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The Daily Pitch: VC

February 15, 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:

VC funding for supply chain tech kept ratcheting down in Q4 2022 to pre-pandemic levels, according to our Emerging Tech Research.

Learn about the challenges facing LGBTQ+ startup founders—and how investors can support them.

Our 2022 Annual US VC Valuations Report examines how startups made some notable wins in a tough market.

Today's Top Stories

VC funding for supply chain tech normalizes in push for resiliency

Boosting resiliency has been the name of the game for the supply chain tech sector since COVID-19 restrictions hobbled the global marketplace. With disruptions such as Russia's invasion of Ukraine continuing to test improvements to the supply chain, customers seek cheaper solutions and even greater flexibility.

Our latest Emerging Tech Research update measures VC activity in Q4 2022 and notes freight tech and technology for finance and payments as two areas of opportunity. Key takeaways include:

Deal activity continued cooling to pre-pandemic levels on a year-over-year basis.

Q4 deal count declined slightly compared to Q3, yet deal value increased by 28.2% due to a few standout larger deals.

Freight tech led in deal value gains for the quarter, with rounds for Einride and Volta Trucks leading the charge.

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US startup valuations remained high in 2022, but trend isn't a friend

Despite it all—a vulnerable market in flux, an IPO freeze and rising geopolitical tensions—valuations for US-based startups remain strong. Yet it does depend on where you look, and the positive trend may soon change. Records were broken in 2022, both good and otherwise.

Our 2022 Annual US VC Valuations Report, sponsored by Morgan Stanley at Work and Reitler, has all the key figures and charts to make sense of the year. Key takeaways include:

Median seed valuations grew by 16.7% to $10.5 million, the highest annual value ever recorded by PitchBook.

Exits were hit by a freeze in IPOs, driven by unstable market conditions, which leaves a critical off-ramp for startups now closed. Public exit valuations dropped 32%, with median and average valuations falling to their lowest point in five years.

Accordingly, startups in the venture growth stage also suffered a decline in valuations, dropping 17% from last year—though the bottom may not have fallen out yet, as valuations remain high.

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A message from Orrick

VC-backed life sciences companies fought market volatility in 2022

Q4 rounded out a volatile year for life sciences venture capital activity, with deal value dropping more than 20% from 2021, though activity in the industry remains elevated compared to its pre-COVID years. Early-stage companies fared better than their late-stage counterparts across several metrics, including median pre-money valuation growth and median deal sizes. Orrick's Life Sciences Snapshot offers detailed analysis of these trends and an in-depth roundtable discussion surrounding the growth of mental health offerings in the industry.

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Investor: LGBTQ+ startup founders need more VC support

(Javier Zayas Photography/Getty Images)

Roughly three-quarters of LGBTQ+ startup founders feel the need to hide their sexual orientation or gender identity from venture capital investors, according to a survey from UK-based investor network Proud Ventures.

We spoke to co-author and Founders Factory investor Edward Kandel about the challenges LGBTQ+ founders face—not just in the UK, but in the wider VC community—and what investors can do to support and work with them.

Recommended Reads

Startup workers looking to cash in their stock options are being forced to make tough choices as the slump in public markets leaves shares worth far less. [The Wall Street Journal]

A rising awareness that balloons are everywhere in our skies. [The New York Times]

Institutional investors are increasingly interested in private credit—and managers are taking note. [Institutional Investor]

Since yesterday, the PitchBook Platform added:

25

VC valuations

2125

People

628

Companies

20

Funds

See what our data software can do

Quick Takes

	The Daily Benchmark
	2018 Vintage US PE Funds
	Fundraising
	Bain Capital closes $2.4B tech fund
	Newly founded Curie.Bio wraps up $500M+
	Phenomenal Ventures debuts with $6M
	EIB launches tech champions fund
	Ex-PE head for Joe Tsai's family office starts fund
	Investors
	GIC to scale back China investments
	Apollo joins in purchase of loans from Morrisons acquisition

The Daily Benchmark

2018 Vintage US PE Funds

Median IRR

28.29%

Top Quartile IRR

39.59%

1.58x

Median TVPI

Select top performers

SSC Partners I

Oaktree Special Situations Fund II

Audax Private Equity Fund VI

*IRR: net of fees

101 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

VC Deals

Juniper Square, a software company targeting private market managers, has secured a $133 million investment led by Owl Rock.

