PitchBook News - Down rounds and deal terms

Also: Why PE & VC may be in store for a more active 2024; New fund performance data for all private market strategies; Don't miss our VC webinar...
Read online | Don't want to receive these emails? Manage your subscription.
PitchBook
Log in
The Research Pitch
February 10, 2024
Presented by Dave Cantin Group
US Market Insights: The private markets were mired in a slower deal and exit environment last year. But encouraging economic indicators, improving credit conditions, and the upturn in public market performance signal that change may be afoot. Read our free research.

Talking VC: Dwindling cash runways and a stagnant exit environment have created intense challenges for US VC. On Thursday, our quarterly Venture Monitor webinar will discuss key takeaways from the report. Register here.

Join our team! If you or anyone in your network are looking for private equity news or data opportunities, check out these job postings: Private Equity Reporter (EMEA), Data Analyst
 
A message from Dave Cantin Group  
Turn data into strategy with insights from the Market Outlook Report
Download a complimentary copy of the report

Dave Cantin Group's Automotive Industry Market Outlook Report (MOR) takes a 360-degree look at the most critical data impacting the retail auto industry in 2024.

Blending actionable data, market feedback, and informed opinions from chief industry players, the report contains valuable insights for all industry stakeholders including dealers, executives, manufacturers, industry professional services advisors, analysts, and vendors.

Leveraging the report's 7 key themes, DCG's leading M&A Advisory Team helps automotive professionals successfully navigate 2024 to overcome these current and emerging market issues.

The Automotive Industry Market Outlook Report was created in partnership with Kaiser Associates, a leading global growth consulting firm.
Share: Email LinkedIn Twitter Facebook
 
VC continues to be an incredibly investor-friendly market
Around the end of 2023, there seemed to be a palpable increase in optimism toward the venture market.

Public small caps had a strong Q4, the US economy continued to drive job growth, and consumer sentiment finished the year at a high since July—and higher than any other point since 2021.

Startup valuations felt this boost, too.

VC valuations continue to be the fulcrum on which the market looks for balance. We know that prices paid a couple of years ago were too high, based on incredibly large multiples in the public market. We also know that private markets can't adjust as quickly as public ones.
 
The market is struggling with valuations of the past.

Continuing to see high top-line valuations in VC is surprising in this market but also somewhat expected. Investors have repositioned to invest in relatively "stronger" companies at each stage, increasing the KPIs necessary to receive funding from the loose deployment mechanics of 2021—and more truthfully pushing for paths to profitability.

However, down rounds are increasing, and because these financings are kept out of the headlines whenever possible, there is an added bias present alongside the strong figures.

Structured deals impact the data in a similar way. High valuations are great until the exit can't support the added investor protections.

The catalyst for a return to strength for VC will be a return of an exit market, which was historically slow in 2023. Until that occurs, VC investors will continue to hold leverage in the market, and their LPs will be pulling the strings.

For a nuanced dive into valuations, our new report tracks prices paid across various stages and sectors in VC and also looks at the increasing protections that are keeping investor-friendly deals flowing.

Download our 2023 Annual US VC Valuations Report.
 
Best,

Kyle Stanford, CAIA
Lead Analyst, Venture
Share: Email LinkedIn Twitter Facebook
 
Market Updates  

The first half of 2023 was a challenging period for private market strategies.

PE, VC, and private debt lagged their historical returns, and only real assets outperformed its 10-year average. PE returned only 6.6% for the year through June, a massive dip from its average return of 16.4% over the last decade.
 

But the surge in public market returns is a sign of optimism for PE and VC. Our Global Fund Performance Report, with preliminary Q3 data, shows that private market strategies are hinting at signs of life:
read the free report
 
 
Real estate and funds-of-funds were the only private market asset classes to improve quarterly returns in Q3.

Real assets halted a positive streak to turn negative. Altogether, industry performance dropped back to 2022 levels of slight growth.

Our Private Capital Indexes, now with data as of Q3 2023, chart out returns across seven private market asset classes and 13 subcategories, including adjusted metrics for use in risk measurement:
read the free report
 
 
Thematic Research  

US VC Fundraising From an LP Perspective

VC fundraising has become a brutal slog, as the bar for LP backing has risen significantly.

Allocators are prioritizing funds whose predecessors converted returns into cash, remained disciplined during the 2021 market frenzy, and had a thoughtful strategy around fund size increases.
 

Emerging managers with unique networks and relevant industry experience can stand out from the pack.

Our analyst note outlines expectations going forward, like smaller fund sizes overall and fewer new products that target areas outside of a GP's core strategy:
read the free research
 
 
Industry & Tech Research  
 
It was a frosty winter for PE in healthcare services.

Dealmaking declined an estimated 16% year-over-year in 2023, while platform deals hit a seven-year low as acquirers reeled from high interest rates and a prolonged labor crunch.

Healthcare services companies made up 20% of leveraged loan default value in 2023, and large deals remain difficult to finance.

Our new Healthcare Services Report recaps last year's totals and looks ahead to how looming rate cuts and antitrust scrutiny will impact the industry:
read the free report
 
 
Enterprise fintech continues to collect more VC dollars than its retail fintech counterpart.

In Q4, deal value for the enterprise vertical was up 20%, reaching $4.7 billion across 304 deals.

