PitchBook News - Assessing the climate for VC valuations

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The Daily Pitch: VC

June 2, 2022

The Daily Pitch is powered by PitchBook’s industry-defining research and best-in-class data

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

Our latest analyst note explores the climate for VC valuations and liquidity in the face of shifting market conditions.

The frequency of new unicorns dropped after the 2020 boom. See the trends with our tracker, which has all the unicorns formed since 2016 in a filterable list by geography and time period.

Our monthly Global Markets Snapshot breaks down recent trends in the equity, debt and commodities markets.

Today's Top Stories

PitchBook adds leveraged loan, data insights as LCD deal closes

PitchBook founder and CEO John Gabbert (John Vicory)

PitchBook parent Morningstar has completed its acquisition of private-debt data provider Leveraged Commentary & Data from S&P Global, forging an integrated research platform that will serve as a one-stop shop for news and research on private finance.

LCD is a leading provider of news, analytics and index products that track the leveraged finance market, with a focus on deal structure, pricing, yield and volume, as well as secondary market performance and private equity-led leveraged buyouts.

With the acquisition now completed, LCD will be a part of PitchBook, which specializes in research insights and proprietary data on the private markets, including private equity, venture capital and M&A.

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Assessing the climate for VC valuations and liquidity

Between 2017 and 2021, annual capital investment in VC swelled from $88.4 billion to $342.2 billion. The wave of investor demand, coupled with a relatively steady supply of companies seeking funding, spurred consistent growth in VC valuations.

Now, the shift away from a low-inflation, low-rate environment could cool demand for VC assets and pare valuations. Our latest analyst note explores the climate for valuations and liquidity in the face of shifting market conditions, along with what may lie ahead—particularly for the potential bellwether of late-stage VC.

read it now

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A message from Golub Capital

Golub Capital knows sponsor finance

Golub Capital's transactions span industries, execution styles and sizes—from deals below $20 million up to $2 billion+ unitranche facilities.

Golub Capital nurtures long-term, win-win partnerships of every size that inspire repeat business.

Learn more about the flexible financing solutions offered to private equity sponsors by this market-leading direct lender and credit asset manager.

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Energy sector shines in May as markets remain volatile

The S&P 500 entered a bear market before rebounding to a positive return in May, after public markets saw a sharp sell-off in April. The energy sector continued its recent run of outperformance, returning 15.8% in May, followed by utilities at a 4.3% return. Unicorn creation declined again with less than 30 minted in the month.

Our latest Global Markets Snapshot breaks down a month of trends in the equity, debt and commodities markets, tracking returns across a range of indexes and sectors. It also includes private markets activity, including major deals, IPO performance and unicorn creation by region. In this monthly digest, we provide the datasets that PitchBook's research team is keeping an eye on as markets remain volatile.

read it now

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PitchBook's global unicorns tracker

The unicorn birth rate is declining.

The speed at which new billion-dollar companies are being formed has dropped this year after a boom that began in late 2020. There were 30 new unicorns formed in May, down from a peak of 63 in September.

Our new unicorn tracker has all the billion-dollar companies formed since 2016. You can explore trends in unicorn formation by filtering for geography.

see the data

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PitchBook's VC dealmaking indicator shows power shift toward investors

The dealmaking tide is turning. After five years in which the fundraising environment grew steadily more favorable for founders, economic uncertainty, falling valuations and other market factors are now swinging the negotiating power pendulum toward investors.

In Q2, valuation step-ups have started to come down and capital demand has outpaced supply compared to the previous quarter, largely driven by a rise in the number of companies expected to require additional funding in the coming year.

Check out PitchBook's newly updated VC Dealmaking Indicator to see the latest trends in deal terms, fundraising and other deal attributes.

