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The Daily Pitch: VC

September 3, 2021

Like our newsletter? The data comes from the PitchBook Platform — our data software for VC, PE and M&A

In today's Daily Pitch, you'll find:

The third installment in our research note series on venture returns by stage.

An analysis of why US VC valuations have rocketed to new heights.

Today's Top Stories

How early-stage VC deals drive inordinately high returns

(RapidEye/Getty Images)

Investors are consistently allocating larger amounts of capital to startups that go on to exit successfully—a trend especially distinct with later-stage financing.

Our latest analyst note is the third in our series breaking down venture returns by round. In this new installment, we've refined our approach to enable richer analysis of the flow of capital. Key takeaways include:

The data suggests a clear relationship between capital raised and the success or failure of a company.

The earliest stages, especially Series A, show asymmetrically high returns compared with later-stage deals.

The attractive VC fund returns of the past few years have accelerated the increase in capital allocated to venture investing.

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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.

Our 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.

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A message from Ansarada

21 must-know trends from 100+ global dealmakers

Ansarada has partnered with Mergermarket to analyze the impact of digital technology across every stage of the deal lifecycle—from deal strategy, marketing and preparation to due diligence, negotiation, closing and post-deal integration.

After interviewing more than 100 global dealmakers, Ansarada has broken down the current trends across end-to-end M&A dealmaking practices in its report, 21 trends the modern dealmaker needs to know.

A must-read for anyone wanting to improve and streamline their deal processes through innovation and automation.

Download the free trends report here

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Recommended Reads

Early investors in the SPAC boom may be sitting on high returns, but late arrivals are not faring as well. [The Wall Street Journal]

Investors are facing a backlash as some question the efficacy of sustainable investing and whether it is only slowing down real change. [The Economist]

Many tobacco companies are trying to rebrand for a smoke-free future, but can the public trust them? [The Washington Post]

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Quick Takes


	The Daily Benchmark
	2012 Vintage Global Buyout Funds
	VC Deals
	ProbablyMonsters hauls in $200M
	Carbon Robotics banks $27M
	Plantible cooks up $21.5M in new funding

The Daily Benchmark

2012 Vintage Global Buyout Funds

Median IRR

15.32%

Top Quartile IRR Hurdle Rate

20.42%

1.57x

Median TVPI

Select top performers

MTS Health Investors III

BVIP Fund VIII

Clearlake Capital Partners III

*IRR: net of fees

105 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

VC Deals

ProbablyMonsters hauls in $200M

Video game developer ProbablyMonsters has raised a $200 million Series A led by LKCM Headwater Investments. Founded in 2016, the Bellevue, Wash.-based company plans to use the funding in part to support its goal of ensuring long-lasting, sustainable careers for those in game development.

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Carbon Robotics banks $27M

Carbon Robotics has raised a $27 million Series B led by Anthos Capital. The Seattle-based company is the developer of an autonomous robot designed to help farmers eradicate weeds and unwanted plants through thermal energy. Carbon Robotics was valued at $29 million in 2019, according to PitchBook data.

Additional Investors:

Bolt Innovation Group, Fuse, Ignition Partners, Liquid 2 Ventures, Voyager Capital

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Plantible cooks up $21.5M in new funding

Plantible has raised a $21.5 million Series A led by Astanor Ventures, with support from other investors including Eighteen94 Capital and Unshackled Ventures. Founded in 2018, the San Diego-based company uses lemna, a type of aquatic plant, to create plant-based protein products. Plantible plans to use the funding to build its first commercial facility by 2022.

Additional Investors:

Vectr Ventures, FTW Ventures, GoodFriends, Lerer Hippeau Ventures, Piva Ventures, CJ CheilJedang

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