PitchBook News - Growth after a down round

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The Daily Pitch: VC

September 29, 2022

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In today's Daily Pitch, you'll find:

Contrary to expectations, venture-backed companies that have taken on a down round are likely to continue on the path to growth.

Our Emerging Tech Research clears the air on VC-backed carbon capture efforts.

Today's Top Stories

Down rounds help VC-backed founders shift growth expectations

(wan wei/Shutterstock)

Down rounds often signal risks of a struggling business to future investors. But contrary to expectations, venture-backed companies that have taken on a down round are likely to continue on the path to growth—including raising new rounds and restructuring following a buyout.

PitchBook data shows that nearly 1 in 5 companies that raised a down round since 2016 took the buyout path.

Recommended Reads

Bitcoin mining company Bitdeer is attempting to raise $200 million to buy discounted hardware from other struggling miners. [Forbes]

More companies than ever are sharing how much jobs pay. [Bloomberg]

Why KKR thinks many endowments and foundations may be making a mistake by not upping headcount. [Institutional Investor]

Since yesterday, the PitchBook Platform added:

14

VC valuations

1706

People

510

Companies

23

Funds

See what our data software can do

Quick Takes

	The Daily Benchmark
	2018 Vintage Global Secondaries Funds
	A message from The American Investment Council
	Diamonds in the rough
	VC Deals
	Mental health startup Rippl launches with $32M seed round
	Coral raises $20M for crypto developer tools
	Plant-based food maker Wicked Kitchen gobbles up $20M
	Recycling startup EverestLabs lands $16.1M Series A
	Invisible AI banks $15M
	Bionic clothing startup Cionic takes on $12.5M
	Femtosense bags $8M
	Bridge Money scores $5M+
	Fundraising
	Scale Venture Partners closes Fund VIII on $900M
	DeFi blockchain Sei launches $50M fund

The Daily Benchmark

2018 Vintage Global Secondaries Funds

Median IRR

58.80%

Top Quartile IRR Hurdle Rate

70.47%

1.56x

Median TVPI

Select top performers

Greenspring Secondaries Fund III

Glouston Private Equity Opportunities VI

Lexington Capital Partners IX

*IRR: net of fees

16 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

A message from The American Investment Council

Diamonds in the rough

Private equity's calling card is improving businesses, but investors have quietly created hundreds of them through carveouts. After buying “noncore assets”—which is a polite way of saying unloved or under-resourced business units of much bigger corporations—PE firms give them the attention and resources they need to become independent companies, often with new names, logos, and management teams. More than 4,000 such companies have been created over the past decade.

In conjunction with PitchBook, the American Investment Council has released Diamonds in the rough: How PE breathes new life into unloved businesses. With long-term visions, PE investors can take those businesses off the backburner and give them the chance they need to become successful, standalone companies.

To download the report and learn more, click here

Share:

VC Deals

Mental health startup Rippl launches with $32M seed round

Rippl has raised $32 million in a round led by ARCH Venture Partners and General Catalyst. Based in Seattle, the company is a provider of mental healthcare services for seniors with dementia and other neurocognitive conditions.

Coral raises $20M for crypto developer tools

Coral has raised $20 million in a round co-led by FTX Ventures and Jump Crypto. The company is a developer of tools that allow users to access decentralized apps and assets across different blockchains.

View round

View similar company »

Plant-based food maker Wicked Kitchen gobbles up $20M

Wicked Kitchen has raised $20 million from investors including Ahimsa VC and NRPT. The company is a provider of plant-based foods including noodle cups, sauces and meal kits.

View round

View similar company »

Recycling startup EverestLabs lands $16.1M Series A

EverestLabs has raised $16.1 million in a round led by Translink Capital. The company is a developer of AI-based software and robotics designed for use by recycling plants, consumer packaging companies and manufacturers.

View round

View 1 competitors »

Invisible AI banks $15M

Invisible AI, a manufacturing AI specialist, has raised a $15 million Series A led by Van Tuyl Companies. The company has secured $21 million in total since its founding in 2018.

View round

View 12 competitors »

Bionic clothing startup Cionic takes on $12.5M

BlueRun Ventures has led a $12.5 million Series A for Cionic. The company offers clothing that analyzes, predicts and augments movement for individuals with multiple sclerosis, cerebral palsy and other mobility impairments.

View round

View similar company »

Femtosense bags $8M

Femtosense has raised an $8 million Series A led by Fine Structures Ventures. The company is developing tech that will enable AI processing on consumer electronics such as hearing aids and earbuds.

View round

View similar company »

Bridge Money scores $5M+

Bridge Money has raised $5.8 million in seed funding led by TMV. The company's mobile banking app helps individuals earn money through activities such as cashback, surveys, ad viewing, referrals and raffles.

View round

View similar company »

Fundraising

Scale Venture Partners closes Fund VIII on $900M

Scale Venture Partners has closed its eighth fund with $900 million in commitments. The vehicle will target cloud and SaaS software companies, with an emphasis on cognitive apps.

View fund

View 196 investments »

DeFi blockchain Sei launches $50M fund

Layer-1 blockchain Sei has raised $50 million for its Ecosystem and Liquidity Fund, which will be used to support the development of new DeFi applications on its platform.

Chart of the Day

"Direct lending continues to be the standout strategy, accounting for more than a third of capital raised in the first half of the year, but other substrategies, such as special situations funds and real estate debt funds, also garnered plenty of attention."

Source: PitchBook's H1 2022 Global Private Debt Report

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PitchBook News - Growth after a down round

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Where allocators see opportunities

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Will startups pivot from IPO to M&A?

VC data after a down round

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