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The Daily Pitch: VC

December 28, 2022

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

Hello, our news and research teams are taking a break over the holidays.

Today, we'd like to highlight the four new verticals we added to our Emerging Technology Research coverage during Q4: Clean Energy, Crypto, E-Commerce, and Retail Fintech.

Stay tuned for even more coverage launches in the new year!

Clean energy VC investment shines in a storm

The energy crisis that followed Russia's invasion of Ukraine has accelerated demand for alternative energy sources—especially low-carbon ones that can be produced domestically at a lower cost than imported fuels.

Meanwhile, growing investment in clean energy supply chains and hefty government spending measures provide a foundation for future growth.

It all adds up to a fertile environment for startups in the space, as PitchBook senior analyst John MacDonagh lays out in our newly launched Clean Energy Report:

VC activity has been remarkably resilient, with $11 billion raised across 401 deals in the segment. That's on pace to match the record set in 2021.

Intermittent renewable energy, especially solar, has outperformed relative to last year. So have clean fuels, led by low-carbon hydrogen.

The Inflation Reduction Act, signed into law by President Biden in August, gives significant support to clean energy production. Its effects are already being felt.

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A tale of two crypto markets

It's hard to find good news about crypto these days.

The sudden collapse of FTX has seemingly triggered a tidal wave of negative sentiment across the whole vertical, causing an already-skeptical public to shy away.

But is the news really all bad? It depends on where you look, according to PitchBook senior analyst Robert Le.

Our inaugural Crypto Report examines the state of the vertical and its various segments, charting deal activities and remaining opportunities.

The long and short of it is crypto is far from done:

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E-commerce VC market finds its footing after 2021 funding spike

The surge in online shopping through the pandemic was followed by a boost in VC funding for e-commerce specialists.

While that extra lift has waned, the market has displayed strength through Q3, with $20 billion raised, for an increase of 45% from 2020. Excluding 2021's sky-high numbers, this is in line with previous year-over-year growth, despite high inflation and supply chain obstacles.

VC funding has been weighted toward late-stage deals, but deal count is more evenly distributed across stages as investors continue to support emerging technologies, including VR & AR shopping and livestream commerce.

Our inaugural E-Commerce Report examines the five key segments within the vertical and their various trends, opportunities, and risks:

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Retail fintech VC deals down 48%, but outlook isn't gloomy

Retail fintech was a VC darling during the COVID-19 pandemic, seeing unprecedented growth and expansion. Two years later, deal activity has declined amid macro headwinds—yet opportunities remain.

In our inaugural Retail Fintech Report, PitchBook analyst Rudy Yang maps out key segments within the vertical and targets developing areas for investors:

VC deal value has declined almost 48% after a record 2021 but remains elevated compared to pre-2021 levels.

Exit activity is muted due to challenging market conditions, with VC exits down 57% year-over-year as of Q3 2022.

Advances in underwriting technology, the rise of embedded finance, and the continued proliferation of digital payments and banks continue to create key investment opportunities.

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Since yesterday, the PitchBook Platform added:

8

VC valuations

1782

People

626

Companies

5

Funds

See what our data software can do

Here are the latest quarterly research updates for the other tech verticals in our scope of coverage:

Thanks for reading! Feel free to email our research team any time with feedback, questions, or tips!

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Emerging Technology Research coverage The Daily Pitch four new verticals Clean energy investment two crypto markets Retail fintech deals Ecommerce VC market

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