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The Daily Pitch: VC

February 14, 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:

Despite the downturn, carbon tech startups secured nearly as much funding in 2022 as they did the year prior.

Our recent analyst note examines how patents impact startups.

We take a quantitative view of uncertainties facing investors in the private markets and evaluate what could change this year.

Today's Top Stories

Carbon and emissions tech defies downturn

After the record amounts of capital deployed in 2021, it seemed that there was nowhere to go but down, but a handful of sectors belied the trend, among them carbon and emissions tech.

Due to the Inflation Reduction Act and other government programs aimed at advancing private investment in the sector, as well as the war in Ukraine and companies' pledges to reduce emissions, carbon and emissions tech startups raised $13.8 billion in 2022—an only 2% decrease from the previous year's $14.1 billion.

Our latest Emerging Tech Research explores recent VC trends in carbon and emission tech, spotlights key players in the space, and highlights emerging opportunities in ocean carbon capture and biopolymers.

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When scrying a startup's future, try looking at patents

To measure a fledgling company's success, investors and other observers look at revenue and growth. But clever ideas—the startup's intellectual property—and the ways they're protected can also be a key predictor of what comes next.

Startups with patents and patent applications raise larger VC rounds on average, according to our recent analyst note examining our growing patent data collection. They also raise capital at higher valuations and achieve higher exit values.

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A message from Allvue Systems

5 private equity trends to watch in 2023

Despite a muddled market outlook that stands to impact deals and exits, the private equity landscape is still expected to have another booming year. With healthy fundraising and a quiet deal market on the horizon, several indicators are suggesting the market will see continued growth in 2023.

In its trends outlook piece, 5 Private Equity Trends to Watch in 2023, Allvue takes a closer look at the sector's trajectory for 2023—from fundraising and deal market trajectories to the dry powder and exit landscape—and breaks down the main trends PE managers should be prepared for in the new year.

Click here to continue reading and stay ahead of this year's trends.

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Recession risks increase pressure on buyouts, high-risk assets

(Ksw Photographer/Shutterstock)

Investors in the private markets face a range of uncertainties this year, from a possible recession to the prospect of more interest rate hikes by the Federal Reserve.

PitchBook's latest Quantitative Perspectives report evaluates how these unknowns could impact private market investments in the year ahead. We've gathered four key takeaways from the report.

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Software remains essential despite slowing growth

(Wasan Tita/Shutterstock)

Revenue growth at software companies is in decline due to a range of factors, from high inflation to the end of the pandemic demand surge. At the same time, the return of in-office work and travel have increased costs, further damaging profitability.

Given these challenges, Morningstar analysts favor investments in software companies with solid defensive positions and high switching costs. One silver lining is that software services are essential for business efficiency, an increasing priority across the corporate landscape.

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Recommended Reads

How venture capital will need to adapt in the face of a shifting geopolitical landscape. [Harvard Business Review]

A handful of large hedge funds that profited off the recent market volatility are guaranteeing huge payouts for traders before they even start. [The New York Times]

New tech that can screen for a range of dangerous microbes in a single test could be a game-changer for identifying infections. [The Wall Street Journal]

Since yesterday, the PitchBook Platform added:

27

VC valuations

2186

People

662

Companies

30

Funds

See what our data software can do

Quick Takes

	The Daily Benchmark
	2019 Vintage Global VC Funds
	Fundraising
	Summit Partners reels in $1.5B for Europe growth fund
	Nuveen, Churchill launch private capital fund

The Daily Benchmark

2019 Vintage Global VC Funds

Median IRR

35.03%

Top Quartile IRR

62.45%

1.36x

Median TVPI

Select top performers

Flexcap Fund I

Grayscale STRIVE Fund 2

Creandum V

*IRR: net of fees

82 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

VC Deals

Chinese electric vehicle company Zeekr has raised a $750 million Series A. Investors included Mobileye CEO Amnon Shashua and Contemporary Amperex.

Boxx has received a $14.4 million Series B led by Zurich Insurance Company. Last year, the insurtech startup acquired cybersecurity specialist Templarbit.

Surgical software company Cydar Medical has raised $11.5 million in a Series A led by Pembroke Venture Capital Trust and Downing.

Omnio has raised €9 million. The fintech company plans to merge with Nordiska and Swiss Bankers and go public within the next 12 months.

Fable Food Company has raised an $8.5 million Series A to create vegetarian meat from mushrooms. VC 3 Ventures led the round.

Israel's CaPow, which powers autonomous robots without batteries or stationary charging ports, has raised $7.5 million in a seed round led by IL Ventures.

Fondo, which offers tax preparation for startups, has raised $1.8 million in debt from Capchase and $1.2 million in equity from investors including Y Combinator and Liquid2 Ventures, Axios reported.

Kenya's bus, train and plane ticketing platform BuuPass has raised $1.3 million in pre-seed funding from Founders Factory Africa, FrontEnd Ventures, Adaverse and others, TechCrunch reported.

PE Deals

Israeli billionaire and top shareholder Teddy Sagi has made an offer to buy out Kape Technologies, boosting the London-listed company's shares by over 12% Monday morning, the Financial Times reported. The takeover bid values the company at about $1.5 billion.

CVC Capital Partners is looking to acquire a stake in Indonesia's Samator Indo Gas, Bloomberg reported. The stake, which could be as large as 30%, is said to be worth $150 million to $200 million.

In keeping with the private equity giant's interest in China's $3.8 trillion mutual fund industry, Warburg Pincus is expected to buy a stake in Zhong Ou Asset Management, Reuters reported.

KPS Capital Partners plans to buy UK-based luxury yacht builder Princess Yachts, Sky News reported.

Parthenon Capital has agreed to acquire Global Payments' gaming division, which will be renamed Pavilion Payments.

Fundraising

Summit Partners reels in $1.5B for Europe growth fund

Summit Partners has closed its fourth Europe-focused growth equity fund on €1.4 billion (about $1.5 billion). The vehicle will make majority and minority investments of between €20 million and €80 million.

View fund

View 942 investments »

Nuveen, Churchill launch private capital fund

Nuveen, the asset management arm of TIAA, and Churchill Asset Management have launched a fund to offer individual investors access to private capital opportunities in the US middle market. The vehicle has a portfolio of about $350 million.

View details

View 35 investments »

Chart of the Day

"The 2022 median seed pre-money valuation was $10.5 million and the Q4 figure was $11.0 million, demonstrating strong growth over the 2021 median of $9.0 million. At this stage, valuation is often a formula involving how much capital a startup requires and how much equity investors require. Hence, we expect to see the median pre-money valuation increase in response to an increase in the median deal size."

Source: Q4 2022 PitchBook-NVCA Venture Monitor

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PitchBook News - Carbon tech defies downturn

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