PitchBook News - Are down rounds really company killers?

Turbulence buffets AI, machine learning; charting private debt fundraising trends; Tiger Global targets $6B fund; Gather AI grabs $10M
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The Daily Pitch: VC
October 7, 2022
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Today's Top Stories  
What do down rounds really mean for companies?
The swift decline of the public markets has left many private startups with extended valuations and no exit opportunities in sight. In such an inhospitable market, many companies will be coming face-to-face with down rounds. But what do down rounds really mean for founders and investors in the long run?

Our recent analyst note dives into the data on post-down round exits, difficult IPO markets and investment returns to determine what's in store for companies taking down rounds in the current market. Key takeaways include:
  • Just 13% of companies raising a down round from 2008 to 2014 were unable to raise a new round or exit immediately after the down-valuation investment.

  • The majority of down rounds occur at the late stage, where there is ample room to adjust valuations that have grown enormously over the past decade.
read it now
 
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Market Map: Economic volatility reshapes the outlook for AI & ML
(Jenna O'Malley/PitchBook News)
Ongoing economic turbulence has changed outlooks on AI and machine learning's growth.

Cloud computing costs are coming under scrutiny, and general economic volatility is favoring startups that prioritize efficiency over those that focus on model accuracy and complexity.

Explore our AI and machine learning market map to see where investors are putting their money.
explore the data
 
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A message from Apex Group  
79% of PE firms are using third-party providers–find out why
More and more fund managers are turning to trusted partners to fulfil their growth ambitions in 2022 and beyond.

The key factors of any firm with portfolio diversification and global investment strategies are directly influenced by these core requirements right now and in the future:
  • Human resource needs
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This eBook describes how outsourcing to a single-source partner will allow private equity firms to maximize growth and investor returns, reduce costs and risk, and effectively manage global regulations and data security.

To find out more about the benefits and savings that Apex Group's single-source solution can provide, download the Outsourcing eBook on the Apex Group website here.
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Charting private debt fundraising trends
(StacieStauffSmith Photos/Shutterstock)
Global private debt fundraising has slowed down slightly this year, tailing off from last year's record-setting pace.

In the first six months of 2022, 66 private debt funds raised a total of $82 billion—compared with the roughly $93 billion collected across 130 vehicles in the same period a year ago, according to our recent Global Private Debt Report.

Direct lending, the largest private debt category, represented over a third of capital raised in the first six months of this year. Other strategies—in particular credit special-situations and real-estate debt—also received strong investor interest during that period.
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Recommended Reads
Companies routinely destroy millions of used hard drives in the name of data security—but industry insiders say they could be reused instead. [Financial Times]

A new macroeconomic era is emerging. What will it look like? [The Economist]

Hopes of a sustainable recovery for San Francisco's economy are being dragged down by a glut of unused office space, accelerating tech layoffs and a downturn in VC investment. [San Francisco Chronical]
 
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Quick Takes  
  The Daily Benchmark  
  2017 Vintage Global Real Estate Funds  
  VC Deals  
  Altana Technologies banks $100M  
  Electra picks up $85M to decarbonize iron  
  Alkymi raises $21M Series A  
  Mithril Capital leads $17.5M round for Genetesis  
  Revelio Labs secures $15M  
  Gather AI nabs $10M  
  Fundraising  
  Tiger Global eyes $6B fund  
 
 
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The Daily Benchmark  
2017 Vintage Global Real Estate Funds
Median IRR
14.47%
Top Quartile IRR
19.90%
1.39x
Median TVPI
Select top performers
Penwood Select Industrial Partners V
Realterm Logistics Fund II
Principal Strategic Real Estate Equity Fund II
*IRR: net of fees
73 Funds in Benchmark »
Check out the latest version of PitchBook Benchmarks
 
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VC Deals  
Altana Technologies banks $100M
Altana Technologies has raised a $100 million Series B led by Activate Capital Partners. Based in New York, the company offers a supply chain visibility platform.
View round
 
View 5 competitors »
 
Electra picks up $85M to decarbonize iron
Electra, a developer of technology that uses renewable electricity to make carbon-free iron, has raised $85 million. The Colorado-based company is backed by investors including Breakthrough Energy Ventures, BHP Ventures, Temasek and S2G Ventures.
View round
 
View similar company »
 
Alkymi raises $21M Series A
Alkymi has raised $21 million in a round led by Intel Capital. Based in New York, the company is the developer of a workflow automation platform designed to manage unstructured data.
View round
 
View similar company »
 
Mithril Capital leads $17.5M round for Genetesis
Genetesis has raised a $17.5 million Series A led by Mithril Capital. The company's biomagnetic imaging technology diagnoses cardiovascular dysfunction.
View round
 
View 4 competitors »
 
Revelio Labs secures $15M
Elephant Partners has led a $15 million Series A for Revelio Labs, the developer of an HR analytics platform for workforce data.
View round
 
View 83 competitors »
 
Gather AI nabs $10M
Gather AI, a developer of supply chain robotics designed to help warehouse operators manage inventory, raised a $10 million Series A financing round led by Tribeca Venture Partners.
View round
 
View 8 competitors »
 
 
Fundraising  
Tiger Global eyes $6B fund
Tiger Global plans to raise $6 billion for its 15th fund focused on private technology companies, according to reports.
View fund
 
View 838 investments »
 
 
Chart of the Day  
Source: PitchBook's Q2 2022 Global Private Markets Fundraising Report
 
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