Lightspeed and Sequoia Southeast Asia have led a $100 million Series C for Singapore's Aspire, which offers a finance management platform for businesses.

Switzerland's Taurus, which offers a digital asset management platform, has raised a $65 million Series B led by Credit Suisse.

Biotech startup Checkerspot has raised a $55 million Series C led by ArrowMark Partners.

MDI Health has secured a $20 million Series A led by Intel Capital. The company's platform is used by clinicians in comprehensive medication reviews.

London-based Landytech has secured $12 million in a Series B led by Aquiline Technology Growth.

Dermatology specialist Skin + Me has raised a £10 million Series B led by Octopus Ventures.

Irish jewelry brand Chupi has raised €3.75 million to aid its international growth. The investment came from Business Venture Partners, Abbey Finance and Permanent TSB.

PE Deals

Fintech software company Finastra may sell off its universal banking operations for a sum of $7 billion, Reuters reported. Vista Equity Partners acquired London-based Finastra in 2012.

Paramount Global is exploring a sale of publisher Simon & Schuster for a valuation between $2 billion and $2.5 billion, Reuters reported. Paramount scrapped a $2.2 billion sale of Simon & Schuster to Penguin Random House in November.

Investcorp has invested in insurtech company InsuranceDekho. The firm is part of a consortium investing $150 million in the Indian business.

Core Industrial Partners has acquired Gem Manufacturing, which provides metal components and mechanical assemblies.

Middle-market PE firm Pharos Capital has sold Motion PT Group, a physical, occupational and speech therapy practice, to Confluent Health.

Blue Sage Capital has closed on its sale of Magnum Systems to 3 Rivers Capital. Blue Sage first invested in Magnum, a packaging systems manufacturer, in 2016.

PE firm Yellow Wood Partners has agreed to acquire Suave, Unilever's beauty and personal care brand in North America.

Fundraising

Bain Capital closes $2.4B tech fund

Bain Capital has raised $2.4 billion for its second tech opportunities fund, nearly double the size of the vehicle's $1.3 billion predecessor, according to reports.

View details

View 1,060 investments »

Newly founded Curie.Bio wraps up $500M+

Curie.Bio, a VC firm focused on biotech startups, has launched with two funds totaling more than $500 million for seed- and early-stage companies.

View fund

View 1 investments »

Phenomenal Ventures debuts with $6M

Meena Harris, the niece of Vice President Kamala Harris, has launched Phenomenal Ventures with a $6 million venture fund to invest in fintech and ecommerce startups, TechCrunch reported.

View fund

View 2 investments »

EIB launches tech champions fund

The European Investment Bank has launched a €3.75 billion (about $4.03 billion) fund to invest in late-stage VC funds. The European Tech Champions Initiative will invest in 10 to 15 VC funds of over €1 billion.

View details

View 100 investments »

Ex-PE head for Joe Tsai's family office starts fund

Danny Lee, a former PE manager for the family office of Alibaba co-founder Joe Tsai, is looking to raise around $200 million for his own fund, Bloomberg reported. VCA Capital will target high net worth individuals looking to diversify their holdings.

Investors

GIC to scale back China investments

Singapore's GIC is to scale back its China investments, the Financial Times reported. It is thought this includes China-focused private equity and venture capital funds as well as direct investment into Chinese companies.

View details

View 1,063 investments »

Apollo joins in purchase of loans from Morrisons acquisition

Apollo Global Management is part of a group of investors buying up €500 million (about $538 million) in discounted loans from the Clayton, Dubilier & Rice acquisition of UK supermarket chain Morrisons, Bloomberg reported.

View details

View 784 investments »

Chart of the Day

Source: PitchBook's 2022 Annual US VC Valuations Report

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PitchBook News - Supply chain tech extends cooldown

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