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Why is VC dry powder still piling up?; mobility tech hits the headlines; primary care M&A on the horizon; tracking Europe's 'soonicorns'
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The Daily Pitch: VC
January 10, 2023
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 PitchBook Benchmarks, updated through Q2 2022, provide data for closed-end fund returns across strategies and vintage years.

  • CVS has invested $100 million in Carbon Health—is yet more primary care M&A in the offing?

  • Here's why VC firms' piles of cash continued to grow—even as dry powder fell across other private investment strategies.
Today's Top Stories  
PitchBook Benchmarks for PE, VC and more
As capital flowed into alternative assets over the last decade, the global private markets surged and fund strategies expanded in kind. But the last 12 months have been a difficult time for markets, and the opaque nature of private capital presents many questions on how funds are performing. Now more than ever, allocators need transparent benchmarks they can trust.

That's where PitchBook Benchmarks come in—providing a detailed snapshot on the latest data for closed-end fund returns across strategies and vintage years. The new edition is now available, updated through Q2 2022 with preliminary data for Q3. It features downloadable XLS tables, data visualizations and PDFs that break down the numbers by strategy and geography.
see the data
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CVS invests $100M in Carbon Health. Is more primary care M&A in the offing?
(Courtesy of Carbon Health)
CVS failed to buy OneMedical before Amazon scooped it up. Now the drugstore giant is forging a partnership with Carbon Health, which also offers tech-enabled primary health services.

Here's why the deal may eventually lead to a strategic acquisition.

In other healthcare news...

PitchBook senior healthcare analyst Rebecca Springer is on the ground at the JP Morgan's healthcare conference in San Francisco. She reports that The Aspen Group has ambitions to enter the primary care space.

The platform could one day compete with the likes of CVS Health and Walmart in retail primary care, Springer says. Its advantage: organic growth fueled by free cash flow and strength in recruiting young providers.

The group, backed by Leonard Green, is quietly building consumer-focused brands in a growing number of categories. In addition to its core dentistry business and more recent aesthetics and veterinary plays, Aspen acquired WellNow urgent care in 2016.
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A message from Citizens  
What's driving middle-market growth in 2023?
As shown in the Citizens 2023 M&A Outlook, its annual survey of decision-makers across 400 U.S. middle-market businesses and PE firms, nearly two-thirds of companies expect M&A will be their primary growth engine this year. And while economic uncertainties are grabbing headlines, over 90% of companies say their 2023 performance will exceed or match their 2022 results.

Access the 2023 M&A Outlook to discover:
  • Which sectors enjoy the brightest outlooks
  • Where companies and PE firms' views diverge
  • Buyers' top reasons for making an acquisition in 2023
Explore the Citizens 2023 M&A Outlook
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Tracking mobility tech's bumpy Q4 on the public markets
Mobility tech pulled off a rocky finish to 2022: Ford and Volkswagen pulled the plug on a multibillion-dollar investment in Argo.AI, Toyota's CEO shared his doubts about an EV-only future, and Tesla stock was none the better for Elon Musk's ongoing stint at Twitter.

So, how did all these headlines impact investor sentiment? Check out our Q4 2022 Mobility Tech Public Company Valuation Guide to see the latest data on stock performance, revenue forecasts and market caps of key publicly traded companies across sectors including ridehailing, autonomous driving and electric vehicles.
read it now
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Why is VC dry powder still piling up?
VC firms continued to accumulate a growing pile of cash as of the end of Q3 last year, while the dry powder for other private asset markets—including private equity, private credit and secondaries—declined, according to PitchBook data.

The heavy presence of nontraditional investors in venture deals has contributed to the record stockpile of undeployed capital held by VC investors. At the same time, strong fundraising in the first half of 2022 also added to VC firms' war chests.
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Europe's 'soonicorns': Who will be next to reach a €1B valuation?
Unicorn creation in Europe is expected to slow this year as uncertainty remains in the venture market.

