PitchBook News - Corporate VCs keep writing checks

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The Daily Pitch: VC

October 18, 2022

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

Funding for rapid delivery e-grocers has fallen significantly as VCs focus on profitability.

CVCs were involved in more than a quarter of US VC deals in 2022, the highest participation rate this decade.

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

Today's Top Stories

Corporate VCs keep writing checks as other 'tourists' cool on startups

(Icatnews/Shutterstock)

Corporate venture capital firms have participated in more than a quarter of US VC deals in 2022, the highest rate this decade.

That show of strength comes at a time when other nontraditional investors have been retreating, lending more credibility to the idea that CVCs should be considered a core source of capital for startups.

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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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A message from Velocity Global

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On the podcast: From science fiction to science fact

Josh Wolfe, co-founder and managing partner of Lux Capital, joins the podcast to discuss why it's always a good time to be investing in groundbreaking tech. From nuclear power to computers that can smell, Wolfe shares why he's bullish on certain sectors.

Check out the episode to hear more about Lux's strategies and which kind of companies—and investors—Wolfe expects to see survive the downturn.

Plus, PitchBook analyst Anikka Villegas shares insights from the latest PitchBook Sustainable Investment Survey and from her analyst note on ESG and impact investing in private market real estate.

listen to the episode

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Rapid delivery e-grocers see funding plunge after pandemic-fueled highs

(Koshiro K/Shutterstock)

The rapid delivery e-grocery market has seen a significant decrease in venture capital interest as economic downturn reverses growth fanned by the pandemic.

With investors seeking a clear path to profitability for their portfolio companies, the sector has suffered layoffs and bankruptcies.

Recommended Reads

The female founders hoping to fix the gender disparity in cloudtech. [Fortune]

As CEO David Solomon works to shore up the bank's stock market valuation, Goldman Sachs is in for a major reorganization. [Financial Times]

China has abruptly delayed the publication of its third-quarter GDP data. [The Wall Street Journal]

Since yesterday, the PitchBook Platform added:

24

VC valuations

1800

People

538

Companies

18

Funds

See what our data software can do

Quick Takes

	The Daily Benchmark
	2012 Vintage Global VC Funds
	People
	Everett Randle joins Kleiner Perkins as partner
	VC Deals
	Byju's secures $250M from existing investors
	London's Stability AI wraps up $101M
	Viome Life Sciences raises $67M
	Saudi Arabia's Zid lands $50M
	Ambi Robotics hauls in $32M
	Greenzie raises $8M for autonomous lawn mowers
	Exits & IPOs
	Blibli targets $3.5B valuation in IPO
	Fundraising
	Will Ventures closes second fund on $150M
	Investors
	Kanye West plans to buy Parler

The Daily Benchmark

2012 Vintage Global VC Funds

Median IRR

20.00%

Top Quartile IRR

33.95%

2.14x

Median TVPI

Select top performers

BioGeneration Ventures II

Emergence Capital Partners III

Flagship Ventures Fund IV

*IRR: net of fees

41 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

People

Everett Randle joins Kleiner Perkins as partner

Everett Randle has joined Kleiner Perkins as a partner focused on financial software and financial services. He was previously a principal at Founders Fund where he invested in companies such as Stord, Rippling and Wave.

View details

View 1,008 investments »

VC Deals

Byju's secures $250M from existing investors

Byju's, India's most valuable VC-backed company, has raised $250 million from existing investors including Qatar Investment Authority, maintaining the edtech giant's $22 billion valuation, according to reports. Byju's previous backers include Prosus Ventures, Sequoia India, Silver Lake and Owl Ventures.

View round

View 44 competitors »

London's Stability AI wraps up $101M

Stability AI has raised $101 million in a round led by Coatue, Lightspeed and O'Shaughnessy Ventures. Stability AI is the creator of text-to-image generator Stable Diffusion.

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View similar company »

Viome Life Sciences raises $67M

Viome Life Sciences has raised $67 million in a round led by Bold Capital Group. The Series C brings the company's total funding to over $150 million. The microbiome- and diagnostics-focused startup is developing at-home tests for oral and throat cancer and other diseases.

View round

View 5 competitors »

Saudi Arabia's Zid lands $50M

Zid has raised a $50 million Series B led by Impact46. The company's platform helps retailers set up and manage their online stores.

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View similar company »

Ambi Robotics hauls in $32M

Ambi Robotics has raised $32 million from existing investors Tiger Global and Bow Capital, as well as Ahren and logistics company Pitney Bowes. Ambi offers robotic systems for ecommerce logistics and fulfillment.

View round

View 21 competitors »

Greenzie raises $8M for autonomous lawn mowers

Greenzie has raised $8 million in a round led by Atlanta Ventures. The company's software enables commercial lawn mowers to work autonomously.

View details

View similar company »

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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Exits & IPOs

Blibli targets $3.5B valuation in IPO

Global Digital Niaga, parent of Indonesian ecommerce company Blibli, is aiming to raise 8.17 trillion rupiah (about $528 million) in an upcoming IPO. Blibli plans to offer 17.8 billion shares priced between 410 and 460 rupiah each. At the high end of that range, Blibli would be valued at $3.5 billion.

View details

View 16 competitors »

Fundraising

Will Ventures closes second fund on $150M

Will Ventures, a Boston-based venture firm focused on sports and wellness-related startups, has raised $150 million for its second fund. The early-stage firm closed its first fund on $55 million in 2020. Will Ventures said the second fund's limited partners include professional athletes and several team owners.

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View 23 investments »

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Investors

Kanye West plans to buy Parler

Ye, the rapper formerly known as Kanye West, has agreed to acquire Parler, a social media app popular with conservatives. Parler's investors include Robert Mercer and Rebekah Mercer, who are major Republican political donors.

View details

View similar company »

Chart of the Day

Source: PitchBook's Q2 2022 Global Private Markets Fundraising Report

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PitchBook News - Corporate VCs keep writing checks

Key phrases

Older messages

A new look at fund performance

Is PE a Ponzi scheme?

VC data reveals distress

Global approaches to sustainable investing

US VC sends mixed signals

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