PitchBook News - Forecasting a cloudy 2023 for VC

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The Daily Pitch: VC

December 19, 2022

The Daily Pitch is powered by PitchBook’s industry-defining research and best-in-class data

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

Our latest Emerging Tech Research explores agtech's resilience amid rough terrain.

PitchBook analysts predict another rocky year for VC in our 2023 US Venture Capital Outlook.

Chart of the day: VC deal value by country, from our DACH Private Capital Breakdown.

Today's Top Stories

Down, down and down around

2022 has nearly come to an end. Many investors will be happy to turn the corner on a year that saw crypto ride a remarkable rollercoaster and had VC firms clutching their pearls. But it may not be over quite yet, according to PitchBook analysts.

Next year is shaping up to be an even more stress-inducing ride for investors, according to our 2023 US Venture Capital Outlook. But while our analysts predict some downward movement, there is of course always some upside—if you know where to look.

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Agtech plows through turmoil

Extreme weather events, geopolitical turmoil, supply chain disruptions: There is no doubt that 2022 has been a crazy year. And the crazier it's gotten, the more apparent it has become that investors should be focusing on what really matters: food.

While macroeconomic factors have battered other sectors, they've buoyed agtech investment, making Q3 the vertical's third-strongest quarter on record for deal value. However, the sector isn't immune to other funding challenges.

Our latest Emerging Tech Research report unpacks VC activity in agtech, explores emerging opportunities in weeding robots and regenerative agriculture software, and spotlights innovative startups driving forward insect production and farmland investing.

read the preview

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A message from Silicon Valley Bank

SVB survey reveals fundraising expectations

SVB's data analysis and fund CFO survey indicate that despite a market slowdown, the private equity industry shows strong momentum. Dry powder levels remain near record highs, and investment levels are above pre-pandemic levels. On the fundraising side, 44% of surveyed fund CFOs expect fundraising to reach 2021 levels within 1 to 3 years.

In fact, downturns have historically brought great opportunity, with funds raised during recessions outperforming those of surrounding years.

Nevertheless, industry-specific challenges proliferate, such as persistently elevated valuations and the denominator effect. Fund managers and limited partners are grappling with these and other issues in an increasingly difficult environment.

Read our report every quarter to stay on top of private equity trends CFOs need to know.

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Private debt outlook 2023: Risk and opportunity co-exist

(kudla/Shutterstock)

While private debt deal flow and fundraising pace have slowed from last year's record highs, the industry still ended this year on solid footing. But 2023, which is expected to be a tumultuous year, will present the industry with a series of challenges.

Anticipating greater uncertainty in the economy and more rate hikes from the Federal Reserve, investors still view private debt as attractive. However, they will want more downside protections for their private credit investments in this environment.

Recommended Reads

Gener8tor is the biggest startup accelerator you've never heard of. [TechCrunch]

Will the US try to curb China's tech ambitions as the latter ramps up production of decade-old chip tech? [Reuters]

Bio-based plastics aim to capture carbon. But at what cost? [Wired]

Since yesterday, the PitchBook Platform added:

1

VC valuations

31

People

21

Companies

See what our data software can do

Quick Takes

	The Daily Benchmark
	2014 Vintage North American Real Estate Funds
	VC Deals
	Amber raises $300M for crypto trading
	Virgio rakes in $37M Series A
	Element Energy pockets $28M
	Influencer marketing specialist Howl secures $27M
	Big banks lead $24M round for Acin
	Plenna raises $4.4M

The Daily Benchmark

2014 Vintage North American Real Estate Funds

Median IRR

13.60%

Top Quartile IRR

16.52%

1.50x

Median TVPI

Select top performers

Cortland Partners Fund I

L-A Saturn Acquisition

Exeter Industrial Value Fund III

*IRR: net of fees

42 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

VC Deals

Amber raises $300M for crypto trading

Amber, a crypto trading platform, has closed a $300 million Series C led by Fenbushi Capital. The startup had been closing on an extension of its Series B when it decided to move forward on a Series C instead.

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Virgio rakes in $37M Series A

Fashion tech startup Virgio has raised a $37 million Series A led by Prosus Ventures, Accel and Alpha Wave, bringing the company's valuation to $161 million.

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Element Energy pockets $28M

Element Energy, a startup specializing in battery management and storage, has secured a $28 million Series B co-led by Cohort Ventures, with participation from investors including LG Technology Ventures and Prelude Ventures.

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View similar company »

Influencer marketing specialist Howl secures $27M

Howl, a startup focused on influencer advertising and marketing, has raised a $27 million Series A led by Highland Capital Partners, The Information reported. Founded in 2020, the startup counts Sephora and Samsung among its clients.

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Big banks lead $24M round for Acin

Acin, a startup that offers risk assessment and analysis software, has closed a $24 million Series B led by several high-profile banks, including JP Morgan, Citi Bank, BNP Paribas and Barclays. Notion Capital, Talis Capital and Fitch Ventures also participated.

View round

View 1 competitors »

Plenna raises $4.4M

Plenna, a Mexico City-based women's health startup, has raised $4.4 million in a seed round led by Urban Innovation Fund, with backing from firms including 500 Global, Canary and Bridge Latam.

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View similar company »

Chart of the Day

"Given its size relative to Germany, Switzerland's VC activity has been strong in recent years. For example, VC deal value was approximately three times larger in Germany than Switzerland through Q3 2022, while Germany's GDP was €4.2 trillion in 2021, roughly five times bigger than Switzerland's €812.9 billion."

Source: PitchBook's 2022 DACH Private Capital Breakdown

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PitchBook News - Forecasting a cloudy 2023 for VC

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