PitchBook News - Temperature check for emerging tech

Read online | Don't want to receive these emails? Manage your subscription.

Log in

The Daily Pitch: VC

August 22, 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 Indicator offers a look at technologies that top investors view as the most promising.

Companies in the B2B and IT sectors have accounted for some of the biggest PE-backed European corporate carveouts in 2022 so far.

Today's Top Stories

Top VCs stand by Web3, DeFi as fintech falls in Q2

The Emerging Tech Indicator tracks seed and early-stage investments from the world's top 15 most successful VC firms in order to gauge technology funding trends. In the second quarter of 2022, our analysts tracked $5.1 billion in investment across 195 deals, down significantly from $8.3 billion in Q1 as leading firms pulled back on tech funding.

The report provides an overview of the pace of early-stage investment trends across different areas of technology, diving deep within key segments: Web3 and DeFi, DevOps, foodtech, AI and machine learning, and ecommerce. Key takeaways include:

Web3 and DeFi represented the largest area of ETI investment for the fourth consecutive quarter, with $868 million recorded across 24 deals. However, that number is down significantly from the more than $2 billion invested in each of the prior two quarters.

DevOps secured $654 million in ETI investment across 21 deals in Q2.

Traditionally strong tech categories saw a funding drop, with fintech seeing one of its weakest quarters on record.

Q2 VC activity declined significantly from the peak levels reported over Q4 2021 and Q1, and we expect activity to remain relatively volatile in the current environment.

read the report

Share:

European VC valuations trend upward in the face of uncertainty

Despite falling public tech stocks and a bleak market outlook, European VC valuations still paced above last year's figures through June 30. VC dealmaking in Europe remained strong, helping keep valuations afloat. Yet as the year progresses, the full impact of a downturn may cause startup price tags to deflate.

Our Q2 2022 European VC Valuations Report explores how valuations fared across stages, sectors and geographies, and what current market conditions may mean for the future. Key takeaways include:

Early-stage European valuations remained relatively insulated from public market volatility, currently pacing 34.1% higher than in 2021.

The number of down rounds ticked upward slightly to stand at 15.4% of deals closed in H1.

The total worth of European unicorns grew 35%, mostly due to strong dealmaking in Q1.

A significantly quieter IPO market has seen public listing exit valuations drop by 57% from 2021's annual total.

read it now

Share:

A message from McDermott Will & Emery

Join leading professionals for a can't-miss networking event in New York City

Experience the healthcare private equity industry's most dynamic event of the fall! Join fellow senior leaders at McDermott Will and Emery's HPE New York for riveting conversations on the most pressing topics and trends impacting healthcare investing.

Whether you are looking to identify new investment opportunities or position your company for growth, this event will provide unparalleled access to leading senior professionals active in healthcare investing including private equity investors, executives and founders. Join us on Friday, October 21 at the iconic Lotte New York Palace for a half-day of insightful panels and premier networking opportunities at HPE New York 2022.

Register today

Share:

B2B, IT deals dominate European PE carveouts as activity slows

(eamesBot/Shutterstock)

Private equity-backed European corporate carveouts in the B2B and IT sectors have dominated in 2022 as companies look to shore up their balance sheets, often by divesting noncore assets.

The largest of these was the acquisition of water utility company Suez Environment from Veolia UK for about $13.1 billion in January, which accounted for just over a third of the total deal value so far this year.

Recommended Reads

US private equity firms are looking abroad for commitments as pension funds struggle. [The Wall Street Journal]

Twenty-five years after the Asian financial crisis, cash-rich Korean buyout companies now rival global players. Here's how South Korea learned to love private equity. [Financial Times]

The startup hoping to take disinfecting ultraviolet light beyond the hospital. [Fortune]

Since yesterday, the PitchBook Platform added:

126

People

50

Companies

See what our data software can do

Quick Takes

	The Daily Benchmark
	2014 Vintage European Debt Funds
	VC Deals
	Customer engagement platform Solsten pockets $21.8M Series B
	Airs Medical secures $20M
	Voyager Capital leads $7.75M round for Sofy

The Daily Benchmark

2014 Vintage European Debt Funds

Median IRR

7.10%

Top Quartile IRR

7.40%

1.16x

Median TVPI

Select top performers

RoundShield Fund I

M&G Real Estate Debt Fund II

MCP Private Capital Fund II

*IRR: net of fees

12 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

VC Deals

Customer engagement platform Solsten pockets $21.8M Series B

Berlin-based Solsten has raised $21.8 million in a round led by Konvoy. The startup's platform is designed to help companies create more engaging digital experiences for customers through the analysis of human psychology.

View round

View similar company »

Airs Medical secures $20M

Airs Medical has raised a $20 million Series B from investors including Q Capital Partners and Hanwha Life. Based in South Korea, the company is a developer of AI-based diagnostic tests and robotics technologies for healthcare providers.

View round

View similar company »

Voyager Capital leads $7.75M round for Sofy

Sofy has raised a $7.75 million seed round led by Voyager Capital. Based in the Seattle area, the startup is the developer of a no-code platform for testing mobile apps.

View round

View 5 competitors »

Chart of the Day

"Given the limited upside—and hopefully limited downside—of private debt due to the return of capital plus interest characteristics that provide few opportunities for outsized returns, private debt will generally lag when equities are rising dramatically."

Source: PitchBook's 2022 Global Fund Performance Report (as of Q4 2021 with Preliminary Q1 2022 Data)