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Recommended Reads

Everything is getting more expensive, except for starting a hedge fund. [Institutional Investor]

Apps and sensor-laden gadgets are helping farmers shift from the fields to indoor food-growing operations. But these innovations still don't make it easy. [Wired]

Why some crypto executives are pushing for regulation in the industry. [Bloomberg]

Since yesterday, the PitchBook Platform added:

14

VC valuations

1834

People

596

Companies

46

Funds

See what our data software can do

Quick Takes

	The Daily Benchmark
	2009 Vintage Global Real Assets Funds
	A message from Clari
	Lessons from a CEO: 4 ways to protect revenue during a downturn
	VC Deals
	Coralogix secures $142M for data observability
	MoEngage raises $77M Series E
	InfStones lands $66M
	Edtech startup Cuemath brings in $57M
	Bark bags $30M Series C
	Moxe Health picks up $30M
	Penny AI nabs $27M
	Fundraising
	Binance Labs locks down $500M for Web3

The Daily Benchmark

2009 Vintage Global Real Assets Funds

Median IRR

8.0%

Top Quartile IRR Hurdle Rate

12.0%

1.29x

Median TVPI

Select top performers

Minería Activa I

EnCap Flatrock Midstream Fund I

White Deer Energy

*IRR: net of fees

16 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

A message from Clari

Lessons from a CEO: 4 ways to protect revenue during a downturn

Take action now to protect your revenue and get ahead of the market:

Create an impact thesis about how macroeconomic conditions impact the most important dimensions of your revenue.
Look for signals for downward pressure on your renewals and churn.
Calibrate the 3 C's: Coverage, Capacity, and Conversion.
Pressure test your big deals. Move now on the sequence of events for your make-or-break deals to assess risk and upside against the plan.

Read 4 CEO Lessons on How to Protect Revenue During a Downturn to get the detailed playbook.

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VC Deals

Coralogix secures $142M for data observability

Coralogix has raised a $142 million Series D co-led by Advent International and Brighton Park Capital. The company's observability platform is used to monitor, visualize and analyze data in real time.

View round

View 78 competitors »

MoEngage raises $77M Series E

MoEngage has raised $77 million in a round co-led by Goldman Sachs Asset Management and B Capital. Based in the Bay Area, the company is the developer of a customer engagement platform designed to help marketers and product owners access customer insights.

View round

View 80 competitors »

InfStones lands $66M

Blockchain infrastructure provider InfStones has raised $66 million in a round led by led by SoftBank's Vision Fund 2 and GGV Capital. The company raised a $33 million Series B in February.

View round

View 28 competitors »

Edtech startup Cuemath brings in $57M

Cuemath has raised $57 million at a $407 million valuation in a round led by Alpha Wave. Based in Bengaluru, the company is the provider of a math tutoring platform for K-12 students in more than 70 countries.

View round

View 26 competitors »

Bark bags $30M Series C

Bark Technologies has raised $30 million in a round led by Kayne Partners. Based in Atlanta, the company offers a parental control platform intended to help parents manage and monitor their children's online activity.

View round

View 10 competitors »

Moxe Health picks up $30M

Moxe Health has raised a $30 million Series B co-led by Piper Sandler Merchant Banking and Vensana Capital. The company offers a clinical data exchange platform for healthcare providers.

View round

View 15 competitors »

Penny AI nabs $27M

Penny AI has raised a $27 million Series B led by PSG. The Canadian company offers a social commerce enablement platform for the direct sales industry.

View round

View similar company »

Don't miss our upcoming webinar

The investing environment has fundamentally shifted in the past several months, with inflation at a 40-year high, the Fed tightening monetary policy and growing fears of an economic recession.

In this webinar, our analysts will discuss the broader macroeconomic backdrop, how it has influenced the recent volatility and sell-off in public equity markets, and what it means for private markets now and going forward. The webinar will be held June 7 at 8 a.m. PT/11 a.m. ET.

Register now

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Fundraising

Binance Labs locks down $500M for Web3

Binance Labs, the venture capital arm of cryptocurrency exchange Binance, has closed its latest fund on $500 million. The vehicle will target startups building Web3 and blockchain technologies.

View details

View 123 investments »

Chart of the Day

Source: PitchBook's Q1 2022 Global Private Fund Strategies Report

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PitchBook News - Assessing the climate for VC valuations

Older messages

Nontraditional VCs react to market headwinds

How PE will navigate the macro labyrinth

Emerging tech braces for impact

How far will tech investors fall?

What next for PE and tech?

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