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The Daily Pitch: VC

December 6, 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:

Parent-tech startups have raised nearly $1.4 billion this year, as VCs' interest in the vertical grows.

What's driving the rapid rise in mega-exits for AI and machine learning startups?

A fan-led review, commissioned by the UK government, calls for a regulatory overhaul of English soccer that could impact the appeal of future PE investments into clubs.

Today's Top Stories

Parent-tech startups on the rise with VCs after pandemic upheaval

NEA partner Vanessa Larco, pictured with her two children, expects to see funding in parent tech startups continue to rise.
(Courtesy of Vanessa Larco)

Growing ranks of women in VC, coupled with the added challenges of child care during lockdowns, are shining a spotlight on the need for more tech-enabled offerings for modern parents.

In 2021, VC-backed parent-tech companies in the US have raised nearly $1.4 billion—more than in the previous four years combined.

"It's no coincidence that the more women you get in venture, the more of these parenting-tech startups get funded because a lot of parent-related tasks fall on women," said NEA's Vanessa Larco.

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What's driving the AI & ML mega-exit boom

(monsitj/Getty Images)

The rapid increase in mega-exits of AI and machine learning startups demonstrates promising areas for private companies to apply AI & ML, including autonomous vehicles, information security and IT operations.

Mega-exits in the sector have tripled from eight to 26 year-over-year through the third quarter of 2021, with deal value quintupling to $153.3 billion.

Our latest analyst note explores leading use cases for AI mega-exits and why companies that use deep learning as their primary AI architecture are on pace to overtake supervised machine learning startups in mega-exits by 2022.

read it now

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Didi's US departure shifts IPO train into reverse

(Spencer Platt/Getty Images)

Ridehailing leader Didi Global is planning to pull its New York-listed shares and go public in Hong Kong as competing US-China regulatory agendas leave Chinese companies with little room to maneuver.

A recent surge in Chinese companies listing in the US came to an abrupt halt over the summer as Beijing's tech crackdown intensified. Valued at nearly $68 billion in its IPO, Didi was the largest of a cohort that included trucking platform Full Truck Alliance and real estate heavyweight Beike.

Last week the SEC finalized rules that require foreign companies to open their books to US regulators. SEC Chair Gary Gensler wrote in a September op-ed that 270 companies in China and Hong Kong could be booted from US exchanges by early 2024 if they do not comply.

The worsening outlook has hammered the shares of giants like Alibaba and Pinduoduo. Chinese tech stocks now trade at deep discounts to their US counterparts, Bloomberg reported.

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Review puts investment in English soccer under the microscope

Fans cheer for Newcastle United, whose recent acquisition spotlighted one of the issues raised in the UK government review. (Ian MacNicol/Getty Images)

A fan-led review is calling for a regulatory overhaul of English soccer, which may impact the appeal of future PE investments into clubs.

The review, commissioned by the UK government, recommends the establishment of a so-called Independent Regulator for English Football that would both oversee financial regulation and assess who can be the owner of an English soccer club.

The review also calls for a better distribution of wealth in the sport, potentially changing a system that has disproportionately benefited the most elite teams.

Recommended Reads

How a pixel-art revival is building a new internet aesthetic out of an older era. [The New Yorker]

Details on the medical care of hundreds of millions of global patients are piling up in electronic health records. Now healthcare professionals are beginning to tap the treasure trove of information to treat people in real time. [The Wall Street Journal]

Meet Michael Silvester, a Twitter wildfire watcher in New Zealand who tracks California's destructive blazes. [Wired]

Quick Takes


	The Daily Benchmark
	2014 Vintage Global Growth Funds
	VC Deals
	LingoAce collects $160M across two rounds
	SoftBank leads $50M round for Clarity AI
	Coda Biotherapeutics locks down $28M
	Skincare tech startup Droplette secures $15M+
	Singapore's AAGV raises $12.5M
	Porsche's CVC arm backs sustainability-focused 1Komma5

The Daily Benchmark

2014 Vintage Global Growth Funds

Median IRR

15.70%

Top Quartile IRR

30.09%

1.40x

Median TVPI

Select top performers

Northlane Capital Partners I

Spectrum Equity VII

Insight Venture Partners IX

*IRR: net of fees

19 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

VC Deals

LingoAce collects $160M across two rounds

Sequoia India has led a $105 million Series C for edtech startup LingoAce, with participation from Owl Ventures, Shunwei Capital and SWC Global. The Singapore-based company also disclosed a $55 million Series B, raised earlier this year and led by Tiger Global and Owl Ventures. LingoAce's language platform helps children learn Mandarin Chinese.

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SoftBank leads $50M round for Clarity AI

Sustainability tech startup Clarity AI has announced $50 million in funding led by SoftBank's Vision Fund 2, with participation from Fifth Wall's ClimateTech Fund and other investors including BlackRock. The round, which closed in August, values the company at $450 million.

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Coda Biotherapeutics locks down $28M

Coda Biotherapeutics has raised $28 million in financing led by Pacira BioSciences, with existing investors MPM Capital and Versant Ventures also participating. Bay Area-based Coda is developing a gene therapy-mediated platform for neurological disorders.

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Skincare tech startup Droplette secures $15M+

Droplette has raised $15.4 million in Series B funding co-led by Victress Capital and Spark Capital. Bolt and Amplifyher Ventures also participated in the round for the Boston-based startup, which is the developer of a skin repair device.

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Singapore's AAGV raises $12.5M

AAG Ventures has raised $12.5 million in funding led by Shima Capital, Tribe Capital and Tess Ventures. The startup's play-to-earn and learn-to-earn platforms allow users to earn cryptocurrency through gaming or learning transferable skills.

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Porsche's CVC arm backs sustainability-focused 1Komma5

Porsche Ventures has invested an undisclosed amount into 1Komma5, a German sustainable energy startup seeking to enable carbon-neutral homes.

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Chart of the Day

"The recovery of first-time fundraising reflects optimism in the PE fundraising market overall, as LPs regain confidence to invest with new managers. First-time funds accounted for 13.8% of fund closes in H1 2021, up from 8.5% in 2020, though this bump is also partially attributable to fundraising delays in 2020."

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