PitchBook News - Top VCs are flocking to the seed market

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The Daily Pitch: VC

October 25, 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:

Traditional VC firms are flocking to the seed-stage market to get in on the ground floor of the most promising startups.

Venture capital funds worldwide recorded the best performance among all private capital strategies in early 2021 returns.

Our latest US PE Breakdown, packed with data and analysis about private equity's record year.

Today's Top Stories

Seed market braces for onslaught of top VC firms

(diane555/Getty Images)

The highly fragmented seed fund market is bulking up with investors better known for writing checks out of their mega-funds.

As Sequoia, Greylock Partners and Andreessen Horowitz get ready to plow over a billion dollars into the seed market, some traditional seed firms are skeptical that these multistage VCs will roll up their sleeves to help get startups off the ground.

Since brand-name firms have hundreds of portfolio companies, they may not have much reason to focus on their seed-stage startups, investors say.

Traditional seed VCs also view large firms' entrance into the seed market as a branding tactic for wooing more founders, earlier.

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One writer's thoughts on how the ridesharing mythology is falling apart. [The New York Times]

As the number of young Facebook users in the US declines, the tech giant is being forced to confront its growth problems. [Financial Times]

Since yesterday, the PitchBook Platform added:

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VC valuations

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People

46

Companies

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Quick Takes


	The Daily Benchmark
	2015 Vintage Global PE Funds with less than $250M
	Partner Perspectives
	Record investment in Tough Tech set to eclipse $80B across 5,800 deals
	VC Deals
	Brex raising cash at a $12B+ valuation
	VideoAmp picks up $275M
	Rippling rakes in $250M Series C
	Click Therapeutics lands $52M
	Citcon banks $30M
	Foodology brings in $15M
	Exits & IPOs
	India's Nykaa targets $7B+ valuation in IPO
	Investors
	Build Capital launches VC arm

The Daily Benchmark

2015 Vintage Global PE Funds with less than $250M

Median IRR

12.51%

Top Quartile IRR Hurdle Rate

20.78%

1.22x

Median TVPI

Select top performers

Century Park Growth Fund & SPV Investments

Boathouse Capital II

Lineage Capital II

*IRR: net of fees

28 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

Partner Perspectives

Record investment in Tough Tech set to eclipse $80B across 5,800 deals

The 2021 Tough Tech Landscape Report is now available, detailing how its three primary arenas of climate change, human health, and advanced systems and infrastructure are experiencing record surges in investment. Created by The Engine, the MIT spinout venture firm, the report draws on highly customized, curated PitchBook datasets to unpack key drivers of this investment surge, including breakthrough technical advances, expansion of business applications and more. Highlights include:

$300 billion-plus invested in Tough Tech from 2016 through summer 2021.
A new high for median late-stage pre-money valuation for Tough Tech companies at $80.7 million.
Important business and macro factors for the 15 Tough Tech segments examined, from nanotech to semiconductors to quantum computing.

Read the report

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VC Deals

Brex raising cash at a $12B+ valuation

Fintech specialist Brex is raising $300 million at a $12.3 billion valuation, TechCrunch reported. Greenoaks is leading the round, which comes six months after the company was valued at $7.4 billion. Known for its corporate credit cards aimed at startups, San Francisco-based Brex has expanded into a range of financial services as well as venture debt.

View round

View 54 competitors »

VideoAmp picks up $275M

VideoAmp has raised a $275 million Series F led by Spruce House Investment Management. Founded in 2014 and based in Los Angeles, the company offers software to measure advertising performance across multiple platforms. The funding values VideoAmp at $1.4 billion.

Additional Investors:

Ankona Capital, D1 Capital Partners, Epiq Capital, Tiger Global

View round

View 73 competitors »

Rippling rakes in $250M Series C

Rippling has raised $250 million at a $6.5 billion valuation in a round led by Sequoia and Global Growth. Founded in 2016, the company is the developer of an employee management platform that helps businesses unify their HR and IT data.

Select Additional Investor:

Greenoaks Capital Partners

View round

View 31 competitors »

Click Therapeutics lands $52M

Click Therapeutics has raised a $52 million Series B co-led by Accelmed and HIG BioHealth Partners. The New York-based company develops digital prescription medical treatments for patients with chronic pain, autoimmune disorders and other health conditions.

Additional Investors:

Health Catalyst Capital, Hikma Ventures, K2 HealthVentures, Revelation Partners, Ridgetop Health, Sanofi Ventures

View round

View 23 competitors »

Citcon banks $30M

Fintech startup Citcon has raised a $30 million Series C co-led by Norwest Venture Partners and Cota Capital. The San Jose-based company is the developer of a mobile wallet payment platform that helps merchants including Tumi and Macy's process transactions.

Additional Investors:

Sierra Ventures, Sonae IM

View round

View 34 competitors »

Foodology brings in $15M

Foodology has raised a $15 million Series A co-led by Andreessen Horowitz and Base Partners, TechCrunch reported. The Bogotá-based company creates and operates restaurant brands in virtual kitchens across Mexico and Colombia.

Select Additional Investors:

Jaguar Ventures, Kayyak Ventures

View round

View similar company »

Exits & IPOs

India's Nykaa targets $7B+ valuation in IPO

Nykaa has set the price of its initial public offering at 1,085 rupees to 1,125 rupees (about $14.47 to $15) per share, giving the company a valuation of up to $7.1 billion, Reuters reported. The Mumbai-based company, backed by investors including TPG and Fidelity Investments, aims to raise nearly $500 million through a three-day IPO subscription beginning Oct. 28. The cosmetics retailer is run by FSN E-Commerce Ventures.

View details

View 12 competitors »

Investors

Build Capital launches VC arm

Build Capital has rebranded its mobility-focused division and launched Lane VC, an autonomously managed venture capital firm. Based in Salt Lake City, the new VC arm will focus on electric vehicles and ancillary technologies across the mobility sector.

View details

View 4 investments »

Chart of the Day

"Middle-market firms continue to execute on the tried-and-true roll-up across sectors, spurred by the current environment in which platform multiples are high and many small business owners are looking to sell. For instance, insurance brokerages, wealth management firms, and registered investment advisors (RIAs) all saw record M&A activity in the first half of 2021, largely driven by PE-backed platforms."

Source: PitchBook's Q2 2021 US PE Middle Market Report