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In today's Daily Pitch, you'll find:
- Our debut coverage of healthcare IT unpacks VC and PE trends and emerging opportunities in the vertical.
- How long will it take startups to grow into their old valuations? Try our valuation calculator.
- A look at the 10 biggest pools of capital that institutional investors have set aside for emerging fund managers.
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Healthcare IT's pain points
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VC and PE investment in healthcare IT plummeted in Q4 as cost inflation strained health systems, the funding market faltered and valuations were rocked. But despite the bumpy road ahead, healthcare IT presents a long-term opportunity to drive delivery efficiencies and care model innovation.
Our Q4 2022 Launch Report: Healthcare IT debuts our coverage of the vertical, giving a snapshot of the changing funding environment and of the light at the end of the bear market tunnel.
- Cumulative VC deal value in healthcare IT fell 61.7% in Q4 from the previous quarter to $451.3 million. PE investment in the vertical had a more muted drop-off, with a 46.2% decline in deal count compared to Q3 2022.
- The vertical encountered tough headwinds in 2022: Weakness in the provider end market led to difficult sell cycles, volatility in VC funding and a sluggish exit market tying up LP capital.
- But opportunities for innovators remain: We identify limited interoperability in healthcare data, antiquated technology systems and shifts in the care paradigm toward patient-centricity as three crucial entry points to watch.
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How long will it take to grow into 2021 valuations? Try our calculator
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| (Mara Potter/PitchBook News) |
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Startups are between a rock and a hard place. Revenue multiples—the math used to price tech companies—fell steeply last year. Now, revenue growth rates are declining too.
Our calculator shows how these factors make it much harder for startups to grow into their former valuations—and how much runway they need to avoid a down round. |
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How are female founders faring in the US VC ecosystem?
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While macroeconomic issues slowed funding, deal value for female founders in US VC reached $32.4 billion by the end of Q3 2022—more capital than any year prior to the record highs set in 2021, according to our latest All In: Female Founders in the US VC Ecosystem report. Join our webinar on March 7 to hear our expert speakers from J.P. Morgan, Apex, and Maveron discuss more data-driven insights on women in the VC and startup ecosystem. |
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VC funding for supply chain tech normalizes in push for resiliency
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Boosting resiliency has been the name of the game for the supply chain tech sector since pandemic 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 recent 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 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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8VC's $880M fund is a bellwether for Austin VC boom
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8VC managing partner Joe Lonsdale
(Brian Ach/Getty Images) |
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Austin-based 8VC's $880 million Fund V, which closed Wednesday, is Texas' fourth-biggest VC fund ever and the third-largest of the last decade, PitchBook data shows.
Despite Austin's increasing prominence as a tech hub, Texas-based VCs still lag behind their coastal counterparts in funds raised. But since 2020, the region's VCs have built significant fundraising momentum. |
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The 10 largest pools of institutional capital set aside for new fund managers
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| (Allan Wood Photography/Shutterstock) |
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After a year of steep declines in fundraising, many new and less-established managers are getting left behind as LPs become more cautious in their capital deployment.
In spite of the market headwinds, many LPs with new manager mandates are throwing a lifeline to fresh-faced GPs looking to raise their first fund. Using PitchBook data, we compiled the 10 US public pension plans and university endowments with the largest new and emerging manager mandates. |
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Borrowers turn to structured capital, PIK with debt costs on the rise
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| (nuchao/Shutterstock) |
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Stress is increasing among private credit debt issuers as they grapple with higher interest costs just as earnings may be slowing. At the same time, lenders are increasingly holding a line at the prospect of adding debt to a company's balance sheet. They may be open for credit amendments or waivers, but these are short-term fixes.
Enter preferred equity and holdco PIK (pay-in-kind) notes. Borrowers can use these deals to shore up capital structures as they look for ways to steady themselves in challenging operating environments while conserving cash. |
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How hype can help and hinder entrepreneurs. [The Economist]
One year later, not all Western companies have packed up and left Russia after its invasion of Ukraine. Some chose to stay, while others couldn't leave. [The New York Times]
Ocean shipping faces its biggest slump in years. [The Wall Street Journal] |
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Since yesterday, the PitchBook Platform added:
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21
VC valuations
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2073
People
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623
Companies
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33
Funds
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2016 Vintage Global Debt Funds
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Biotech startup Cargo Therapeutics has raised $200 million in a Series A led by Third Rock Ventures, RTW Investments and Perceptive Advisors' Perceptive Xontogeny Venture Fund.
Fertility clinic network Kindbody has raised $100 million in a round led by Perceptive Advisors.
Wunderkind, a digital marketing platform, has secured a $76 million Series C led by Neuberger Berman, TechCrunch reported.
Pennylane, a Sequoia-backed accounting startup, is planning to raise $50 million in a round led by DST Global, Insider reported.
Legal-tech software vendor SpotDraft has raised a $26 million Series A led by Premji Invest.
Customer relationship management platform Attio has secured a $23.5 million Series A led by Redpoint Ventures.
Hexa has raised a $20.5 million Series A from backers including Point72 Ventures, Samurai Incubate and Sarona Partners, according to reports. Hexa helps companies create 3D models of their products.
Qwak has raised $12 million from Bessemer Venture Partners. The startup offers machine learning engineering and data management tools.
Edurino, which offers a learning platform for kids, has raised a €10.5 million Series A led by DN Capital.
Zurich-based Simulands has secured €10 million from SHS Capital. The startup offers simulation-based medical training in the cardiovascular field.
Hospitality specialist Apaleo has extended its Series A to €9 million. The extension was led by Rockaway Capital and Serpentine Ventures.
Impossible Cloud, a Hamburg-based cloud storage solutions startup using Web3 technology, has raised €7 million in a round led by HV Capital and 1kx.
Legal-tech startup Henchman has raised $7 million in Series A led by Adjacent VC and Acton Capital.
AlbionVC and Eurazeo have led a $5 million seed round for forecasting analytics startup Ramp. |
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Don't miss our upcoming webinar
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A panel of speakers will discuss how women founders in the VC and startup ecosystem fared during ongoing market volatility—and provide forecasts for 2023. Key takeaways include:
- Trends in aggregate funding received by female-founded companies compared to all-female and all-male founding teams.
- A gender breakdown for decision-makers at VC firms and how this impacts deal activity for founders.
- Angel investment through unicorn status: how investment evolves throughout the company lifecycle.
Register now to secure your spot. |
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Blackstone, Sixth Street sell Kensington Mortgages
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Arsenal Capital exits healthcare packaging company
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Chequers Capital hands off Riri
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| Swiss engineering group Oerlikon has completed its acquisition of Riri, a Swiss zipper-maker backed by Chequers Capital. The deal was first announced in December last year. |
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RLH Equity sells Utegration
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QDNL Participations launches $16M fund
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| Amsterdam-based QDNL Participations has launched a €15 million (around $16 million) fund to back quantum technology startups. The vehicle will be used to target early-stage deals with investments of up to €1.5 million. |
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Macquarie mulls M&G acquisition
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| Macquarie Group is considering a takeover of UK-listed asset manager M&G in a deal worth over £5 billion (about $6 billion), Sky News reported. |
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"Most managers noted that the current fundraising market is more difficult than it has been in past quarters. However, given the track record and brand of these public managers, most continued to see strong capital inflow and ended 2022 with plenty of growth in AUM."
Source: PitchBook's Q4 2022 US Public PE Roundup |
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