PitchBook News - Do VC industry specialists outperform?

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The Daily Pitch: VC

March 18, 2022

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:

Our latest analyst note on private manager style explores whether industry specialization provides an advantage in VC fund performance.

BEX Capital is tapping into investor interest in the PE fund-of-funds secondary market with its new $765 million vehicle.

Today's Top Stories

Do industry specialists have an edge in US VC fund performance?

(Peach/Getty Images)

VCs frequently cite their industry expertise as a source of alpha, but does specialization really lead to outperformance? Our latest analyst note, part of a series on private manager style, explores whether industry specialization provides an edge in VC fund performance.

Our analysts examined a sample of 451 US-based VC funds with vintage years between 1996 and 2015, including vehicles in the VC-heavy industries of tech and healthcare. The findings provide LPs with insights into how they can think about industry specialization when performing fund due diligence.

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Biotech industry faces reset as public market turmoil impacts valuations

(zhangshuang/Getty Images)

Biotech startups are facing a leaner future, as the widespread end of COVID-19 restrictions dampens investor appetite.

VC investments in biotech hit record levels in both 2020 and 2021, as investors sought to capitalize on the sector's pandemic-induced growth. However, amid easing restrictions and turbulence in the public markets, the red-hot biotech market is cooling off.

Recommended Reads

One timber company CEO is confronting the fruitless reality of carbon offsets and looking to fix the broken system. [Bloomberg]

Next-generation nuclear plants could be safer and more efficient, but now the US will need to figure out how to fuel them without relying on Russia. [Wired]

Japanese executives are calling for an end to some of Asia's strictest pandemic restrictions in hopes of returning to overseas dealmaking. [Financial Times]

Since yesterday, the PitchBook Platform added:

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Quick Takes


	The Daily Benchmark
	2018 Vintage Global Real Assets Funds
	VC Deals
	Policygenius picks up $125M
	Cresta hits $1.6B valuation
	Hydrow locks in $55M Series D
	Heirloom nabs $53M
	Gaming startup Dorian secures $14M
	MeliBio raises $5.7M for bee-free honey
	Fundraising
	Slack launches $100M Fund III

The Daily Benchmark

2018 Vintage Global Real Assets Funds

Median IRR

7.04%

Top Quartile IRR

13.30%

1.10x

Median TVPI

Select top performers

Rockland Power Partners III

Kayne Private Energy Income Fund II

Grey Rock Energy Fund III

*IRR: net of fees

52 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

VC Deals

Policygenius picks up $125M

Policygenius has raised a $125 million Series E from investors including KKR, Norwest Venture Partners and Revolution Ventures. The company is the developer of a consumer insurance platform designed to provide online quotes and digital tools for coverage.

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Cresta hits $1.6B valuation

Cresta has raised an $80 million Series C at a $1.6 billion valuation in a round led by Tiger Global. Based in the Bay Area, the company offers an AI-powered customer service platform for contact centers.

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Hydrow locks in $55M Series D

Hydrow, a maker of at-home connected rowing machines, has raised $55 million in a round led by Constitution Capital. Based in Boston, the company offers around 4,000 live and on-demand workouts on its platform.

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View 7 competitors »

Heirloom nabs $53M

Heirloom has raised a $53 million Series A co-led by Carbon Direct Capital Management, Ahren Innovation Capital and Breakthrough Energy Ventures. Based in the Bay Area, the company is a developer of direct air capture technology intended to permanently remove carbon dioxide from the atmosphere.

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Gaming startup Dorian secures $14M

Dorian has raised a $14 million Series A led by The Raine Group. The company is the developer of a video game creation and livestreaming platform.

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MeliBio raises $5.7M for bee-free honey

MeliBio, a company developing honey made without bees, has raised $5.7 million in a seed round led by Astanor Ventures. The funds will be used in part to launch MeliBio's first line of commercial products

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View 2 competitors »

Fundraising

Slack launches $100M Fund III

Slack Fund, the venture capital arm of workplace-messaging-company Slack, has launched a $100 million Fund III focused on seed- and early-stage investments in software startups. The vehicle's predecessor closed on $50 million in 2020.

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View 10 investments »

Chart of the Day

"In the past few years, PE has been noticeably shifting to the larger end of the spectrum, with both fund and deal sizes continually rising. The average PE fund size in the US approached $1 billion through 2021, and a major contributor to this increase has been the uptick in PE mega-funds themselves—defined as vehicles worth $5 billion or more."

Source: PitchBook's 2021 Annual Private Fund Strategies Report