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The Daily Pitch: VC

March 2, 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:

PitchBook's Emerging Tech Indicator takes a look at where the world's most successful VCs are placing their bets.

Our latest Global Markets Snapshot breaks down one month of trends in the equity, debt and commodities markets.

A look at the average revenue decrease for the fintech, ecommerce, software and healthcare sectors in 2021 and 2022.

Today's Top Stories

Biotech, AI & ML lead the emerging tech pack

Tech moves at the speed of light, and PitchBook's Q4 2022 Emerging Tech Indicator is here to help you make sense of it all. Tracking the key deals, figures and trends, our indicator gives a full overview of what the world's most successful VC investors are betting will be the next big thing. Key takeaways include:

Our indicator tracked 130 deals worth $3.5 billion in Q4, a 26% decrease from the previous quarter's $4.8 billion and a 69.5% fall from Q1 2022's record $11.6 billion.

Biotech and AI and machine learning led the pack in terms of deal value, raising a combined $857.6 million.

Despite a crypto "winter," Web3 and DeFi startups continued to attract investor interest, with token exchange platform Uniswap's $165 million Series B standing out.

Nine deals of $100 million or more were tracked in Q4, a decline from the highs of the previous quarters, but still beating the historical average of five.

read the report

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How startup revenue growth is slowing across 4 sectors

(Zuzha/Shutterstock)

After years of favorable investments and a macroeconomic environment that led to increasingly higher valuations and faster revenue expansion, VC-backed companies now have to reckon with a double whammy of drastically falling prices and decreasing growth rates.

Data from Kruze Consulting, an accounting firm that advises startups, shows that revenue growth declined substantially in 2022 compared to 2021.

See the average revenue decrease for the fintech, ecommerce, software and healthcare sectors.

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In February, the world took two steps back in fight against inflation

As inflation in the Euro Area and the UK appeared to top out in February, the Consumer Price Index and Personal Consumption Expenditures reports showed even hotter inflation in the US.

These indications suggest the Federal Reserve will need to be even more aggressive to slow growth and tame services inflation. Economists are looking to a reopening Chinese economy—and its cash-rich consumers—to support global growth and counterbalance a lagging US economy.

Our Global Markets Snapshot breaks down one month of trends in the equity, debt, and commodities markets, tracking returns across a range of indexes and sectors. In this monthly digest, we provide the datasets that PitchBook's Institutional Research team is keeping an eye on as markets remain volatile.

read it now

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Revolut reveals first annual profit in long-delayed report

(Courtesy Revolut)

In a long-delayed financial report for 2021, challenger bank Revolut announced its first-ever annual net profit.

Increases in users and paid subscriptions as well as the crypto trading rush helped the London-based company's revenues to grow.

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Dealmaking jumps as PE drives wealth-management consolidation

(Andrii Yalanskyi/Shutterstock)

As the wealth management industry faces market headwinds and rising operating costs, the sector is seeing a record number of acquisitions as firms seek to consolidate and broaden their services.

Private equity is playing a significant role, as fund managers—which account for the lion's share of these transactions—look to roll up a fragmented market.

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The IPO drought could end soon—if these factors converge

(Jenna O'Malley/PitchBook News)

The IPO market remains dry, and a comeback to its pre-2022 glory will rely on a confluence of factors. Among them: a stabilized macroeconomic environment, more clarity on the direction of interest rates, greater alignment on pricing between buyers and sellers, and a company that leads the pack back onto the public exchanges.

When these factors converge, the return to public listings will likely be swift and explosive—when that may happen depends on who you ask.

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Recommended Reads

Phosphorus saved our way of life—and now threatens to end it. [The New Yorker]

Have reports of manufacturing's death been greatly exaggerated? [The Wall Street Journal]

Is the world finally cracking down on "greenwashing"? [The Atlantic]

Since yesterday, the PitchBook Platform added:

15

VC valuations

1855

People

628

Companies

11

Funds

See what our data software can do

Quick Takes

	The Daily Benchmark
	2017 Vintage North American Secondaries Funds
	People
	Venus Williams joins Topspin Consumer Partners
	Portfolio Companies
	ARM vetoes UK IPO
	Exit & IPOs
	BlackRock, Carlyle among lenders selling SMCP stake
	Sun looks to exit Scotch & Soda
	PSG and Verdane to exit Nomentia
	Fundraising
	Nexus closes $700M fund
	Northleaf locks down $675M
	High-Tech Gründerfonds scores $527M
	B Capital closes debut healthcare vehicle
	Venture Guides wraps up $215M
	Investors
	Lazard grows family office business with Truvvo deal

The Daily Benchmark

2017 Vintage North American Secondaries Funds

Median IRR

21.12%

Top Quartile IRR

26.10%

1.57x

Median TVPI

Select top performers

Northleaf Secondary Partners II

Secondary Overflow Fund III

Newbury Equity Partners IV

*IRR: net of fees

9 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

People

Venus Williams joins Topspin Consumer Partners

Tennis champion Venus Williams will be starting a new role as operating partner at Topspin Consumer Partners, a consumer-focused middle-market buyout firm. Williams will focus on bringing Topspin deals in the health, wellness, beauty and personal care industries.