Nevertheless, with so much dry powder that needs to be put to work, VCs will still be making big bets on startups. Take a look at some of the companies that could join Europe's unicorn herd in 2023.
see the list
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Recommended Reads
The "failure resume": How some VCs are broadcasting their biggest mistakes. [The Wall Street Journal]

Is it time to teach AI how to be forgetful? [Wired]

For more than a decade, experts have debated whether value investing still works—and it looks like the textbooks were right all along. [Institutional Investor]
Since yesterday, the PitchBook Platform added:
VC valuations
See what our data software can do
Quick Takes  
  The Daily Benchmark  
  2018 Vintage European PE Funds  
  VC Deals  
  Enpal reaches $2.4B valuation  
  SoniVie pulls in $60M  
  Rapid Silicon closes first tranche of $30M Series A  
  Telepsychiatry specialist collects $25M  
  Worlds brings supply chain into the metaverse with $21.2M round  
  Madrona invests $7.5M in XetHub  
  Portfolio Companies  
  Britishvolt explores sale of majority stake  
The Daily Benchmark  
2018 Vintage European PE Funds
Median IRR
Top Quartile IRR
Median TVPI
Select top performers
INVL Special Opportunities Fund
Westbridge II
*IRR: net of fees
30 Funds in Benchmark »
Check out the latest version of PitchBook Benchmarks
VC Deals  
Enpal reaches $2.4B valuation
Germany-based residential solar company Enpal has raised roughly $230 million in equity in a Series D led by TPG, according to reports. Other new investors include Westly Group and Activate Capital Partners. The deal values Enpal at roughly $2.35 billion.
View round
View 2 competitors »
SoniVie pulls in $60M
Israel's SoniVie has raised a $60 million Series C led by Andera Partners for its ultrasound-based hypertension treatment.
View round
View similar company »
Rapid Silicon closes first tranche of $30M Series A
Rapid Silicon, which produces customizable AI-enabled semiconductors based on open-source technology, has raised $15 million as part of a Series A, with an additional $15 million planned for later in Q1. Investors including Cambium Capital and ChengWei Capital participated in the first close.
View round
View similar company »
Telepsychiatry specialist collects $25M
Virtual psychiatry and therapy provider Array Behavioral Care has raised $25 million in a round led by CVS Health.
View round
View 4 competitors »
Worlds brings supply chain into the metaverse with $21.2M round
Worlds Enterprises has raised a $21.2 million Series A1 led by Moneta Ventures. Worlds' metaverse platform is intended to help supply chain companies measure and analyze operations.
View details
View 5 competitors »
Madrona invests $7.5M in XetHub
XetHub has raised a $7.5 million seed round from Madrona. The company's platform allows developers to store and work with large datasets alongside their code repositories.
View details
View 253 investments »
PitchBook webinar: Emerging technology outlook
Join us for a webinar examining what lies ahead for emerging tech in 2023. From the fall of FTX to the rise of climate-tech investments, our analysts will dive into the findings from our recent analyst note about the industry and technology outlook for 2023, including the current trends and events that will affect spaces like crypto, AI, healthcare and climate tech. Key topics include:
  • What emergent properties are likely to develop from continued innovation in foundational generative AI models.

  • How the Inflation Reduction Act may be fueling an increase in climate-tech investments.

  • What 2023 holds for the private market healthcare ecosystem, including the wider adoption of telehealth and the implications of lowering genomic sequencing costs on precision medicine.
Register now to secure your spot.
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Portfolio Companies  
Britishvolt explores sale of majority stake
Britishvolt is in talks with a consortium of unnamed investors to sell a majority stake, according to reports. The electric vehicle battery maker, which is based in the UK, is backed by investors including commodities trader Glencore, Covalis Capital and family office Cathexis Holdings.
View details
View 9 competitors »
Chart of the Day  
"Once eschewed by investors because of low fee-for-service reimbursement, primary care—that is, senior primary care—has become the site of a turf war among payviders, retailers, and PE-backed platforms due to the high margins that MA contracts can generate. PE investors must carefully form geographic and service line strategies and weigh elevated entrance multiples against return prospects and long-term trends."

Source: PitchBook's Q3 2022 Healthcare Services Report
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