PitchBook News - US PE deal value tops $819B

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The Daily Pitch: VC

October 12, 2022

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

The recent slowdown in PE activity is a reset to pre-pandemic levels, according to our latest US PE Breakdown.

Brad Feld, partner and co-founder of VC firm Foundry, joins the "In Visible Capital" podcast to kick off the new season.

Today's Top Stories

US PE deal value tops $819B as industry reverts to the 'old normal'

After a busy start to the year, US PE dealmakers are finally feeling the bite of higher interest rates, with activity in Q3 collectively slowing across M&A, growth equity and recap deals by more than 20% year-over-year.

Yet what may seem like a dramatic decline could also be considered a reset. Far from being a new normal, 2021's blistering pace of activity was an aberration, making the "old normal" of the pre-pandemic years a better comparison for private equity, according to our Q3 2022 US PE Breakdown, sponsored by Stout and DealCloud. Among the takeaways from the report:

Deal value topped $819 billion through Q3—equivalent to the second-highest annual total on record—as PE's resilience and investors' dry powder kept dealmaking on par with 2021 levels through July despite macroeconomic headwinds.

In the IT sector, investors closed 254 deals worth an aggregate $57.5 billion in Q3, in line with historical quarterly averages, as declining public market valuations spark buyers' interest in high-growth companies.

For the first time in over a decade, take-privates surpassed $100 billion for the second consecutive year. In a major departure from the past, private debt funds have stepped in where banks left off to finance these deals.

US PE fundraising totaled $259 billion through Q3, on pace with 2021, yet with many LPs having hit allocation targets for 2022, fundraising is expected to end the year with more of a thud than a bang.

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'In Visible Capital' returns for Season 6

Season 6 of PitchBook's "In Visible Capital" podcast premieres with Brad Feld, partner and co-founder of early-stage VC firm Foundry, who discusses how venture investors behave in a downturn, why entrepreneurs may want to steer clear of structured deals, why so many good companies are born in such bad times, and more.

Plus, PitchBook senior analyst Kyle Stanford joins to discuss key takeaways from the Q3 2022 PitchBook-NVCA Venture Monitor and the latest Quantitative Perspectives report.

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A Message from Twin Brook Capital Partners

When the market throws a curveball, you need a lender you trust

Twin Brook's Betsy Booth, Rich Christensen, and Tim Wentink discuss their experiences working with PE sponsors and borrowers in the lower mid-market and why relationships matter, particularly in an evolving market environment, in the latest issue of Middle Market Growth Magazine.

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HR tech startup Factorial joins European unicorn club

(tomertu/Shutterstock)

HR specialist Factorial has notched a $1 billion valuation after raising a $120 million Series C, almost doubling its value from its previous round.

Europe has already seen a record amount of capital invested in HR tech in 2022, as companies continue to grapple with the shift to hybrid and remote work.

Recommended Reads

Could virtual reality headsets be the new work computer? [The Wall Street Journal]

Britain's biggest law firms are struggling to attract talent in the US as the pound slumps. [Financial Times]

Amid turbulent markets, the likes of Lockheed and GE are rethinking their investment strategies. [Institutional Investor]

Since yesterday, the PitchBook Platform added:

33

VC valuations

1991

People

513

Companies

20

Funds

See what our data software can do

Quick Takes

	The Daily Benchmark
	2019 North American Debt Funds
	A message from Moss Adams
	Life sciences deal and market outlook
	VC Deals
	Neumora Therapeutics secures $112M Series B
	Airwallex raises $100M
	Stairwell nabs $45M
	Brave Health picks up $40M Series C
	Pleno collects $40M Series A
	Web3 startup Rye gets $14M seed round
	NocoDB raises $10M+ for smart spreadsheets
	Khosla Ventures leads $10M round for Adyton
	Fundraising
	NextView wraps up $200M

The Daily Benchmark

2019 North American Debt Funds

Median IRR

12.80%

Top Quartile IRR

18.10%

1.18x

Median TVPI

Select top performers

H.I.G. Bayside Loan Opportunity Fund V

Antares Special Opportunities Fund

OrbiMed Royalty & Credit Opportunities III

*IRR: net of fees

52 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

A message from Moss Adams

Life sciences deal and market outlook

Although deal value throughout the industry declined in Q2, gene therapy companies showed growth and drug discovery and biotechnology companies showed high levels of investment as artificial intelligence (AI) and machine learning (ML) sped the drug discovery process.

