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The Daily Pitch: VC

August 11, 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:

How this year's market uncertainty has shaped valuations across stages and sectors, according to our Q2 2022 US VC Valuations Report.

Our latest Emerging Tech Research explores applications for hydrogen fuel cells in sectors like trucking, aerospace and warehousing.

Today's Top Stories

How uncertainty has shaped different stages of US VC valuations

US VC valuations have begun, in some ways, to mirror the broader market uncertainty, but certain stages and sectors have proved remarkably resilient, as some startups remain able to demonstrate their potential for value creation.

Our Q2 2022 US VC Valuations Report, sponsored by Silicon Valley Bank, shows how investor sentiment has—and hasn't—changed over the past quarter, and what that may mean for deal sizes, liquidity and more as the year goes on. Key takeaways from the report include:

Early-stage median pre-money valuations showed signs of contractions, recording their first quarter-over-quarter decline in more than two years, falling 16% in Q2 to $52 million.

Seed-stage investment has held up better than any other stage, with deal counts and sizes remaining elevated and median pre-money valuations up 33% this year over 2021.

Nontraditional investors have concentrated their more cautious behavior at the top end of the market—the top quartiles of deal size participation and valuation both fell by more than 13% in H1, but such declines aren't present at the medians.

Only 10 public listings for companies valued over $1 billion were recorded through June 30, compared with more than 100 in 2021, as the public market climate continues to put pressure on exit valuations.

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Emerging opportunities bring hydrogen fuel cells back to the stage

Hydrogen fuel cell technology, once viewed as the future of green cars, has fallen by the wayside as lithium-ion batteries have gained traction as the primary means of powering electric vehicles. While many larger corporate and state players have made substantial investments in the space, VC activity has remained limited compared with investment into battery-powered mobility solutions.

Our latest Emerging Tech Research analyst note tracks recent VC deal activity in the hydrogen EV sub-segment and explores emerging applications in trucking, aerospace, warehousing and marine vessels, sectors wherein the climate-friendly fuel has the potential to outperform its gas and electric peers.

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Q&A: Jefferies veteran dealmaker examines PE secondary market trends

(DNY59/Getty Images)

Falling valuations in public and private markets have put added pressure on the pace of private equity exits, which slowed in Q2 2022 for the second consecutive quarter. PE firms chose to hold on to portfolio companies longer, instead of selling investments at unattractive prices.

Yet the drop in exits, if followed by a decline in distributions, could lead to a flourishing secondaries market. On one side, many PE firms will pursue GP-led secondary deals to extend their ownership of valuable assets; on the other side, LPs may also resort to the secondary market to unload older assets and free up capital for new commitments.

We recently spoke to Andy Nick, a managing director at Jefferies' private capital advisory arm, about the private equity secondary market—including how it has fared amid sustained public market volatility and what to expect for secondary deal flow and pricing in the coming year.

Recommended Reads

Biotech startups need constant injections of capital to develop their drugs, making them particularly vulnerable to slowing economic growth, higher inflation and rising interest rates. [The Economist]

One writer explains how the COVID-19 pandemic was supposed to ease high housing prices in coastal superstar cities. Instead, he says, it spread them nationwide. [The Atlantic]

After nearly six months of fighting, the war in Ukraine has yielded Russia at least one big reward: expanded control over some of the most mineral-rich lands in Europe. [The Washington Post]

Since yesterday, the PitchBook Platform added:

16

VC valuations

1827

People

554

Companies

20

Funds

See what our data software can do

Quick Takes

	The Daily Benchmark
	2014 Vintage Global Real Estate Funds
	People
	Decibel brings in Signal Sciences' Peterson
	VC Deals
	CleverTap to collect $105M led by CDPQ
	Insilico extends Series D to $95M
	Boulevard bags $70M Series C
	Nightfall AI secures $40M Series B
	Injective brings in $40M
	Prellis Biologics raises $35M
	Biofourmis adds $20M to Series D
	Merkle tacks on $19M to Series A
	Expedock gains $13.5M for supply chain automation
	QED backs Nigeria's TeamApt
	Fundraising
	LongHash Ventures launches Fund II

The Daily Benchmark

2014 Vintage Global Real Estate Funds

Median IRR

11.50%

Top Quartile IRR

15.26%

1.46x

Median TVPI

Select top performers

Cortland Partners Fund I

L-A Saturn Acquisition

Exeter Industrial Value Fund III

*IRR: net of fees

63 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

People

Decibel brings in Signal Sciences' Peterson

Andrew Peterson has joined Decibel as a founder adviser. Peterson co-founded API security provider Signal Sciences, which was acquired by Fastly in 2020.

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VC Deals

CleverTap to collect $105M led by CDPQ

SaaS startup CleverTap has agreed to raise $105 million in Series D funding led by CDPQ, which committed $75 million to the round. CleverTap is the developer of a B2B platform for customer engagement and retention.

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Insilico extends Series D to $95M

AI-driven drug discovery startup Insilico Medicine has raised Series D2 funding led by Aramco Ventures' growth fund Prosperity7. The new investment brings the total Series D value to $95 million.

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Boulevard bags $70M Series C

Boulevard, the provider of a client-experience platform for self-care companies, has raised $70 million. The Series C was led by Point72 Private Investments.

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View 1 competitors »

Nightfall AI secures $40M Series B

Nightfall AI, the provider of a cloud data-protection platform, has raised $40 million in a round led by WestBridge Capital.

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Injective brings in $40M

Injective has raised $40 million in a round led by Jump Crypto. The New York-based company is the developer of an open, interoperable blockchain that is optimized for building DeFi applications.

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Prellis Biologics raises $35M

Prellis Biologics has raised a $35 million Series C co-led by Celesta Capital and Avidity Partners. The company uses bioprinting technology to recreate human tissues capable of replicating immune responses for use in drug discovery and development.

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Biofourmis adds $20M to Series D

Intel Capital has joined the Series D for virtual care and digital medicine startup Biofourmis, bringing the round total to $320 million. The company raised $300 million in the initial Series D in April.

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Merkle tacks on $19M to Series A

Merkle Science, the provider of a risk assessment and intelligence platform for preventing illegal activities involving cryptocurrencies, has raised $19 million in a Series A extension co-led by Beco Capital, Darrow Holdings and K3 Ventures. With the extension, the round totals $24 million.

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Expedock gains $13.5M for supply chain automation

Insight Partners has led a $13.5 million Series A for Expedock. The San Francisco-based company digitizes documents and automates processes for supply chains.

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QED backs Nigeria's TeamApt

QED Investors has made its first bet on an African company, with TechCrunch reporting the firm invested over $50 million into Nigeria's TeamApt. The company provides a business payments and banking platform.

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View 42 competitors »

Fundraising

LongHash Ventures launches Fund II

LongHash Ventures has launched its second fund with a target of $100 million, which it aims to reach by the end of the year, TechCrunch reported. The firm focuses on Web3 investments.

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View 49 investments »

Chart of the Day

Source: Q2 2022 PitchBook-NVCA Venture Monitor

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PitchBook News - Ups, downs of US VC valuations

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