PitchBook News - Encryption unlocks startup growth

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The Daily Pitch: VC

June 14, 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 Emerging Tech Research forecasts the commercialization and mainstream adoption of emerging encryption protocols.

VC deals that used to be founder-friendly at high prices have been replaced by hallmarks of a downbeat environment, such as decreasing valuations and investor-protective terms.

Today's Top Stories

Encryption innovation driving startup growth

Encryption innovation has historically created large companies, and recent development in modern cloud computing, quantum and AI is likely to yield the same, spawning a new wave of vendors dedicated to securing the internet.

Our latest Emerging Tech Research forecasts the commercialization and mainstream adoption of emerging encryption protocols, highlighting FIDO2 authentication, quantum-safe cryptography and privacy-enhanced computing.

While incumbents are developing products in these spaces, our information security analyst believes startups will ultimately be formed to commercialize the most advanced breakthroughs from academia and as spinoffs from large companies. Key takeaways include:

Venture activity in companies commercializing the FIDO2 standard suggests fundamental innovation in public key encryption can produce large companies.

FIDO2 tokens and quantum-safe cryptography will likely gain mainstream adoption by 2025, while privacy-enhanced computing may require more time.

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Market turmoil revives VC deal terms that favor investors

(XH4D/Getty Images)

Hallmarks of a downbeat climate, such as decreased valuations and investor-protective terms, are beginning to emerge. Startups in urgent need of capital this year are now saying they are "flexible on price."

"The down-round conversations reflect the end of the 'denial' phase and the beginning of the 'acceptance' phase," according to one investor.

Meanwhile, a very select minority of exceptionally strong companies could attract new capital at slightly higher prices.

Recommended Reads

Payments giant Stripe is looking to a new frontier for expansion in big enterprise customers. But its push for big businesses isn't without growing pains. [The Information]

A look at how the supply chain crisis is remaking the car industry. [The Economist]

How one VC firm is using machine learning to attract both portfolio companies and investors. [Institutional Investor]

Since yesterday, the PitchBook Platform added:

31

VC valuations

1594

People

516

Companies

13

Funds

See what our data software can do

Quick Takes

	The Daily Benchmark
	2016 Vintage Global PE Funds
	A message from Apex Group
	Fund managers benefit from $3.8m savings with Apex Group
	VC Deals
	Pixellot collects $161M in Series D funding
	Echodyne picks up $135M
	Capital Rx nabs $106M to tackle drug price distortion
	Magic Spoon scoops up $85M
	Cirkul valued at $1B with latest round
	Submittable secures $47M
	Alice locks down $30M
	Tiger Global leads $20M Series A for Bttn
	Fundraising
	Kairos Ventures closes Fund III on $58M

The Daily Benchmark

2016 Vintage Global PE Funds

Median IRR

22.29%

Top Quartile IRR

28.49%

1.64x

Median TVPI

Select top performers

Francisco Agility Fund

Renovus Capital Partners II

Bertram Growth Capital III

*IRR: net of fees

143 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

A message from Apex Group

Fund managers benefit from $3.8m savings with Apex Group

Forrester Consulting has recently released its independent study, having interviewed key decision-makers across a number of large Apex Group clients, and the findings in its Total Economic Impact™ study of Apex Group are compelling:

Around $5.4m in cost benefits
$2.75m Net Present Value over three years
105% return on investment ROI

To find out more about the benefits and savings that Apex Group's single-source solution can provide, download Forrester's Total Economic Impact™ report on Apex Group here.

Apex Group's transformation over the past few years has been driven by the Group's founding vision—to deliver service in a better way, in a way that no one else can.

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VC Deals

Pixellot collects $161M in Series D funding

Pixellot has raised $161 million in a round led by PSG. The Israeli company is a provider of AI-based sports video production and analytics tech that enables capturing, producing, broadcasting and more.

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View 6 competitors »

Echodyne picks up $135M

Echodyne has raised $135 million in a round co-led by Baillie Gifford and Bill Gates. Based in the Seattle area, the company designs radar technology for use in areas including defense operations, infrastructure protection, unmanned aerial vehicles and autonomous vehicles.

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View 5 competitors »

Capital Rx nabs $106M to tackle drug price distortion

Capital Rx has raised a $106 million Series C led by B Capital. Based in New York, the company is the developer of a cloud-based platform that offers consistent prescription drug pricing and pharmacy tools for patients and healthcare professionals.

View round

View 6 competitors »

Magic Spoon scoops up $85M

Magic Spoon has raised an $85 million Series B led by HighPost Capital. Founded in 2019, the New York-based company is a manufacturer of high-protein, low-carb cereal. Investors including Shakira, Russell Westbrook and Halsey also participated in the funding.

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View 1 competitors »

Cirkul valued at $1B with latest round

Cirkul has raised a $70 million Series C led by SC Holdings that gives the Tampa, Fla.-based beverage startup a pre-money valuation of $1 billion. Launched in 2018, Cirkul offers reusable water bottles and flavor cartridges.

View round

View 2 competitors »

Submittable secures $47M

Submittable has raised a $47 million Series C led by Accel-KKR. Based in Montana, the company offers a social impact platform designed to help companies, governments and philanthropic organizations manage programs.

View round

View 9 competitors »

Alice locks down $30M

Alice Technologies has raised a $30 million Series B led by Vanedge Capital. The company's construction optioneering platform helps contractors plan, bid and build complex infrastructure and commercial projects.

View round

View 30 competitors »

Tiger Global leads $20M Series A for Bttn

Bttn has raised $20 million in a round led by Tiger Global. Based in Seattle, the company helps medical practitioners, businesses and emergency responders buy medical supplies from manufacturers.

View round

View 5 competitors »

Fundraising

Kairos Ventures closes Fund III on $58M

Kairos Ventures has collected $58 million for its third flagship vehicle, which has already made 27 investments in companies such as bioengineering specialist Vivodyne and aircraft designer and manufacturer PteroDynamics. Based in Los Angeles, the early-stage firm typically targets startups in the physical and life sciences industries.

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View 54 investments »

Chart of the Day

Source: PitchBook's Q1 2022 US PE Breakdown

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PitchBook News - Encryption unlocks startup growth

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