PitchBook News - Black VCs face a new reckoning

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The Weekend Pitch

February 20, 2022

Presented by Elements Global Services

(AlexLMX/Getty Images)

Fragile progress recently made by Black investors is suddenly in jeopardy.

I'm Alexander Davis, and welcome to The Weekend Pitch. You can reach me at alec.davis@pitchbook.com and follow me on Twitter @alecdavis.

It was only a few years ago that Black people began making significant inroads as professionals inside the overwhelmingly white male bastion of venture capital.

And while a growing number of them surely have broken through systemic and cultural barriers to operating in the VC ecosystem, they still struggle to attain acceptance and clout in the private markets' best-performing asset class. Many have formed their own funds out of frustration with work at established venture firms, where people of color sometimes receive empty partner titles but not full-fledged investor status.

"The industry is full of a bunch of bullshit diversity theater," said Elliott Robinson, a Black partner with Bessemer Venture Partners, speaking Thursday on a panel hosted by the nonprofit BLCK VC. "Very little has changed beyond the titling, and it certainly hasn't changed in the roles and responsibilities, and the economics."

During the height of the Black Lives Matter movement in 2020, the financial and corporate worlds were abuzz: Unprecedented dialogue focused on white privilege and its contrast to the dream deferred for Black investors, who aspired to finance diverse entrepreneurship while getting their own shot at VC success.

Quote/Unquote

(Namthip Muanthongthae/Getty Images)

"BlockFi has not been very transparent. I think that is part of the reason why [the] SEC went after them. These are new products, so no one really knows what the real risks of these products look like."

—PitchBook fintech analyst Robert Le on crypto lending specialist BlockFi's $100 million SEC penalty.

Here's a closer look at why the penalty likely won't hold up the demand for crypto lending.

Deal Flow

Early-stage rounds and valuations set new peaks in Europe during 2021.

Early-stage VC valuations across all quartiles finished 2021 above 2020's figures, with the median reaching €7.5 million (about $8.5 million). Early-stage deal sizes across all quartiles were also larger last year, with the median deal size hitting €2.1 million—66.2% higher than in 2020.

Check out our latest European VC Valuations Report for the details.

Did you know ...

(Pogonici/Getty Images)

… That 2021 was a banner year for foodtech funding? VCs invested $39.3 billion across 1,358 deals globally, more than doubling 2020's deal value figure.

On a quarterly basis, funding totaled $10.1 billion across 318 deals, down 16.2% from Q3, though deal values will likely tick up 5% to 10% as data from new rounds is captured.

What was last year's largest foodtech deal? What are the industry drivers behind bio-engineered foods? Our 2021 Annual Foodtech Report answers these questions and more, highlighting key trends within the industry.

Datapoints

Private debt fundraising finished 2021 in near-record fashion. Globally, $191.2 billion was raised, a 12.1% year-over-year gain and the second-highest annual figure on record. In terms of assets under management, private debt is now the third-largest private market strategy, trailing only private equity and venture capital.

Investors continued piling into private debt funds last year, despite a puzzling macroeconomic environment caused by a confluence of factors. Our recent Global Private Debt Report dives deep into the sector, breaking down fundraising by size, region, type and more.

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From airplanes to rental cars to cruises, 2022's travel theme is looking like it will be summed up in two words: go big. [The New York Times]

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Inside the many lives of Heather R. Morgan and Ilya Lichtenstein, crypto's most notorious couple. [Intelligencer]

This edition of The Weekend Pitch was written by Alexander Davis and Ryan Prete. It was edited by Chris Noble, Kate Rainey, Angela Sams and Sam Steele.

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