PitchBook News - Why VC exits are accelerating in AI

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The Daily Pitch: VC

November 18, 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 potential implications of Petershill Partners' public listing on the London Stock Exchange.

Investor group Gaingels has become a dealmaking powerhouse as it works to change the culture of VC.

Our analysts explore the major storylines in AI and machine learning during Q3, including deep dives on consumer AI and national defense.

Today's Top Stories

Why VC exits are beginning to outstrip investment in AI

VC activity in AI continued growing in Q3, with a record 1,395 deals worth nearly $26 billion in aggregate. Exit activity accelerated, too, with a quarterly record 127 exits also worth nearly $26 billion. While that figure marked a quarterly decline, AI's exit value continues to exceed VC investment in 2021.

Our latest Emerging Tech Research tracks the major storylines in AI and machine learning last quarter, including deep dives on consumer AI, edge AI software and national defense. Among the takeaways:

Through Q3, AI exits have topped $166 billion, more than triple 2020's total value for VC exits.

Horizontal platforms again led VC deal value, with Databricks, DataRobot, Dataiku and Dataminr all raising rounds over $300 million in Q3.

Use cases achieving outstanding growth in 2021 include ecommerce recommendation engines, edtech and transportation optimization.

read the preview

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Gaingels ratchets up dealmaking to advance LGBTQ causes

(Ivan-balvan/Getty Images)

Investor group Gaingels is taking all the help it can get to change the culture of venture capital and startups.

What started as a mission to fund LGBTQ founders has grown into an effort to increase representation from the cap table to the boardroom. Since 2018, the syndicate has rapidly increased its investing activity, participating in more than 250 deals this year.

Along the way, New York-based Gaingels has sought to enlist its growing network of co-investors and portfolio companies as allies in the cause.

Recommended Reads

Some "stay-at-home" stocks that were pandemic-era darlings have collapsed in the face of economic reopening. [The New York Times]

How Rivian's blockbuster IPO may be the ultimate validation of Tesla's success. [Bloomberg]

What challenges do fund managers like Britain's Baillie Gifford face after decades of stellar returns? [The Economist]

Since yesterday, the PitchBook Platform added:

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Quick Takes


	The Daily Benchmark
	2018 Vintage Global Buyout Funds
	A message from Allvue Systems
	Five steps emerging PE and VC firms can take to accelerate growth
	VC Deals
	Heyday collects $555M in Series C funding
	Coatue leads $150M Series C for CloudWalk
	Netlify captures $2B valuation with $105M round
	Gradiant secures $100M+ Series C
	OpenStore raises $75M
	Electric tractor developer picks up $61M
	Workiz banks $40M
	Fundraising
	LiveOak wraps $210M fund

The Daily Benchmark

2018 Vintage Global Buyout Funds

Median IRR

16.69%

Top Quartile IRR

32.40%

1.16x

Median TVPI

Select top performers

SSC Partners I

Oaktree Special Situations Fund II

Nexus Special Situations II

*IRR: net of fees

120 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

A message from Allvue Systems

Five steps emerging PE and VC firms can take to accelerate growth

With money pouring into private equity and venture capital at unprecedented levels, emerging managers have big opportunities ahead—but also big challenges. Managers must prove that they have the skills, experience and systems to hold their own against the big-name, established players in the market, who are often seen as safer choices—and they have to do it with limited staff and smaller budgets.

What can emerging managers do to take growth to the next level? Find out in Allvue Systems' new white paper, 5 Steps Emerging Private Equity & Venture Capital Firms Can Take to Accelerate Growth. Read it here.

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VC Deals

Heyday collects $555M in Series C funding

Heyday has raised $555 million in a round co-led by Premji Invest and The Raine Group. The startup incubates and acquires third-party sellers on digital marketplaces such as Amazon, helping them build brand exposure to new markets and develop new products. Heyday raised a $70 million Series B in May.

Additional Investors:

General Catalyst, Khosla Ventures, Victory Park Capital

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Coatue leads $150M Series C for CloudWalk

CloudWalk has raised $150 million at a $2.15 billion valuation in a round led by Coatue. The São Paulo, Brazil-based company is the developer of a payments processing platform for small and medium-sized businesses. CloudWalk operates across 4,300 cities and towns in Brazil.

Select Additional Investors:

A-Star Partners, DST Global, Plug and Play Ventures, The Hive, Valor Capital Group

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Netlify captures $2B valuation with $105M round

San Francisco-based Netlify has raised a $105 million round that values it at $2 billion. Bessemer Venture Partners led the Series D, with support from existing backers Andreessen Horowitz, Bond, EQT Ventures, Kleiner Perkins, Mango Capital and Menlo Ventures. Netlify offers a platform for software developers to build, deploy and scale web applications. The company was valued at $593 million in March 2020, according to PitchBook data.

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Gradiant secures $100M+ Series C

Gradiant has raised more than $100 million in a round co-led by Warburg Pincus and Schlumberger New Energy. The Boston-based company is a developer of cleantech water projects intended for advanced water and wastewater treatment.

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OpenStore raises $75M

OpenStore has raised a $75M Series B led by General Catalyst, with support from existing investors Atomic, Founders Fund and Khosla Ventures. The Miami-based startup acquires Shopify businesses to provide liquidity to ecommerce entrepreneurs.

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Electric tractor developer picks up $61M

Monarch Tractor has raised a $61 million Series B led by Astanor Ventures, with support from CNH Industrial, At One Ventures and Trimble Ventures. The company is a developer of electric, driver-optional tractors designed for sustainable farming. Monarch Tractor was valued at $70 million with a $20 million round in March, according to PitchBook data.

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Workiz banks $40M

Workiz has raised a $40 million Series C led by Lead Edge Capital. The San Diego-based company is the developer of a business management platform designed to help home service professionals customize and automate processes. Workiz was valued at $40.7 million in February, according to PitchBook data.

Additional Investors:

G Squared, La Maison Partners, Magenta Venture Partners, Maor Investments, New Era Capital Partners

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PitchBook Webinar: Private fund strategies—Spotlight on VC

Join PitchBook on Dec. 1 for a discussion on the current state of private fund performance in the latest installment of our recurring webinar series, Private Fund Strategies.

Get the latest insights into market performance across asset classes and strategies, including a spotlight on VC and massive VC-backed exit value, record-breaking fundraising, and the continued proliferation of mega-deals.

Key topics include:

A quarterly update on private market fund performance and fundraising.

A spotlight on performance across VC strategies, including a detailed comparison of established and emerging fund managers.

A deep dive on sector specialist fund manager performance.

Deal-level returns as seen through our original research.

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Fundraising

LiveOak wraps $210M fund

Austin-based LiveOak Venture Partners has closed its third flagship fund on $210 million. Founded in 2012, the VC firm backs early-stage tech startups across Texas. LiveOak Venture Partners closed its sophomore fund on $105 million in 2019.

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