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The Research Pitch

March 6, 2021

Introducing a new Saturday newsletter dedicated to research content

Not long ago, our entire institutional research function was a small team focused on quarterly market updates.

But over the last few years, we've invested heavily in developing a global analyst team that encapsulates so much more:

Full coverage of our core private market asset classes like private equity and venture
A dedicated emerging technology group
A fund strategies and performance group
A quantitative research group developing core intellectual property, benchmarks and proprietary models to help our clients navigate their markets

These days, we're publishing new research nearly every day, and as we continue to grow our team and scope of coverage, this volume will only grow.

We know our research is only helpful if you see it, so starting today, we're launching a weekly Saturday newsletter to redistribute all our content published over the course of the week.

We will also be delivering fresh insights on new deals or developing trends, in addition to updates on where our team is speaking or being featured in the press.

We want this newsletter to be a coveted landing spot as you look to make sense of one of the most dynamic economic environments in history.

Are rates really going to inch higher, and if so, what does that really do to an LP's capital allocation or commitment pacing strategy to alternatives?

What does that do to the discounting mechanism that has helped keep valuations sky-high across the entire financial ecosystem?

As unicorns are finally moving forward with public listings, how should our clients be thinking about new exit strategies such as SPACs or direct listings?

What should investors and corporates make of shifting trends in the autonomous driving landscape?

Throughout the innovation ecosystem, where do our analysts see new profit pools emerging?

These are the types of questions our analyst teams are looking to unpack for you, and we hope this newsletter will help make sure you never miss a beat.

As always, we want to hear from you, so please don’t hesitate to reach out with any of your feedback to pbinstitutionalresearch@pitchbook.com.

Best,

Nizar Tarhuni
Director of Institutional Research

Market Updates

Both early- and late-stage valuations in the US reached new heights in Q4 2020, a strong end to a volatile year often defined by uncertainty.

Our 2020 Annual US VC Valuations Report tells how record dry powder, nontraditional investors, a flight to quality, and a market rally all played a part.

It also covers exit valuations, breaks down deal terms like liquidation preferences and dividends, and compares our data across select sectors:

read the report

Venture capital funds posted a horizon IRR of 10.5% during the third quarter of 2020, the best figure for any major private market strategy, followed closely by private equity.

Our latest Global Fund Performance Report is a 27-page showcase of all the freshest data across various time horizons and strategies:

read the report

Thematic Research

Consumer Unicorns Make Moves for 2021 Direct Listings – VC-backed giants like Roblox and Coinbase have filed for blockbuster direct listings, and data software providers Databricks and UiPath are on the same path. VC analyst Cameron Stanfill explains why these huge unicorns are choosing direct listings over SPACs.

First-Time PE Funds Overview – The prevailing narrative for first-time PE funds is one of overperformance, at least when compared to those from more established managers. But the real story is more nuanced, and dependent on the metrics you choose, according to PE analysts Wylie Fernyhough and Rebecca Springer.

Emerging Tech Research

Both deal and exit activity are setting records in the artificial intelligence and machine learning space.

The segments leading the way? Healthcare, consumer, enterprise IT and autonomous vehicles.

Analyst Brendan Burke covers it all, including how activity is heating up with autonomous robotics, in his deep dive on the sector:

Download our latest AI/ML research

VC activity in supply chain tech is also hot, especially in enterprise software and warehousing tech.

Elsewhere, downstream logistics startups have attracted large deals. Risk management and visibility startups are gaining traction.

Analyst Asad Hussein breaks it all down, including what trends are here to stay post-pandemic:

Download our latest supply chain tech research

Webinars & Events

Which AI use cases are taking off?

What's driving electric vehicle startups to SPACs?

Last week, our tech research team hosted a webinar to discuss the most compelling trends taking hold in AI/ML, mobility and agtech. The recording is available to all (and at 2x speed).

Earlier this week, VC analyst Joshua Chao presented market data for DLA Piper's webinar on "The Current State of Life Sciences Financing."

Also, save the date for these upcoming events:

March 17 — Our Benchmarks underwent an overhaul this year. We'll go over what the new data shows, with a spotlight on first-time funds and emerging managers. Register here.

March 18 — Emerging tech analyst Brendan Burke will be participating in an IoT Hub Meetup event discussing IoT and VC.

March 24 — Our VC analysts will walk through the latest venture valuations data across the US and Europe. A big theme: capital availability. Register here.

Deal Commentary

In response to Swedish fintech giant Klarna raising $1 billion in venture funding at a $31 billion valuation:

"The 'buy now, pay later' space has garnered significant investor interest in recent years, with many anticipating that this model will challenge the traditional credit card market long dominated by incumbent banks. Klarna is by far the largest provider in this space, leading all competitors in gross merchandise volume ($50 billion in 2020), number of merchants, and number of active customers. The company's closest competitor in the US is Affirm ($6 billion GMV in 2020), which went public earlier this year and reached a market cap of $36 billion. We expect Klarna to use this fundraise to strengthen its balance sheet as it prepares for a direct listing, continue global expansion, and acquire other BNPL providers in niche market categories and geographies."

Robert Le

Senior Emerging Technology Analyst
Fintech

In the News

A sample of our insights recently featured in the press:

In a guide to how SPACs work, analyst Cameron Stanfill explained the ways in which public market investors are enticed to invest in SPAC IPOs. [Business Insider]

With KKR planning to make its shares more accessible to individual investors, a recent PitchBook report on public PE giants provided context into key metrics and trends from their latest earnings reports. [Institutional Investor]

A new funding round has filled Instacart's coffers and made it the second most valuable VC-backed company in the US, according to our data. Analyst Alex Frederick discussed where the food delivery unicorn might put the money to work. [CNBC, Business Insider]

If you're a media outlet interested in interviewing our analysts, contact our PR team.

ICYMI

Here are highlights from our other research content published this quarter:

Market updates

Thematic research

Emerging Technology Research deep dives

Coming next week (subject to change)

2020 Annual European VC Valuations Report
Analyst note: Choosing Your GP Stakes Partner
Analyst note: An Overview of Venture Capital Trusts in the UK
ETR: Retail Health & Wellness Tech
ETR: Agtech

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

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

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PitchBook News - A new chapter for PitchBook research

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