PitchBook News - Large investors flock to venture debt

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The Daily Pitch: VC

October 3, 2022

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

Venture debt has proven to be a lucrative business, and some of the world's largest asset managers want a piece of the action.

Key takeaways from this year's Mainnet crypto conference.

Our map exploring which European countries are stepping up for female founders.

Today's Top Stories

Large-scale investors flock to venture debt's 'phenomenal returns'

(eamesBot/Shutterstock)

Venture debt was a small, poorly understood asset class a decade ago.

But as startups have grown, so have their borrowing needs. Large asset managers and private equity firms have been piling into venture debt in recent years, drawn to the asset class' surprisingly lucrative returns and relatively low risk.

However, venture debt's unique characteristics make it difficult for newcomers with traditional credit experience to transition to lending to unprofitable startups.

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Developers buckle down on quality amid crypto winter

Home to the likes of Galaxy Digital, Fireblocks and OpenSea, New York City is quickly earning its title as crypto capital of the world. In late September, the city played host to Mainnet, where investors, developers and entrepreneurs met to review the latest in the world of cryptocurrency.

In our newest analyst note, senior emerging technology analyst Robert Le shares his key takeaways from the conference, including:

With capital tightening, particularly from VCs, many crypto projects are focusing on building real use cases, attracting long-term users and following prudent business practices—aspects that were largely absent during the last bull market.

Companies working to secure cross-chain bridges—one of the most vulnerable aspects of crypto infrastructure—are attracting VC dollars.

While the idea of an "ethereum killer" has mostly faded over the past year, which company will emerge as the second-most dominant L1 player remains unclear.

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A message from PitchBook Media

PitchBook's 2023 Media Kit released

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The brand-new 2023 Media Kit contains all the details to help your firm position itself in front of a VC or PE audience.

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Lithuania, Ireland stand out for Europe's female founders

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Lithuania and Ireland have proven to be among the most female founder-friendly countries in Europe, as VC investments in the region involving women entrepreneurs have grown over the last few years.

Check out our map to see where female-founded startups have garnered the highest percentage of overall VC deals.

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Recommended Reads

Many companies that have shifted enterprise-technology tools into the cloud in recent years, in part as a cost-saving measure, are still waiting for those investments to pay off. [The Wall Street Journal]

Is the era of fast, cheap genome sequencing finally here? [Wired]

While EV adoption is growing rapidly, many buyers still have doubts. Here's a comparison of the range of electric and gas-powered cars. [Visual Capitalist]

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Quick Takes

	The Daily Benchmark
	2017 Vintage Global PE Funds
	VC Deals
	Grow Therapy raises $75M
	Web3 security company Blowfish banks $11.8M

The Daily Benchmark

2017 Vintage Global PE Funds

Median IRR

26.05%

Top Quartile IRR

36.93%

1.57x

Median TVPI

Select top performers

Spectrum Discretionary Overage Program

Falfurrias Capital Partners Fund III

Summit Partners Europe Growth Equity Fund II

*IRR: net of fees

137 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

VC Deals

Grow Therapy raises $75M

Grow Therapy has raised $75 million in a round co-led by TCV and Transformation Capital. The mental health care group connects patients with therapists, manages insurance and more.

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Web3 security company Blowfish banks $11.8M

Paradigm has led an $11.8 million round for Blowfish, a provider of API security integrations designed to help wallets and custodians protect their users against attacks.

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View similar company »

Chart of the Day

"Deals of $100 million or more have symbolized the growth of VC worldwide, especially in Greater China. These deals had outpaced those in the US in 2016 and 2017 but have not kept pace with the growth in number since. Just 56 mega-rounds have closed in 2022, well below the 356 in the US and on a slower pace than 2021, when a record 261 mega-deals closed in Greater China."

Source: PitchBook's H1 2022 Greater China Venture Report