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PitchBook News - When dry powder stays dry

Europe's movers and shakers of 2022; Stripe plots IPO, stock sale; Senken bags $7M+ for carbon offsets platform
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The Daily Pitch: VC
January 27, 2023
The Daily Pitch is powered by PitchBook’s industry-defining research and best-in-class data
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In today's Daily Pitch, you'll find:
  • Our newest analyst note breaks down the imbalance between how much capital startups want and how much VCs are actually offering.

  • While Blackstone's real estate funds weighed on its Q4 earnings, its PE portfolio held strong.

  • Many European PE players switched jobs in 2022, so we've highlighted some notable moves.
 
Today's Top Stories  
A case of chronic dry powder
There's a hiccup in the private markets that almost no one is talking about: the disconnect between the capital startups are seeking and the money VC firms are actually investing.

Our latest analyst note dives into this imbalance and explores what it means for valuations, deal terms and startups going forward. Key takeaways include:
  • Capital demand outpaced supply in some cases by over 145% in Q4 2022. Overall, more than twice as much capital was requested than supplied.

  • The PitchBook Dealmaking Indicator shows a sharp turn toward a more investor-friendly environment.

  • All venture stages are affected, but the late-stage VC market shows the greatest imbalance.
read it now
 
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Blackstone's earnings fall, but PE holdings show strength
Blackstone CEO and co-founder Stephen Schwarzman
(Alex Wong/Getty Images)
Blackstone reported a significant year-over-year decline in its earnings on Thursday after the asset manager struggled to sell investments in the fourth quarter of 2022.

The depreciation in the firm's two main real estate investments in Q4, coupled with slower realization activity, weighed on its earnings figures.

There is a silver lining to the lackluster quarterly results. The value of the firm's corporate private equity and private credit investments climbed in the last quarter.
read more
 
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Attractive equity valuations reassure European investors
The European Central Bank in Frankfurt, Germany (telesniuk/Shutterstock)
Inflation in Europe has ramped up to around 10% due to supply-chain bottlenecks, labor shortages and the war in Ukraine. That has spurred central banks to raise interest rates to 2% in the EU and 3% in the UK.

In a recent report, Morningstar analysts examine the mixed effects on equity markets in the current economic landscape. They investigate the challenges faced by companies focusing on commoditized goods as well as the opportunities for businesses in the travel, homebuilding, and shipping and logistics sectors.
read the report
 
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Movers and shakers of 2022: Top people moves in European PE
(Rawpixel.com/Shutterstock)
The PitchBook Platform recorded 137 senior departures from European private equity firms in 2022, with many executives either joining a new firm or starting their own.

We gathered highlights of notable industry players who sought out new career opportunities last year.
read more
 
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Private debt market braces for stormy seas
(Drew Sanders/PitchBook News)
The private debt market, itself the result of a global financial upheaval, potentially faces its biggest test yet amid 2023's uncertain economic outlook.

After nearly a decade of rapid growth, private debt could be in for a rude awakening as higher interest rates threaten companies' abilities to service their borrowing costs—which in turn will force investors to think twice about their private debt exposure.

Meanwhile, aggressive monetary tightening and the very real prospect of a global recession could also stifle the deal pipeline for alternative lenders, much as it has for private equity firms. Yet, investors are raising large amounts of capital for the strategy.
read more
 
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Recommended Reads
Can ChatGPT make a market-beating ETF? [Bloomberg]

Why the US' last washboard factory isn't ready to throw in the towel. [The Wall Street Journal]

Are institutional investors actually responsible for the housing crisis? [The Atlantic]
 
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Since yesterday, the PitchBook Platform added:
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People
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Companies
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Funds
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Quick Takes  
  The Daily Benchmark  
  2020 Vintage North American PE Funds  
  VC Deals  
  Pearl Health secures $75M  
  Angle Health lands $58M  
  Crux raises $50M  
  iLife nabs $17M  
  Method collects $16M  
  Senken bags $7.5M for CO2 platform  
  Exits & IPOs  
  Stripe plots IPO, stock sale  
 
 
The Daily Benchmark  
2020 Vintage North American PE Funds
Median IRR
24.05%
Top Quartile IRR
39.00%
1.24x
Median TVPI
Select top performers
SSC Partners II
Lindsay Goldberg V
Invicta Pilot Fund
*IRR: net of fees
95 Funds in Benchmark »
Check out the latest version of PitchBook Benchmarks
 
VC Deals  
Pearl Health secures $75M
Andreessen Horowitz and Viking Global Investors have led a $75 million Series B into healthtech startup Pearl Health. The company offers a platform for physicians and has raised $100 million in total.
View round
 
View similar company »
 
Angle Health lands $58M
Health insurance startup Angle Health has raised a $58 million Series A led by Portage, Axios reported. The company offers customizable insurance plans for small to medium-sized businesses.
View round
 
View similar company »
 
Crux raises $50M
Crux, a cloud-based data startup, has raised $50 million in venture funding led by Two Sigma and Goldman Sachs Asset Management. Crux works with clients like Google and AWS to offer access to secure data.
View round
 
View 41 competitors »
 
iLife nabs $17M
iLife, an insurance distribution platform provider, has raised a $17 million Series A led by Foundation Capital, Brewer Lane Ventures and Scor Ventures.
View round
 
View similar company »
 
Method collects $16M
Method, which offers a debt payment platform, has raised a $16 million Series A led by Andreessen Horowitz. Method has previously secured backing from Y Combinator and Leonis Capital.
View round
 
View 2 competitors »
 
Senken bags $7.5M for CO2 platform
Carbon offset credit trading platform Senken has secured a $7.5 million investment led by Obvious Ventures and joined by Kraken Ventures and Climate Capital.
View round
 
View similar company »
 
 
Don't miss our upcoming webinar
Join PitchBook in examining the EU's new Sustainable Financial Disclosure Regulation, which will require private market investors to disclose ESG performance starting in June 2023. A panel of ESG experts will provide an overview of the requirements and how they will affect investors and portfolio companies. Key topics include:
  • What is SFDR (SDR-, UK- and their related disclosure requirements), and who will be most affected by its conditions?

  • What are the differences between SFDR Articles 6, 8 and 9? What are the implications of nonadherence and avenues of collecting data to become compliant?

  • What is the burden on portfolio companies? How long is the process of becoming compliant?
Register now to secure your spot.
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Exits & IPOs  
Stripe plots IPO, stock sale
Within the next year, Stripe is planning to either go public or allow its employees to sell their shares in a private-market transaction, according to reports. The payments processing startup has hired JP Morgan and Goldman Sachs to assess investor interest.
View details
 
View 104 competitors »
 
 
Chart of the Day  
"Cross-border M&A between Europe and North America has always been active in both directions, and as recently as 2016, it favored the US as a recipient of net flows. 2022 was a different story. M&A involving North American acquirers of European companies totaled $315.3 billion for the year, or 21.2% of all European M&A value."

Source: PitchBook's 2022 Annual Global M&A Report
 
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Who's in the newsletter today?
Investors
Andreessen Horowitz
Brewer Lane Ventures
Climate Capital
Foundation Capital
Goldman Sachs Asset Management
Google
Kraken Ventures
Leonis Capital
Obvious Ventures
Portage
Scor Ventures
Two Sigma
Viking Global Investors
Y Combinator
Companies
AWS
Angle Health
Crux
Method
Pearl Health
Senken
Stripe
iLife
Service Providers
Goldman Sachs
JP Morgan
 
 
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M&A marches on

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