

View details

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Animal-free milk developer drinks up $28M

Imagindairy, an Israeli creator of animal-free milk proteins, has raised an additional $15 million in seed financing led by Target Global, bringing the round's total to $28 million.

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Seclore banks $27M

Seclore has raised a $27 million Series C co-led by Origami Capital Partners and Oquirrh Ventures. The company's browser-based data security platform is used by more than 2,000 companies and government organizations.

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UrbanFootprint announces $25M in new funding

Berkeley, Calif.-based UrbanFootprint has raised a $25 million Series B led by Citi and Social Capital. The startup provides an urban intelligence platform that unifies climate, environmental, urban, socioeconomic and customer data, helping governments, utilities, financial institutions and urban planners decide where to invest and deploy resources.

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Heartex secures $25M Series A

Heartex has raised $25 million in a round led by Redpoint Ventures. Based in the Bay Area, the company is the developer of an open-source data labeling platform. Unusual Ventures, Bow Capital and Swift Ventures also participated in the funding.

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PitchBook Webinar: Private equity in the European insurance sector

Join PitchBook on May 24 at 7 a.m. PT/3 p.m. BST for a webinar discussing key drivers and risk factors in the European PE insurance sector. PitchBook analysts will examine the overflow of activity in the space driven by broker deals and emerging technology solutions poised to disrupt the business model.

Key takeaways include:

Key factors driving PE deal activity in the European insurance broker space.

Top PE sponsors in European-headquartered insurance brokers.

How technology will impact the European insurance broker business model going forward.

Register now to secure your spot

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Fundraising

Tusk Venture Partners locks in $140M for Fund III

Tusk Venture Partners has closed its third flagship fund with $140 million in commitments. The vehicle will be used to continue backing early-stage tech companies that operate in highly regulated industries. The New York-based firm closed its second fund on $70 million in 2019.

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