PitchBook News - Foodtech funding falls

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The Daily Pitch: VC

August 15, 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:

VC funding for foodtech companies fell in Q2 amid a broader slowdown in venture activity, according to our new Emerging Tech Research.

Our latest analyst note, breaking down key data in publicly traded US PE firms' Q2 earnings.

Our roundup of the most popular cities among Bay Area VCs looking to set up second offices.

Today's Top Stories

Foodtech funding falls as VC appetite for dealmaking diminishes

VC funding for the foodtech industry continued to experience a pullback amid macroeconomic headwinds in Q2. Startups around the world raised $5.6 billion across 275 deals—representing quarter-over-quarter drops of 21.5% and 32.8%, respectively.

Our latest Emerging Tech Research update provides a detailed look at the foodtech landscape, exploring industry opportunities like ghost kitchens and molecular ingredients. Takeaways include:

The foodtech sector recorded a rise in exits, particularly acquisitions—as market volatility impacted fundraising for many startups, in turn boosting opportunities for strategic acquirers.

Despite the funding dip, valuations and deal sizes continued to surge to new highs, with pre-money valuations up at every VC stage.

Inflation and shifting consumer spending habits may create a tailwind for ecommerce-focused food suppliers that can minimize delivery and service fees.

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When Bay Area VCs leave the valley, where do they go?

(Jenna O'Malley/PitchBook News)

The alleged demise of Silicon Valley may be overblown, but it's clear that venture capital is an increasingly global phenomenon.

When Bay Area VCs are looking to set up second offices, most of the top destinations are outside of the US—London, Beijing and Singapore are among the favorites.

These are the most popular secondary cities for Bay Area VCs.

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US PE firms focus on fundraising, deployment efforts in Q2 earnings

Publicly traded PE firms remained optimistic in their Q2 earnings calls, with a majority emphasizing fundraising and capital deployment efforts. As inflation rises and firms grapple with economic headwinds, demand has increased considerably for inflation-protecting strategies including floating-rate corporate credit, real estate and infrastructure. Our latest analyst note breaks down key data behind US PE firms' earnings in Q2 2022. Takeaways include:

The firms are likely to see more chances to make domestic and international platform acquisitions, given the strong US dollar and slowing economy. They're expected to favor targets with significant origination franchises in large markets, such as North America, Europe and Asia.

Q2 reinforced that deal activity and portfolio realizations are likely to be modestly lower, fundraising from LPs may be somewhat slower, and buyout-fund competition should remain elevated.

Public PE firms continue to add asset product lines—PE, real estate, credit, infrastructure, insurance and retail—to diversify and grow revenue.

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Middle-market PE firms prepare for a shift

(PM Images/Getty Images)

As the private equity world begins winding down from a torrid year of dealmaking, some sponsors in the middle market have switched into "risk-off" mode.

The public markets' downturn and subsequent volatility, along with rising interest rates and the possibility of a recession, are leading middle-market sponsors to begin changing their approach to dealmaking after 2021's good times. Those factors are creating opportunities to scale platform companies through add-on acquisitions, and buy high-growth businesses held in VC portfolios at lower prices.

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Shorting bonds hasn't been a popular trading strategy for 40 years, but an environment of rising interest rates may benefit short sellers as bond prices drop. [Institutional Investor]

Quick Takes

	The Daily Benchmark
	2013 Vintage Global Funds-of-Funds
	VC Deals
	EarlySalary in talks for $110M round
	GreenLight raises $109M in PIPE deal
	Wire secures $24M+ in Series C
	Brazil's Klavi picks up $15M
	Fora brings in $13.5M
	Logistics startup Hoopo grabs $10M Series A
	HashKey backs SignalPlus
	Exits & IPOs
	VC-backed Outdoor Voices weighs sale

The Daily Benchmark

2013 Vintage Global Funds-of-Funds

Median IRR

19.98%

Top Quartile IRR

25.15%

2.25x

Median TVPI

Select top performers

Glouston Ohio Midwest Fund II

TrueBridge Special Purpose II

Franklin Park Venture Fund Series 2013

*IRR: net of fees

50 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

VC Deals

EarlySalary in talks for $110M round

Personal loan provider EarlySalary is in negotiations to raise $110 million in a round led by TPG, with participation from Norwest Venture Partners, Reuters reported.

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GreenLight raises $109M in PIPE deal

GreenLight Biosciences has raised $109 million in a private investment round led by S2G Ventures. The company, which went public in February through a SPAC merger, is the developer of an RNA platform for crop protection and previously raised funding from investors including S2G, Morningside Venture Partners and Kodiak Venture Partners.

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Wire secures $24M+ in Series C

Wire has raised €24 million (about $24.6 million) in a Series C led by Cipio Partners and Skype co-founder Janus Friis' firm Iconical, TechCrunch reported. Wire provides an end-to-end encrypted messaging app.

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Brazil's Klavi picks up $15M

Klavi has raised $15 million in a Series A from investors including GSR Ventures, Iporanga Ventures and Parallax Ventures. The company's SaaS platform offers open finance services for businesses.

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View similar company »

Fora brings in $13.5M

Travel agency Fora has raised a $13.5 million Series A co-led by Heartcore Capital and Forerunner.

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Logistics startup Hoopo grabs $10M Series A

Israel-based Hoopo has raised $10 million in a round led by ZIM and theDOCK, CTech reported. The startup's technology allows companies to track and monitor their operations, inventory and equipment.

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View similar company »

HashKey backs SignalPlus

HashKey Capital has led a Series A round for SignalPlus. The company, which is developing a suite of options trading tools for digital and crypto assets, has now raised a total of $12 million.

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View similar company »

Exits & IPOs

VC-backed Outdoor Voices weighs sale

Outdoor Voices is considering options including a potential sale or raising new financing, according to a report from Bloomberg. The activewear brand is backed by investors including GV, General Catalyst and NaHCO3.

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View 31 competitors »

Chart of the Day

Source: PitchBook's Q2 2022 US VC Valuations Report

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PitchBook News - Foodtech funding falls

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