Explore how current market trends and conditions could impact your business and any potential transaction plans in Moss Adams' industry report.

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VC Deals

Neumora Therapeutics secures $112M Series B

Neumora Therapeutics, a developer of precision medicines for brain diseases, has raised $112 million. Investors including Abu Dhabi Growth Fund, Altitude Life Science Ventures and ARCH Venture Partners participated in the round.

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Airwallex raises $100M

Airwallex, an Australia-based cross-border payments specialist, has raised $100 million in a Series E extension round that sustained its valuation at $5.5 billion. Existing investors including Square Peg, Salesforce Ventures and Sequoia participated in the funding.

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Stairwell nabs $45M

Stairwell has raised a $45 million Series B led by Section 32. The company is a developer of cybersecurity software designed to monitor, manage and respond to emerging malware threats, including supply chain attacks. Investors including Sequoia, Accel and Lux Capital also participated in the funding.

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Brave Health picks up $40M Series C

Brave Health has raised $40 million in a round led by Town Hall Ventures. Based in Miami, the company is a developer of virtual mental health services that connect patients with therapists, psychiatric providers and peer support specialists.

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Pleno collects $40M Series A

Pleno has raised $40 million in a round led by Deerfield Management and Foresite Capital. The company is the developer of a biological analysis platform intended to detect targets for clinical testing and biomedical research.

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View similar company »

Web3 startup Rye gets $14M seed round

Rye has raised $14 million in a round led by Andreessen Horowitz, with support from investors including Solana Ventures and L Catterton. The company is the developer of a shopping platform designed to help merchants build their own decentralized infrastructure stack.

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View 6 competitors »

NocoDB raises $10M+ for smart spreadsheets

NocoDB has raised $10.5 million in a seed round led by Decibel and OSS Capital. The company is a developer of open-source software designed to transform data into custom spreadsheets without the use of code.

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View similar company »

Khosla Ventures leads $10M round for Adyton

Adyton has raised a $10 million Series A led by Khosla Ventures. The company is a developer of defense technology designed to manage personnel, secure communication and support structured data collection.

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View 35 competitors »

Don't miss our upcoming webinar

With US midterm elections and potential policy shakeups on the horizon, investors must prepare for possible regulatory changes and their impact on industries such as fintech.

Join Washington, DC, policy analysts John Sonsalla and Ryan Schoen as they share their expected policy outcomes for 2022 and how these may affect credit, partnerships between banks and fintech, crypto and more in the years to come. This discussion will also explore how the Consumer Financial Protection Bureau and the 2024 presidential race may shape the fintech regulatory environment moving forward.

Register now to secure your spot.

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Fundraising

NextView wraps up $200M

NextView Ventures has raised $200 million across two vehicles, a $135 million seed-stage fund and a $65 million opportunity fund. The firm will continue to target investments in sectors such as fintech, digital health, data, consumer and B2B SaaS.

View details

View 171 investments »

Chart of the Day

"There is a widely held belief in the space that Europe has led the sustainability charge, with most other regions trailing behind it in terms of adoption and sophistication of programs. Interestingly, our data this year showed that 35% of our North American respondents who have implemented sustainable investment principles began doing so more than five years ago, whereas the European figure was 23%."

Source: PitchBook's 2022 Sustainable Investment Survey

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latest US PE Breakdow safe senders list The Daily Pitch

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PitchBook News - US PE deal value tops $819B

Key phrases

Older messages

Tracking public fintech valuations

Big Tech's hunt for cheap startups

Raining on the dry powder parade

The politicization of ESG

Are down rounds really company killers?

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