View details

View 72 investments »

VC Deals

Climate-tech startup BlocPower has raised a more than $24 million Series B led by VoLo Earth Ventures as well as $130 million in debt financing led by Goldman Sachs.

Chroma Medicine, a biotech startup, has raised a $135 million Series B led by GV.

Canadian fintech company Equisoft has secured a $125 million investment from investors including Investissement Québec, Export Development Canada and Fondaction.

StudentFinance, Madrid-based startup offering financing for training and education, has raised €39 million in a round led by Iberis Capital and Smart Lenders Asset Management.

Elaia and Opera Tech Ventures have led a €35 million Series B2 for Paris-based SESAMm. The startup uses natural language processing to generate insights from documents for investment firms and corporations.

TandemAI, a drug discovery platform, has raised a $35 million Series A led by Qiming Venture Partners.

Healthtech startup Doctorly has secured a $10 million Series A from investors including Horizons Ventures and Well Health Technologies.

WNWN Food Labs, a maker of cocoa-free chocolate, has raised $5.6 million in a round led by PeakBridge.

PE Deals

Apollo Global Management has lined up financing and submitted a buyout bid for Arconic, The Wall Street Journal reported. The aerospace parts maker would command a price tag of roughly $2.6 billion.

Midstream energy company Enbridge has invested $80 million in Ara Partners-backed Divert, which received an additional $20 million from Ara. Enbridge also agreed to work with Divert to build $1 billion in infrastructure needed to convert food waste into renewable natural gas.

KKR has completed its acquisition of Hitachi Transport System for 7.2 billion Japanese yen (about $52 million). The company will be renamed Logisteed.

The Canada Pension Plan Investment Board has agreed to join IKAV's reported $4 billion purchase of Aera Energy, an oil and gas joint venture, from former owners Shell and ExxonMobil.

Ardian-backed European logistics and distribution company Staci has acquired Amware Fulfillment from Rotunda Capital Partners.

Wealth-management software provider BetaNXT, backed by Clearlake Capital and Motive Partners, has acquired Mediant Communications, which offers tools for investor communications.

Portfolio Companies

ARM vetoes UK IPO

SoftBank-backed chipmaker ARM is opting to not go public on the London Stock Exchange, Bloomberg reported. Instead, the company is looking to list on the New York Stock Exchange.

View details

View 26 competitors »

Exit & IPOs

BlackRock, Carlyle among lenders selling SMCP stake

BlackRock and The Carlyle Group are among a group of former bondholders launching a process to sell a 37% stake in French fashion house SMCP, paving the way for a full takeover. Glas, the lender representing the bondholders, acquired a 29% stake after the group's former Chinese owners defaulted on their debt.

View details

View 2 competitors »

Sun looks to exit Scotch & Soda

Sun European Partners is looking to exit Amsterdam-based fashion brand Scotch & Soda, Sky News reported. Sun acquired the business in 2011 through its former portfolio company Kellwood.

View details

View 58 competitors »

PSG and Verdane to exit Nomentia

PSG and Verdane have agreed to exit their stake in Finnish cash management software provider Nomentia to Inflexion. Inflexion is acquiring the majority stake via Inflexion Buyout Fund VI.

View details

View similar company »

Fundraising

Nexus closes $700M fund

Nexus Venture Partners has closed its seventh flagship fund on $700 million to invest in SaaS, AI, fintech and commerce companies in the US and India.

View fund

View 185 investments »

Northleaf locks down $675M

Northleaf Capital Partners has closed its latest PE fund, Northleaf Private Equity Investors VIII, on $675 million. The firm's eighth fund targets middle-market companies, including direct investments and secondary deals.

View fund

View 209 investments »

High-Tech Gründerfonds scores $527M

German VC firm High-Tech Gründerfonds has closed its fourth fund on €494 million (around $527 million). The vehicle will be used to target seed investments in areas including digital tech, industrial tech and life sciences.

View fund

View 680 investments »

B Capital closes debut healthcare vehicle

B Capital has closed its inaugural healthcare fund on $500 million to invest in biotech, digital health and healthcare startups.

View fund

View 149 investments »

Venture Guides wraps up $215M

VC firm Venture Guides, led by former co-managing partner at Bain Capital Ventures Ben Nye, has closed a $215 million fund, TechCrunch reported. The vehicle will target seed and Series A infrastructure software startups.

View fund

View 1 investments »

Investors

Lazard grows family office business with Truvvo deal

Lazard Asset Management has acquired family office investment manager Truvvo Partners, a firm with $3.8 billion in assets under management. Following the deal, Lazard combined its private client business with Truvvo, with the new entity christened Lazard Family Office Partners.

View details

View 57 investments »

Chart of the Day

"Given the downturn in markets, investors are chasing growth in what is becoming a no-growth horizon given the macroeconomic picture. PE growth/expansion funds offer this higher-risk, higher-growth, higher-reward opportunity to LPs."

Source: 2022 Annual European PE Breakdown

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latest Global Markets Snapshot startups revenue slowdown first annual profit Emerging Tech Indicator average revenue decrease The Daily Pitch

PitchBook News - Checking in on emerging tech

Key phrases

Older messages

IoT startups struggle as VC pulls back

Earnings illuminate strategy of PE firms

Crypto industry craves clarity

The IPO drought wants to end

VCs play the long game

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