PitchBook News - Sequoia stands tall, defying VC rout

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The Daily Pitch: VC

October 24, 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:

How Sequoia is weathering the VC downturn better than many of its peers

PE firms are relying on the profitability of high-quality portfolio companies to generate returns

Mapping out the state of the supply chain tech sector that backdrops Convoy's crisis

Vista's EngageSmart acquisition breaks through ever-shrinking take-private valuations

Today's Top Stories

Exclusive: Sequoia marks up funds, defying VC rout

(Smith Collection/Gado/Getty Images)

Venture capital may be going through the deepest slump since the global financial crisis, but Sequoia appears to be weathering the downturn better than many of its peers.

The firm has marked up 15 of its funds by an average of 9.2%, according to a PitchBook analysis of financial statements from UC Regents, an LP in about two dozen Sequoia vehicles with vintage years 2018 and later.

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4 charts: The crisis in freight tech behind Convoy's collapse

(Courtesy of Convoy)

Convoy was riding high in 2022. The supply chain tech startup billed as an "Uber for trucking" had hit a valuation peak of $3.8 billion and had received backing from investors including Greylock Partners, CapitalG and Bill Gates.

But its success has since come to a grinding halt, culminating in its ceasing operations last week after it was unable to raise more venture capital or find a buyer. We've put together four charts that explain why investors are fleeing the once-hot supply chain tech sector.

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A message from Cleo

The rapid rise of AI in personal finance

Among Generation Z and millennials, AI-powered assistants focused on financial well-being have seen an outsized uptake in 2023. Their ability to reduce feelings of anxiety while increasing your ability to save amidst the cost-of-living crisis are the likely drivers of this trend.

Cleo's internal benchmarking shows:

An 85% increase in money-related chatbot conversations and engagement
71% of users feeling more optimistic about their long-term financial future after chatting to an AI coach
Over 67% of users reporting an improved ability to stay on top of bills, save money, and control their overall spending

See the full report

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Navigating the flavorful frontier of foodtech investment

Our Emerging Tech Research Foodtech Overview covers the trends, industry segments and VC opportunities in the space.

Dealmaking has started trending upward, with Q2 2023 deal count rising more than 13% quarter-over quarter. And there's still plenty on the menu, from bio-engineered foods to new food production methods.

read the preview

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PE firms rely on organic growth for returns

(Yulia Reznikov/Getty Images)

Private equity firms are increasingly reliant on the organic growth of their portfolio companies.

Operational improvements and cash flow at PE-backed portfolio companies have always accounted for a portion of the asset class's returns, but now, as various alpha-generating avenues have closed, these elements are fundamental.

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Vista's latest take-private breaks the sub-$1B ceiling

(artpartner-images/Getty Images)

Vista Equity Partners has agreed to buy EngageSmart, a customer engagement software and payment solutions company, in one of this year's few take-privates valued above $1 billion.

The firm announced the all-cash take-private on Monday, valuing EngageSmart at about $4 billion and marking Vista's fourth take-private transaction since October 2022.

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Tools to improve business travel expense management

There is an array of tools available to help you manage your business expense challenges, including cost control, reimbursement processes and transaction security.

Middle-market companies are taking a fresh look at business travel and how to address these challenges while maximizing the value of in-person collaboration.

The latest Citizens article examines corporate card tools that organizations use to stay on track for cost control, convenience and security.

Explore business travel strategies

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People

Lightspeed has hired Aaron Frank, who helped to launch the Apple Card in partnership with Goldman Sachs, to source fintech deals.

VC Deals

Dallas-based Island raised a $100 million Series C led by Prysm Capital. Island makes an internet browser for businesses.

Nomad Homes has raised an additional $20 million extension for its Series A led by Acrew Capital for its real estate listing software.

German insect farming startup FarmInsect has closed an €8 million Series A from investors including Bayern Kapital, High-Tech Gründerfonds and Sandwater.

Flash Pack, a London-based provider of boutique trips for solo travelers, has raised £5 million in a round led by JamJar Investments.

Mexico City-based Finerio Connect, an open finance provider, raised $6.5 million led by Third Prime, TechCrunch reported.

Lillian Care, a German startup enabling primary healthcare delivery to underserved areas, has secured €2.4 million led by Nina Capital.

PE Deals

Stonepeak agreed to acquire Textainer—a company listed on the NYSE and Johannesburg Stock Exchange that leases intermodal containers—at an enterprise value of $7.4 billion.

BaltCap has agreed to buy VKG Elektrivorgud, the second largest electricity distribution network operator in Estonia.

Surexport, a producer and distributor of fresh berries owned by Alantra Private Equity, has completed three add-on acquisitions: Portuguese raspberry producer Solana, Moroccan blueberry producer AG Group and Spanish organic berry producer Flor de Donana.

AnaCap-owned accounting software company Orbyt has acquired Telia Talous, the Finnish operations of Nordic telecommunications company Telia.

General Atlantic agreed to acquire a minority stake in India-based global travel distribution platform TBO from Affirma Capital.

Exit & IPOs

Swedish battery maker Northvolt is eyeing an IPO in Stockholm, which could be worth as much as $20 billion, the Financial Times reported.

AI-powered data company DataBricks has acquired Arcion, a DataBricks Ventures-backed startup that enables enterprise database replications, for $100 million.

One Equity Partners agreed to sell Finland-based Walki, which manufactures specialty packaging materials and other goods, to Japanese paper technology company Oji Holdings.

Gemspring Capital agreed to buy Inflow Communications from Renovus Capital Partners, with plans to merge the Portland-based managed service provider for contact centers with Gemspring portfolio company Amplix.

Fundraising

Philadelphia-based healthcare growth investor 1315 Capital closed two funds, which raised $500 million in total to target investments up to $40 million for minority or majority stakes.

Wellington Management has closed Wellington Investments Fund I on $150 million to invest in early-stage tech companies.

Permira is planning to move its stakes in Evelyn Partners, a UK-based wealth manager, and Teraco Data Environments, a South Africa-based data center operator, into a continuation fund, Reuters reported.

Corporate M&A

Chevron agreed to purchase New York-based oil and gas producer Hess in an all-stock deal that values the company at $53 billion.

Chart of the Day

Source: Integrating Digital Assets and Crypto Into Traditional Finance

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PitchBook News - Sequoia stands tall, defying VC rout

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