According to our new Enterprise Fintech Report, which dives into the startups and key trends driving the space, innovations within payroll tech may be the next big thing:
read a free preview
 
 
Webinars & Events  

Two new webinars to add to your calendars:

Feb. 20: Our panel of professionals connected to the payments industry, including executives at FedNow and Real Time Payments, will discuss the future of real-time transactions. Register here.

Feb. 28: How do investors assess the outlook for crypto? Our panel discussion will address the complexities and evolving nature of these markets. Register here.
 
 
In the News  

Our insights and data featured in the press:
  • How private equity is changing the global soccer landscape. [AP]

  • VCs have changed their view on Greater China from a couple of years ago. [CNBC]

  • Biotech hardware is a famously tough-to-predict sector. [Fortune]

  • When it comes to healthcare and PE, available capital is not always indicative of future dealmaking. [Home Health Care News]
If you're a journalist interested in interviewing our analysts or requesting data, contact our PR team.
 
 
ICYMI  

More of our recent research (* - report preview):

Market updates
Thematic research
Industry & tech research
Credit research
Coming next week (subject to change)
  • Fintech's M&A Landscape Unveiled
  • Gaming Report*
  • Crypto Report*
  • Emerging Space: Counter-Unmanned Aerial Systems
 

Thanks for reading! Feel free to email us any time with feedback, questions, or tips!

Learn more about the PitchBook Institutional Research Group, meet our analysts, or access our research libraries for clients and non-clients.

Did someone forward this newsletter to you? Sign up at pitchbook.com/subscribe.
 
 
Ads
Since yesterday, the PitchBook Platform added:
21
VC valuations
2845
People
740
Companies
22
Funds
See what our data software can do
 
About PitchBook | Terms of use | Advertise with us | Contact
Follow us: in twtr fb

This email was sent to you via the PitchBook Platform.

Do you want to change your email address, get a different edition or unsubscribe? Manage your subscription here.

PitchBook Data Inc., 901 Fifth Avenue, Suite 1200, Seattle WA 98164, United States

© 2024 PitchBook. Win what's next. All rights reserved.

Older messages

The climate-tech startups to watch

Friday, February 9, 2024

Healthcare services' long winter; the top 10 investors in Canadian startups; SoftBank's Vision Fund bags $4B gain Read online | Don't want to receive these emails? Manage your subscription.

Seed stage dodges VC valuation slide

Thursday, February 8, 2024

Clawback risk becomes reality for GPs; real assets outperform other strategies; Europe's female founders dive into 2024 Read online | Don't want to receive these emails? Manage your

Is this the end of co-investments?

Wednesday, February 7, 2024

Q&A: VCs turn to non-dilutive financing; enterprise fintech takes on payroll innovation; charting returns across 7 asset classes Read online | Don't want to receive these emails? Manage your

What LPs look for in a VC fund

Tuesday, February 6, 2024

CVCs crowd out VCs in gen AI deals; a private market waiting game; Q&A: 'Another epic year' for secondaries Read online | Don't want to receive these emails? Manage your subscription.

VC gloom: Who powered through?

Monday, February 5, 2024

Charting VC's budding acquisitions; fintech's tempo slows; healthcare investors proceed with caution; AI brings agtech innovation Read online | Don't want to receive these emails? Manage

🧠 100k users with a niche startup

Thursday, February 22, 2024

How this founder grew a niche startup with YouTube influencer marketing ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

Why It Takes More Than a Year to Close a Big Customer

Thursday, February 22, 2024

Plus, How to Master Partner Marketing To view this email as a web page, click here saastr daily newsletter Yes, It Can Take More Than a Year to Close a Big Customer By Jason Lemkin Wednesday, February

EA Sports is sending out player NIL contracts today. Here's what I know:

Thursday, February 22, 2024

Who is in the game, what's in the contract, the latest on FCS, and more: ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

AI jump-start for hardware?

Thursday, February 22, 2024

Fintech on the auction block; medical robot specialist grabs $110M; CVC Capital raises $6.8B Asia fund Read online | Don't want to receive these emails? Manage your subscription. Log in The Daily

3 Factors to Consider Before Starting a Blog (PLUS How to Build Authority and Influence with Your Audience)

Thursday, February 22, 2024

Hello Reader! How's your blogging week been? We're starting to settle back in to a routine after our long Summer holidays here downunder, as kids have returned to school and life has returned

Amateur Vs. Professional

Thursday, February 22, 2024

Amateurs set goals. Professionals have systems. ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

Dominating The Discussion

Thursday, February 22, 2024

Reddit, Quora, and other top-ranking forums in SERPs. ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

Why Bad News Makes Us Worse, How AI Is Getting Lazier and The Airbnb of Stuff | Non-Obvious Insights #407

Thursday, February 22, 2024

The most interesting and non-obvious stories of the week. Share this email online! https://mailchi.mp/nonobvious/407 Dear Newsletterest, Is a steady diet of bad news turning us into worse humans? What

With 'Charlie,' Pfizer is building a new generative AI platform for pharma marketing

Thursday, February 22, 2024

Pfizer has developed its own generative AI platform called “Charlie,” named after Pfizer co-founder Charles Pfizer. February 22, 2024 With 'Charlie,' Pfizer is building a new generative AI

The workshop is coming down (FINAL NOTICE)

Thursday, February 22, 2024

Last Call: In just a few hours, the groundbreaking "365x Return in 90 Days" crypto trading Workshop will no longer be available Hi there, The clock is ticking. In just a few hours, the