PitchBook News - Have VCs tempered tech expectations?

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The Daily Pitch: VC

May 1, 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:

Our survey of VC tech investors shows how the industry-rattling events of March may have changed their plans moving forward.

Our latest analyst note explores how synthetic biology startups are revolutionizing agriculture.

Our list of the most active VC investors in the semiconductor industry.

Today's Top Stories

Survey: Have recent disruptions changed VC investors' expectations?

As March stormed in with a roar, the venture capital industry experienced significant events that left enduring, untamable impacts. From ChatGPT's evolution from a novelty to a disruptor raking in serious VC dollars, to the collapse of Silicon Valley Bank—the month shook the already strained funding environment. So, how were VC investors feeling during this hectic time?

In March, we conducted an Emerging Tech Research survey of 58 VC firm insiders on technology, fundraising and more.

The VC community expects even more innovation and growth from AI over the next 12 months.

The crash of tech stocks in 2022 left mixed impressions: Respondents were evenly split on how the "tech wreck" affected technological development.

VC funding for tech startups is expected to decrease, but many investors are forging ahead with their planned fundraising, even after the banking crisis.

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Synthetic bio is a game changer for agtech

Modifying a plant's genetic code sounds like the experiment of a mad scientist, but it could in fact be the key that unlocks the future of farming. That's according to our latest analyst note, which explains how synbio startups are revolutionizing the agriculture industry.

Decreasing crop yields and global food shortages are major crises for farmers, but advances in synthetic biotechnology could reverse those trends by developing new plant varietals, tackling climate change, boosting soil health and cleaning up contaminated fields.

However, it won't be an easy ride: Public companies in the vertical have recorded lackluster revenue, stock performance has suffered, and there's been a string of M&A and buyout activity.

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Chinese VCs lead list of busiest semiconductor investors

(Joey Schaffer/PitchBook News)

The US has launched unprecedented investment into the semiconductor industry, hoping to catapult itself to the forefront of critical technology. But in our list of the most active VC investors in the space, the majority are based in China.

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As more businesses look to diversify their supply chains and bring production closer to the US, firms and the companies they own are looking to Mexico. [The Wall Street Journal]

Is mining set for a new wave of mega-mergers? [The Economist]

Since yesterday, the PitchBook Platform added:

1

VC valuations

200

People

90

Companies

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The Daily Benchmark:
2012 Vintage Global VC Funds with more than $250M

Median IRR

17.89%

Top Quartile IRR

30.70%

1.21x

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Emergence Capital Partners III

Flagship Ventures Fund IV

Index Ventures VI

*IRR: net of fees

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People

COO Daphne Chang and partners Jess Verrilli and John Lyman left GV, Alphabet's venture arm, in April, Axios reported. Verrilli is launching Adverb Ventures, which is raising up to $75 million for its first fund.

VC Deals

TheGuarantors, which offers insurance products for renters and landlords, has secured a $35 million growth investment from CIBC Innovation Banking.

Sequoia has led a $21 million Series A for Harvey, a generative AI startup focused on the legal market. OpenAI Startup Fund also joined, among others.

E-bike operator HumanForest has raised a £12 million Series A, comprising a £5 million project finance facility from Triodos Bank UK and £7 million in equity.

Barcelona-based SaaS startup Taclia has raised €6.2 million in a round led by Cusp Capital and Stage 2 Capital.

Centuro Global has raised €3.7 million in a round led by Mercia. Centuro's platform helps companies expand overseas.

Lasso MD, a marketing startup for private healthcare practices, has secured a $2 million investment from Trestle Partners.

Australia's Melodie, which offers a music licensing platform, has raised A$1 million (about $661,300) at a $15 million valuation.

PitchBook webinar: What is the future of VC exits?

Today's VC market is one of unprecedented company data and investment options. These have proven to both help and hinder investors. Despite enabling a greater range of strategies and more market awareness, the volume of information to process has greatly complicated deal sourcing.

A panel of speakers from PitchBook's product and analyst teams will share how VC investors can succeed in the current market and what tools can guide them to the best deals. Key topics include:

Learn the current trends of the exit market and what might come in 2023.

Understand how PitchBook is creating tools that help our users win.

Learn how the PitchBook VC Exit Predictor can make market research and deal sourcing more efficient.

Register now to secure your spot.

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PE Deals

General Atlantic has agreed to acquire a majority stake in Tripleseat, Reuters reported. Vista Equity Partners will exit most of its existing stake as part of the deal, which values the event management software provider at about $500 million.

Leonard Green & Partners has agreed to make a minority investment in Hub International, an insurance brokerage valued at $23 billion.

AEA Growth has agreed to make a strategic investment in American Oncology Network, which supports community-based oncology practices.

Livingbridge has invested in Ireland's T-Pro, which provides AI-powered speech technology to the healthcare sector.

Argosy Private Equity has acquired Burco, a manufacturer and supplier of mirror glass. The firm partnered with Stone River Capital Partners.

Exit & IPOs

Singapore's GIC has agreed to buy a portfolio of six logistics assets in Japan from Blackstone for over $800 million. The deal consists of 4 million square feet of warehouse space.

Fundraising

Genstar Capital has closed its Fund XI on roughly $12.6 billion. The firm primarily invests in North American middle-market companies.

Horizon Capital has closed its Growth Fund IV on $254 million. The vehicle will back tech- and export-oriented companies in Ukraine and Moldova.

Coalesce Capital, a PE firm led by Stephanie Geveda, previously head of the business services group at Warburg Pincus, is raising for its first fund, according to an SEC filing.

Investors

Ares Management reported an after-tax realized income of $232 million in Q1 2023 in its earnings call Friday. Its profit margins received a boost from management fees and other fee revenue, which jumped 26% year-over-year.

Corporate M&A

London-listed broker Numis has accepted an all-cash offer from Deutsche Bank for its business. The deal values the company at £410 million.

Chart of the Day

"The earlier the financing stage, the harder it was for dealmaking in 2022 ... The rise in nontraditional investor participation, as outlined previously, has created certain disparities within the funding life of a startup, as the sheer size of nontraditional investors means they tend to invest in the later stages of a startup."

Source: PitchBook's 2023 Nordic Private Capital Breakdown

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PitchBook News - Have VCs tempered tech expectations?

Older messages

Private real estate's bifurcation

Who wants to buy a unicorn?

B2B fintech's Q1 boost

M&A shops the discount rack

VC dealmaking decline levels off

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