PitchBook News - What's behind VC's dizzying trends?

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The Daily Pitch: VC

January 12, 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:

The latest PitchBook-NVCA Venture Monitor dives into the data behind VC's dizzying trends.

Company failure rate was extremely low during the last boom cycle, but VCs expect more startups on the chopping block this year.

Blue Owl Capital is betting big on GP stakes with its latest fund.

Today's Top Stories

VCs say goodbye to all that for Q4 2022

For VC in 2022, it was the best of times, and it was the worst of times. Momentum from the 2021 highs carried through many areas of the venture market, even as figures faded throughout the year. While fundraising reached record highs, nearly 75% of the commitments were closed in Q1 and Q2. Fourth quarter deal count was roughly 25% lower than Q1, yet it remains higher than any quarter prior to the 2021 mania.

The latest PitchBook-NVCA Venture Monitor, sponsored by Insperity, J.P. Morgan and Dentons, details the data behind these dizzying trends:

Q4 exit activity topped off at $5.2 billion, the lowest quarterly total in more than a decade, capping off a staggering 90.5% decline in annual exit value.

Fundraising reached annual highs, exceeding $160 billion, despite a lull at the end of 2022.

Early- and late-stage deal activity both continued their slides in Q4, while venture debt remained high.

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Startup life expectancy expected to fall

(ShutterOK/Shutterstock)

Company failure rate was extremely low during the last boom cycle. But investors expect that to change this year, in a big way.

High-profile shutdowns in the crypto sector could be a sign of things to come across the tech landscape, investors say. VCs are getting stingier with existing funds and are unlikely to support weak portfolio companies.

Recommended Reads

Why laid-off tech workers are getting flooded with fake job offers. [The Wall Street Journal]

How Germany became Europe's leading Big Tech trust buster. [Financial Times]

With rising sea levels and extreme weather events, the Global North needs to prepare for mass climate migration. [Wired]

Since yesterday, the PitchBook Platform added:

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VC valuations

2087

People

671

Companies

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Funds

See what our data software can do

Quick Takes

	The Daily Benchmark
	2020 Vintage US PE Funds
	VC Deals
	DeepL soars to $1B valuation
	Driverless vehicle startup Oxbotica bags $140M
	40Seas grabs $111M
	Hack the Box nabs $55M
	Peppy collects $45M
	Inbenta lands $40M
	Hystar raises $26M for green hydrogen
	Telesair closes $22M round
	Portfolio Companies
	Flexport cutting 20% of workforce
	Fundraising
	Venom, Iceberg launch $1B Web3 fund

The Daily Benchmark

2020 Vintage US PE Funds

Median IRR

23.92%

Top Quartile IRR

37.97%

1.24x

Median TVPI

Select top performers

SSC Partners II

Lindsay Goldberg V

Invicta Pilot Fund

*IRR: net of fees

93 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

VC Deals

DeepL soars to $1B valuation

AI-powered translation startup DeepL has raised an undisclosed amount of funding at a more than $1 billion valuation, TechCrunch reported. IVP led the round for the German company.

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Driverless vehicle startup Oxbotica bags $140M

Oxbotica, a UK-based developer of autonomous vehicle software, has raised $140 million. Investors in the Series C include Tencent, Kiko Ventures and ENEOS Innovation Partners.

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View 10 competitors »

40Seas grabs $111M

Israeli fintech startup 40Seas, which focuses on cross-border trade financing, has raised $111 million, composed of an $11 million seed round led by Team8 and a $100 million credit facility from Zim Integrated Shipping Services.

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Hack the Box nabs $55M

UK-based Hack the Box has secured $55 million in a round led by The Carlyle Group. The startup offers a cybersecurity training and upskilling platform for individuals, companies and universities.

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Peppy collects $45M

AlbionVC has led a $45 million Series B for London-based Peppy. The startup offers employee healthcare benefits in areas including menopause, fertility, pregnancy and men's health.

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Inbenta lands $40M

Customer support AI chatbot startup Inbenta has closed a $40 million funding round led by Tritium Partners. The company counts DocuSign, LG and Skyscanner among its clients, and it plans to use its funding to hire more employees.

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Hystar raises $26M for green hydrogen

Hystar, which specializes in developing hydrogen from renewable technology, has closed a $26 million Series B. AP Ventures and Mitsubishi co-led the round for the Norwegian company.

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Telesair closes $22M round

Respiratory care startup Telesair has closed a $22 million Series A led by Pasaca Capital.

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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

Flexport cutting 20% of workforce

Supply chain startup Flexport is cutting 20% of its staff, Insider reported. The Seattle-based company, valued at $8 billion, is led by former Amazon executive Dave Clark and founder Ryan Petersen.

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Fundraising

Venom, Iceberg launch $1B Web3 fund

Venom Foundation and Iceberg Capital have partnered to launch a $1 billion Venom Ventures Fund to invest in Web3 startups, TechCrunch reported. Venom Foundation is a blockchain regulated by the Abu Dhabi Global Market.

Chart of the Day

"This combined total of 664 newly listed middle-market companies may well become a new area of focus going forward as the PE take-private machine re-tools and re-directs. ... Although many are high quality, they now lack the sponsorship and market cap to survive in public markets. Look for these companies to populate the ranks of take-privates, and for the buyout pendulum to swing back in favor of the middle-market segment."

Source: PitchBook's Q3 2022 US PE Middle Market Report

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latest PitchBookNVCA Venture Monitor Startup life expectancy AI drug discovery Company failure rate last boom cycle Blue Owl Capital The Daily Pitch

PitchBook News - What's behind VC's dizzying trends?

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