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The Daily Pitch: VC

July 18, 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:

PE dealmakers in Europe remained resilient in H1 2022, with total deal value growing 35% year-over-year, according to our latest European PE Breakdown.

A deep dive into five of the key trends impacting US venture capital today.

PE firms have slowed their shopping spree in the consumer staples sector amid macroeconomic headwinds and market volatility.

Today's Top Stories

US venture capital trends in five charts

(Klaus Vedfelt/Getty Images)

In the second quarter of 2022, VC investors took a more cautious dealmaking approach while navigating the impact of the public market slowdown.

Here's a closer look at five key trends from our Q2 2022 PitchBook-NVCA Venture Monitor.

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European PE dealmakers persevere in uncertain macro environment

Dealmaking was a bright spot for European PE through the first half of 2022, with record dry powder and the rise of private credit funds keeping the deal environment moving despite a range of near-term risks.

The second half of the year may be a different story, however, due to slowing growth, rising interest rates and the possibility of a recession, according to our Q2 European PE Breakdown. Key takeaways from the report include:

Deal value totaled €463.5 billion through June 30, a year-over-year increase of nearly 35%, driven primarily by a spike in deal sizes.

Take-private activity also increased over H1 2021, and with take-privates offering one of the best risk-reward plays for PE firms, they're expected to remain a major theme in 2022.

Exit volume remained flat, but cumulative exit value fell by 25% YoY as valuations dropped.

Fund count is pacing toward its lowest total ever, with just 40 vehicles closed in H1, as LPs struggle to keep up with GPs' demand for capital.

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A message from DealCloud, by Intapp

Dealmakers remain optimistic despite heightened risk, valuation, and competition

The Spring 2022 edition of the Dealmaker Pulse Survey Report is live!

Almost half (45%) foresee an impact due to rising geopolitical, economic, and inflationary risks.
Many (66%) found increased pricing/valuations in their target sector to be the biggest challenge to closing deals in the previous six months.
Almost all private equity firms (94%) have closed deals in the previous six months, up from 89% in autumn 2021.
Most (80%) anticipate the same or higher volume of new deal closings during the coming six months.

Download a copy for more insights from private equity professionals on deal activity and fundraising, as well as data-driven analysis on the trends, factors, and challenges dealmakers may face in the months ahead.

Download the report.

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PE investments in consumer staples cool down amid market volatility

(Bloomberg Creative/Getty Images)

Private equity investments in companies selling consumer staples enjoyed a busy year in 2021, but the sector is showing signs of cooling.

PE firms this year have slowed down their shopping spree in the space—which consists of companies selling and manufacturing food and other goods intended for immediate, everyday use—amid macroeconomic headwinds and volatility in the financial markets.

So far this year, PE firms have participated in 121 deals worth $14.2 billion in the sector, according to PitchBook data. That's down about 32% from the same period last year, which recorded the highest deal value since 2018.

Recommended Reads

One writer's thoughts on how the US Federal Reserve has sealed the fate of interest rates for the rest of the summer. [Bloomberg]

A scarcity of semiconductors and raw materials has held back the production of electric cars, but US buyers remain enthusiastic. [The New York Times]

Vladimir Putin has signed a law effectively banning the use of cryptocurrency or NFTs to pay for goods and services. [Protocol]

Since yesterday, the PitchBook Platform added:

1

VC valuations

90

People

51

Companies

See what our data software can do

Quick Takes

	The Daily Benchmark
	2017 Vintage European Real Estate Funds
	VC Deals
	Stori hits $1.2B valuation
	Arch Systems raises $15M
	Sift Healthcare secures $9M

The Daily Benchmark

2017 Vintage European Real Estate Funds

Median IRR

11.55%

Top Quartile IRR

12.88%

1.34x

Median TVPI

Select top performers

CapMan Nordic Real Estate II

Partners Group Global Real Estate 2017

CASA Partners VII

*IRR: net of fees

9 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

VC Deals

Stori hits $1.2B valuation

Stori has raised $50 million from investors including BAI Capital, GIC and GGV Capital. The funding helps value the Mexico-based consumer fintech specialist at $1.2 billion.

View round

View 43 competitors »

Arch Systems raises $15M

Arch Systems has raised $15 million in a round led by Two Bear Capital. Based in Palo Alto, the company offers an analytics platform for electronics manufacturers.

View round

View 7 competitors »

Sift Healthcare secures $9M

Sift Healthcare has raised a $9 million Series A co-led by Allos Ventures and First Trust Capital Partners. The company offers a data science platform to help healthcare providers manage billing.

View round

View 18 competitors »

Chart of the Day

"Valuations have also been a target of investors hoping to see a reversal of recent growth to get back toward more investor-friendly terms."

Source: Q2 2022 PitchBook-NVCA Venture Monitor

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PitchBook News - VC trends in five charts

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