Away joins list of struggling DTC startups

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The Daily Pitch: VC

August 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:

Public business-development companies keep earnings up in the sluggish venture debt market

Away joins the ranks of struggling direct-to-consumer startups

Europe's VC valuations fall enough to bring down the median late-stage valuation

PE hasn't quenched its thirst for European beverage companies

Today's Top Stories

Exclusive: Trendy luggage brand Away quietly laid off CCO, 21 others

(Jenna O'Malley/PitchBook News)

Away, a direct-to-consumer luggage brand that has raised more than $200 million in venture capital, quietly laid off 22 employees in May, including its chief commercial officer, according to two people familiar with the layoffs.

The staff cuts, which amount to a roughly 8% reduction in Away's corporate workforce, haven't been previously reported.

Even before the current downturn in the venture-backed ecosystem, so-called DTC companies had been struggling to find a path to profitability as digital advertising costs rise and the market becomes more saturated.

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Public BDCs drive strong earnings in rough venture debt market

Earnings for the five public business-development companies that deal in venture debt are thriving due to increasing interest rates. Resilience comes from their ability to pass those costs onto borrowers through the floating rate structure of their loans. Still, the long-term strategy for maintaining the credit quality of portfolios is to support the startups struggling to maintain a runway.

Our latest analyst note explores how public BDCs are managing in the wake of Silicon Valley Bank's collapse and how the venture debt market may remain lethargic for a time.

read it now

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A message from Ansarada

Corporate development in a box: One platform for buy- & sell-side activities

Treating each deal as a standalone is costing corporate development teams thousands. Fragmented processes create version control issues, audit gaps, and subpar target experiences.

In a volatile market, reliable data is critical. Corporate development teams, under mounting pressures and wider due diligence, need to centralize and standardize deals for clarity, efficiency, and security.

The upside: manual and repetitive processes can be scaled using technology.

Ansarada Deals is a total transaction management platform that brings together all the tools and templates needed for streamlined engagement and seamless deals. Digitize and standardize processes across the deal lifecycle for automation and replication at scale. Discover how modern corporate development teams optimize deals, enhance closures, and foster growth with Ansarada Deals as their deal technology partner.

Book a demo

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In Europe, median VC valuation loses grip as market weighs down further

Europe's median late-stage valuation has fallen in 2023 from last year's peak—the first decrease in nearly a decade. Only angel and seed valuations continue to show resilience in the downturn, due to being the furthest removed from public markets. The Q2 2023 European VC Valuations Report explores how valuations have struggled in an increasingly challenging market across stages, geographies and sectors.

Venture growth fell the most severely in both median deal value and valuations.

The proportion of down rounds continued to increase, reaching 26.2% in Q2.

Deal activity among European unicorns remains subdued.

read it now

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Introducing PitchBook's manager performance scoring

Evaluating a fund manager's track record is a particularly opaque process for LPs. Typical benchmarking metrics can be too narrow—assessing individual funds through the broad strokes of IRR quartiles—or too wide—scrutinizing a manager's overall performance regardless of asset class.

To address this, PitchBook has developed a method to score an asset manager's various fund families by strategy compared with their peers. We showcase this data in our inaugural Global Manager Performance Score League Tables, which rank the top-performing fund families in 10 strategies.

Read the methodology our Quantitative Research team used to produce the league tables here.

see the rankings

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PE still thirsts for European beverage companies

(kazoka30/Getty Images)

Regardless of broader economic conditions, consumer staples such as beverages are considered necessities, and are therefore attractive to PE firms.

PE European beverage deal volume has been resilient, despite value dropping significantly since 2021. In 2023, there have been 22 PE deals worth a combined €1.5 billion (about $1.64 billion). At current levels, this year is set to outpace 2022 and be in line with most years since 2018.

Recommended Reads

Resistance to wind and solar projects, even from some environmentalists, is among an array of impediments to widespread conversion to renewables. [The New York Times]

One writer's thoughts on how the FTC can transform antitrust. [The Washington Post]

Why the great AI backlash came for a tiny literary analytics startup. [Wired]

Since yesterday, the PitchBook Platform added:

12

VC valuations

2478

People

570

Companies

19

Funds

See what our data software can do

The Daily Benchmark:
2012 Vintage Global PE Funds between $500M-$1B

Median IRR

12.54%

Top Quartile IRR

26.80%

1.09x

Median DPI

Select top performers

Clearlake Capital Partners III

Parthenon Investors IV

Water Street Capital Partners III

*IRR: net of fees

25 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

VC Deals

Chai, which develops AI chatbots, has raised new funding at a $205 million valuation.

South Korea's SK Telecom has agreed to invest $100 million in generative AI company Anthropic and partner with the startup to develop a multilingual large language model.

Veterinary pharmacy Mixlab has raised $10 million in a round led by Vanterra Ventures.

Automotive radar startup Altos Radar has raised a $3.5 million seed round led by investors including ZhenFund and Monad Ventures.

Carbon removal startup Edac Labs has raised a $3 million seed round led by the Grantham Foundation.

Clean Food Group, a developer of sustainable oils and fats technology, has secured a £2.3 million pre-Series A from investors including Agronomics and Doehler Group.

AssetCool, a provider of photonic cooling solutions for power lines, has raised £2.25 million in a round led by Northern Gritstone.

PE Deals

The Carlyle Group-backed fintech company ION Group has completed its purchase of Italian credit manager Prelios from Davidson Kempner Capital Management for €1.35 billion.

KKR has signed a preliminary agreement to include the Italian government in a €23 billion bid for the network business of Telecom Italia SpA, Bloomberg reported.

Haveli Investments has bought a minority stake in mobile game developer Candivore for around $100 million.

Wealth manager Sequoia Financial Group has agreed to acquire peer Affinia Financial Group.

Gordon Brothers has acquired Telefunken, a German consumer electronics company.

ArcLight Capital Partners has agreed to purchase natural gas plant network Kleen Energy Systems from Sojitz.

Endless has acquired UK-based Asco, an energy logistics company that handles more than 1.3 million tons of cargo each year.

Exit & IPOs

Agilitas Private Equity has agreed to sell Danish environmental services company Reconor Group to Basalt Infrastructure Partners.

Corporate M&A

MSCI, an index provider, will acquire an additional 66% stake in data analytics firm Burgiss Group for $697 million, Reuters reported.

Chart of the Day

Source: PitchBook's Q2 2023 Healthcare Services Report

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Away joins list of struggling DTC startups

Older messages

Can fintech leverage generative AI?

Signs of stability for VC valuations

VC's looming deficit

Mixed signals for private markets

Down rounds are way up

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