PitchBook News - US VC sends mixed signals

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The Daily Pitch: VC

October 13, 2022

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

Our latest PitchBook-NVCA Venture Monitor details how dealmaking, exits, fundraising and valuations responded to rising interest rates and complicated macroeconomic trends in Q3.

After reaching near-record amounts in Q2, venture debt deal values fell by half in Q3.

While 2022 has been one of the busiest years for PE investment in China in the last decade, it still represents a significant slowdown from last year's peak.

Today's Top Stories

US VC sends mixed signals as deal activity and fundraising diverge

The third quarter of 2022 saw a less resilient venture landscape in the US compared with the first half of the year. Deal activity across all stages recorded signs of distress, and the market continued to become increasingly consolidated, with fewer exits than at any time in recent history.

Dry powder remains at the highest level in our dataset, after years of record fundraising. This capital will help support seed and early-stage investment, but it is not likely to come to the rescue of highly valued, late-stage companies that are seeing an enormous decline in capital availability.

The latest PitchBook-NVCA Venture Monitor, sponsored by Insperity and J.P. Morgan, details how dealmaking, exits, fundraising and valuations responded to rising interest rates and complicated macroeconomic trends during Q3. Key takeaways:

Venture-backed companies collected nearly $43 billion during Q3. The figure is below the heights of 2021 and early 2022 but above historical averages—representing a durable, positive trend in the industry.

On the exit front, there have been just 59 public listings so far this year, compared with 303 in 2021 and 145 in 2020.

While overall fundraising figures are strong, established managers received the lion's share of commitments while emerging GPs struggled.

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Venture debt lending dips as borrowing costs rise

(Amnaj Khetsamtip/Shutterstock)

Startups rushed to secure venture debt earlier in the year. But after an initial surge, their appetite for debt has waned in recent months.

After reaching near-record amounts in Q2, venture debt deal values fell by half in Q3, according to PitchBook data. Investors say debt financing declined as the cost of borrowing increased.

Recommended Reads

CVC Capital Partners, Europe's largest PE firm, plans an IPO with implications for the entire sector. [Financial Times]

Employers burned by the labor shortage have taken to hoarding workers and may be hesitant to lay off workers even when the economy cools. [The New York Times]

Building wealth via homeownership is a time-tested American tradition. Now a new project is trying to replicate that mechanism in the rental market. [Axios]

Since yesterday, the PitchBook Platform added:

26

VC valuations

1816

People

468

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37

Funds

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Quick Takes

	The Daily Benchmark
	2013 Vintage Global PE Funds with more than $1B
	VC Deals
	Data privacy company DataGrail raises $45M
	Blockchain development startup Tatum nabs $41.5M
	FOLX Health picks up $30M
	IronVest emerges from stealth with $23M
	Connectbase secures $21M
	Zerion banks $12M+ Series B
	Portfolio Companies
	Kodiak Robotics secures $30M loan

The Daily Benchmark

2013 Vintage Global PE Funds with more than $1B

Median IRR

14.80%

Top Quartile IRR

20.24%

1.75x

Median TVPI

Select top performers

Sun Capital Partners VI

Altas Partners Pre-Fund Portfolio

TDR Capital III

*IRR: net of fees

39 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

VC Deals

Data privacy company DataGrail raises $45M

DataGrail has raised a $45 million Series C led by Third Point Ventures, with support from investors including Thomson Reuters Ventures and Felicis Ventures. DataGrail's data privacy software helps enterprise customers such as Instacart and Databricks build and manage privacy programs for their users.

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Blockchain development startup Tatum nabs $41.5M

Tatum has raised $41.5 million in a round led by Evolution Equity Partners, with support from investors including Octopus Ventures, 3VC and Tensor Ventures. Founded in 2018, the company offers a blockchain development platform to manage and scale fintech and Web3 applications.

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FOLX Health picks up $30M

FOLX Health has raised a $30 million Series B led by 7wireVentures. Based in Boston, the company provides digital healthcare services to the LGBTQIA+ community.

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View 1 competitors »

IronVest emerges from stealth with $23M

IronVest has raised $23 million in seed financing led by Accomplice. The New York-based company offers a biometric-based security platform intended to protect digital accounts in industries such as banking and healthcare.

View details

View similar company »

Connectbase secures $21M

Connectbase has raised $21 million in a Series C led by DigitalBridge Ventures. Based in Boston, the company operates a marketplace for buyers and sellers in the connectivity industry.

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View 20 competitors »

Zerion banks $12M+ Series B

Zerion has raised $12.3 million in a round led by Wintermute Ventures. The company's mobile wallets are designed to help DeFi investors, NFT collectors, and Web3 builders track and manage portfolio transactions.

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View 10 competitors »

PitchBook webinar: The state of sustainable investing

Join PitchBook to discuss the findings from our 2022 Sustainable Investment Survey. Analysts Hilary Wiek and Annika Villegas will touch on report insights, including the politicization of ESG, the increasing popularity of impact investing and challenges in the sustainable investing ecosystem. Key topics include:

The politicization surrounding ESG in 2021 and 2022 has had far-reaching impacts on investors and service providers with US-based investments, clients and stakeholders.

Investors and advisers seeking to incorporate ESG into their portfolios have varying goals and philosophies, leading to the proliferation of greenwashing allegations.

How the lack of clarity around defining and measuring impact outcomes and difficulty benchmarking nonfinancial goals were both frequently cited among the top challenges of sustainable investing.

Register now to secure your spot.

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Portfolio Companies

Kodiak Robotics secures $30M loan

Self-driving truck designer Kodiak Robotics has received a $30 million growth capital credit facility from Horizon Technology Finance. Kodiak's backers include Battery Ventures, CRV and Lightspeed. The company's vehicles deliver freight for commercial customers in Texas and Oklahoma.

View details

View 7 competitors »

Chart of the Day

"After raising and then deploying record amounts of capital in 2021, sponsors have been returning to their LPs and seeking re-ups throughout 2022. As a result, many LPs have already hit their allocation targets for the year. The consensus view at this year's Super Return conference was that two out of every three funds in the market today will need to push their closings into 2023."

Source: PitchBook's Q3 2022 US PE Breakdown

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PitchBook News - US VC sends mixed signals

Older messages

US PE deal value tops $819B

Tracking public fintech valuations

Big Tech's hunt for cheap startups

Raining on the dry powder parade

The politicization of ESG

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