PitchBook News - Bright spots in a rocky PE landscape

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The Daily Pitch: VC

July 12, 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:

US PE deal activity totaled $529 billion through Q2, but a slowdown is on the horizon, according to the latest edition of our US PE Breakdown.

David Magerman, formerly of Renaissance Technologies, discusses whether quantitative methods can work in VC.

Once a darling of the VC industry, buy now, pay later companies are struggling amid the market downturn.

Today's Top Stories

Take-privates and tech remain bright spots in a rocky PE landscape

US PE got off to a shaky start in the first quarter of 2022, but on the heels of a record-shattering year, investors remained cautiously optimistic. Three months on, the outlook is starkly different, and the future deeply uncertain.

Until the macroeconomic environment stabilizes, deal activity as a whole will likely remain weak, yet there are areas of opportunity for private equity investors, according to our Q2 2022 US PE Breakdown, sponsored by Stout, West Monroe, Twin Brook Capital Partners and Ontra. Highlights include:

Deal value in the first half of 2022 totaled $529 billion, a healthy figure by historical standards, but activity is expected to slow in the next six months.

Take-private deals could be struck more easily, as PE firms look to deploy large amounts of dry powder and falling public market valuations make assets less expensive.

PE appetite for technology investments remained strong, topping $24 billion in aggregate and accounting for more than 27% of deal activity in Q2.

Strategic acquisitions dominated exit activity in Q2, as sponsor-to-sponsor exits slowed and IPOs all but vanished.

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Q&A: Former Renaissance quant David Magerman on how VC can use data

(Courtesy of Differential Ventures)

Five years after leaving his longtime post at quantitative hedge fund Renaissance Technologies, David Magerman now counts himself a member of the venture capital set.

As the head of Differential Ventures, Magerman has given some thought to whether the techniques of leading hedge funds can be used in venture capital. His take: There are a number of opportunities but even more pitfalls.

We recently caught up with Magerman to hear about how VCs can employ data—and when they shouldn't.

Recommended Reads

Leaked files show how Uber, under co-founder Travis Kalanick, tried to force itself into cities around the world, even if that meant breaching laws and taxi regulations. [The Guardian]

In a time of conflict, Ukrainian entrepreneurs are making war their business. [The New York Times]

GameStop has launched its NFT marketplace just as sales of such digital artworks are drying up amid the crypto industry crash. [Bloomberg]

Since yesterday, the PitchBook Platform added:

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Quick Takes

	The Daily Benchmark
	2016 Vintage European Real Assets Funds
	VC Deals
	Blockchain startup Mysten Labs eyes $2B valuation
	Impress picks up $100M
	Inspirna lands $50M
	Edge locks down $30M for playable game clips
	Fintech startup Kadmos pockets $29.1M
	Asset Class rakes in $11M+
	Portfolio Companies
	VC-backed GoHenry buys kids finance startup Pixpay
	Fundraising
	Qiming Venture Partners brings in $3.2B

The Daily Benchmark

2016 Vintage European Real Assets Funds

Median IRR

10.30%

Top Quartile IRR

17.42%

1.27x

Median TVPI

Select top performers

Tembo Capital Mining Fund II

EQT Infrastructure Fund III

Antin Infrastructure Fund III

*IRR: net of fees

12 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

VC Deals

Blockchain startup Mysten Labs eyes $2B valuation

Mysten Labs is in talks to raise $200 million or more at a $2 billion valuation led by FTX Ventures, the VC arm of crypto trading platform FTX, The Information reported. Mysten is led by Evan Cheng, who worked on the defunct Libra project at Meta. The startup is developing a blockchain for decentralized applications.

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Impress picks up $100M

Orthodontics specialist Impress has raised a $100 million Series B from investors including LBO France, Norgine Ventures and Claret Capital Partners. The Barcelona-based company plans to hold a second close of the round on an additional $25 million within 60 days.

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Inspirna lands $50M

Inspirna has raised a $50 million Series D co-led by Sands Capital and Vivo Capital. The biopharmaceutical company is developing small-molecule therapeutics for cancer treatment.

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Edge locks down $30M for playable game clips

Edge has raised a $30 million Series A led by Corner Ventures. The Tel Aviv-based company's platform allows users to record gameplay moments and share them as playable content.

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Fintech startup Kadmos pockets $29.1M

Blossom Capital has led a €29 million (about $29.1 million) investment in Berlin-based Kadmos. The startup offers a payments platform for cross-border employees.

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Asset Class rakes in $11M+

Fintech specialist Asset Class has raised an $11.6 million Series A led by Canapi Ventures. The Dublin-based company offers investment management software.

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Portfolio Companies

VC-backed GoHenry buys kids finance startup Pixpay

Children-focused fintech startup GoHenry has expanded with the acquisition of France-based peer Pixpay. The two companies will operate separately under their own brands. Pixpay, which offers online banking services to teenagers, has 200,000 members across France and Spain. Based in London, GoHenry is backed by investors including Edison Partners and Citi Ventures.

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Fundraising

Qiming Venture Partners brings in $3.2B

Shanghai-based Qiming Venture Partners has raised $3.2 billion across two funds. The firm closed its US dollar-denominated Fund VIII on $2.5 billion; it brought in 4.7 billion yuan (about $700 million) for RMB-denominated Fund VII. Qiming typically focuses on companies in the tech and healthcare industries.

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Chart of the Day

Source: PitchBook's Q1 2022 Real Assets Report

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PitchBook News - Bright spots in a rocky PE landscape

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