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PitchBook News - Why US VC valuations are soaring

Adobe buys Frame.io for $1B+; DriveWealth banks $450M; real estate tech specialist lands $120M; India's Zetwerk hits unicorn valuation
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The Daily Pitch: VC
August 23, 2021
Like our newsletter? The data comes from the PitchBook Platform — our data software for VC, PE and M&A
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In today's Daily Pitch, you'll find:
  • An analysis of why VC valuations rocketed to new heights in Q2 2021.

  • How private equity buyouts in cybersecurity are hitting new records as the industry responds to remote working and hackers.
Today's Top Stories
US VC valuations reach unprecedented levels
Record levels of dry powder and a fierce influx of nontraditional investors into the venture ecosystem have buoyed VC-backed company valuations to record heights in the second quarter of this year.

PitchBook's latest US VC Valuations Report examines how startup valuations across the venture lifecycle and sectors have changed in 2021. Key takeaways include:
  • Early-stage pre-money valuations notched records in Q2, with a median and average of $50 million and $105.4 million, respectively.

  • At the late stage, the median and average valuations hit $160 million and $882.4 million, respectively, representing a sharp increase from values recorded in previous years. The value growth is partly driven by investor willingness to write increasingly larger checks to pre-IPO companies.

  • Exit valuations grew at a decade-record rate, with median acquisition and public listings step-ups of 2.2x and 1.7x, respectively, from their last private market values.
read the report
 
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Hackers, remote workers spur record PE investment in cybersecurity
(Olemedia/Getty Images)
Private equity buyouts in cybersecurity are hitting new records as a fast-growing industry responds to a surge in remote working and increasingly sophisticated cyberattacks.
  • PitchBook's Q2 2021 US PE Breakdown revealed cybersecurity deals have swelled in terms of deal value over the past six quarters, and have spiked in 2021 thanks to a handful of blockbuster pacts.

  • Announced in April, Thoma Bravo's $12.3 billion acquisition of Proofpoint set a record for the largest cybersecurity buyout ever, and was larger than all cybersecurity buyouts in the third and fourth quarters of 2020 combined.

  • Factoring in the Proofpoint buyout and the $900 million acquisition of ExtraHop by Bain Capital and Crosspoint Capital Partners in June—both of which have been agreed to but not yet completed—cybersecurity buyouts have already reached $23 billion combined in 2021. More deals are expected.
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A message from NetSuite and ContinuServe
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To learn more about this new solution and how it drives value, download this compelling white paper.
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Senior female VCs call out major funding disparity in Europe
Experior VC partner Kinga Stanislawska is one of the women behind a report showing a major funding gap for female investors in Europe.
(Noam Galai/Getty Images)
A group of prominent women VCs in Europe is calling for more capital to go to female-led vehicles to help support female-founded startups.
  • Despite a record amount of capital invested this year, European female founders have received only 0.7% of the total funding.

  • A recent report put out by European Women in VC found that a major block to gender parity for women-led startups is the lack of female general partners in European firms.

  • The group is aiming to have at least 30% of the available LP and funds-of-funds capital go to women-led vehicles within the next five years.
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Recommended Reads
More and more startups are choosing to play it safe and slow by rejecting their highest VC offers in favor of lower-priced deals. [The Information]

What the pandemic's unexpected tidal wave of entrepreneurial activity could mean for the economy. [The New York Times]

Electric car batteries don't last forever, and it's time to plan how to handle the waste. [The Guardian]
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Quick Takes
  The Daily Benchmark  
  2015 Vintage US PE Funds  
  VC Deals  
  DriveWealth banks $450M Series D  
  India's Zetwerk hits unicorn valuation  
  QuintoAndar lands $120M  
  Exits & IPOs  
  Adobe set to pick up Frame.io in $1.2B+ deal  
 
 
The Daily Benchmark
2015 Vintage US PE Funds
Median IRR
14.68%
Top Quartile IRR Hurdle Rate
20.80%
1.40x
Median TVPI
Select top performers
Gridiron Capital Fund III
Brookfield Capital Partners IV
Century Park Growth Fund & SPV Investments
*IRR: net of fees
91 Funds in Benchmark »
Check out the latest version of PitchBook Benchmarks
VC Deals
DriveWealth banks $450M Series D
DriveWealth has raised $450 million at a $2.85 billion valuation in a round co-led by Insight Partners and Accel. The company is a developer of API-driven brokerage infrastructure that helps businesses support embedded investing and fractional trading. DriveWealth was valued at around $217 million in 2020, according to PitchBook data.
Additional Investors:
Base10 Partners, FTX, FlightDeck, Greyhound Capital, Point72 Ventures, SoftBank
View round
 
View 21 competitors »
 
India's Zetwerk hits unicorn valuation
Zetwerk has reportedly raised $150 million at a $1.5 billion valuation in a round led by D1 Capital. Founded in 2018, the Bengaluru-based startup runs an online marketplace for manufacturing items and services.
View round
 
View 1 competitors »
 
QuintoAndar lands $120M
Real estate tech company QuintoAndar has raised a $120 million round led by Greenoaks and Tencent, boosting its valuation to $5.1 billion. The funding was a Series E extension that brings the round's total to $420 million. Brazil-based QuintoAndar was reportedly valued at $4 billion in May when the Series E, led by Ribbit Capital, was first announced.
View round
 
View 4 competitors »
 
Exits & IPOs
Adobe set to pick up Frame.io in $1.2B+ deal
Frame.io, the maker of a collaborative video editing platform, has agreed to be acquired by Adobe in a $1.28 billion deal. The New York-based startup was valued at $808 million in June, according to PitchBook data. Frame.io has received backing from Insight Partners, Accel and Shasta Ventures.
View details
 
View 19 competitors »
 
Chart of the Day
Source: Q2 2021 PitchBook-NVCA Venture Monitor
Who's in the newsletter today?
Investors
Accel
Base10 Partners
D1 Capital
FTX
FlightDeck
Greenoaks
Greyhound Capital
Insight Partners
Point72 Ventures
Ribbit Capital
Shasta Ventures
SoftBank
Tencent
Companies
Adobe
DriveWealth
Frame.io
QuintoAndar
Zetwerk
 
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