PitchBook News - SXSW is back with NFTs and psychedelics

Read online | Don't want to receive these emails? Manage your subscription.

PitchBook

Log in

The Weekend Pitch

March 20, 2022

Like our newsletter? The data comes from the PitchBook Platform — our data software for VC, PE and M&A

The Blockchain Creative Lab exhibit at SXSW. (Alexander Davis/PitchBook News)

When South by Southwest held its debut festival, it was a four-day music showcase of 177 artists playing 15 venues. Thirty-five years later, it reaches way beyond music and plays out over 10 days citywide on scores of stages where it gives a preview of a future that will be funded by venture capital.

This is The Weekend Pitch, and I'm Alexander Davis, reporting this week from Austin. You can reach me at alec.davis@pitchbook.com or on Twitter @alecdavis.

SXSW today is wrapping up the 2022 edition of what has exploded into a mega-event known globally for its futuristic exploration of art, media, technology, sports, wellness, politics and activism.

A launch pad for ideas, brands and personalities that later become household names, SXSW each year draws tens of thousands of people to Texas' state capital seeking forward-thinking solutions and novel approaches to big problems.

Which is to say that the event has secured its place in the venture capital ecosystem and its ever-optimistic quest to create the future of everything. This year's installment has been no exception, featuring experts delving into some of Silicon Valley's biggest passion projects, from crypto and climate science to the metaverse and psychedelic drugs.

The return of SXSW following a pandemic hiatus also comes at a time when the city of Austin—thanks in part to the festival itself—stars in another drama that hits home for the VC ecosystem: The rise of hot new metropolises winning over tech and other corporate leaders seeking locales that are more accommodating of their business and personal ambitions.

Quote/Unquote

Hugh Forrest speaks at SXSW 2022. (Shedrick Pelt/Getty Images)

"Russia's unprovoked invasion of Ukraine means our hearts are heavy with grief and worry. We can't ignore that reality. And it is certainly hard to lose ourselves in the fun of South by Southwest when another part of the world is experiencing such inhumanity."

—Hugh Forrest, a 30-year veteran of South by Southwest, in his opening remarks at the festival.

Read more on our reporting from SXSW.

Deal Flow

(Klaus Vedfelt/Getty Images)

The vast majority of US states posted gains in both venture deal count and value during the pandemic, mirroring the overall growth of VC investment.

West Virginia saw the largest growth in VC activity: Deal value rose 443%, and deal count gained 250%. However, the state had only notched four total deals in the two years prior to February, 2020.

Did you know ...

… That in 2021, the US PE middle market experienced the most active dealmaking period in its history, rebounding fervently from the dip in activity during the economic shock of COVID-19 in 2020.

Middle-market exit activity also rocketed to new highs. Rising multiples caused many portfolio companies to hit price targets ahead of schedule and in turn generate early exits.

Datapoints

(Tim Grist Photography/Getty Images)

The proportion of funding going to emerging managers in the real estate space has been declining since the run-up to the global financial crisis, when emerging managers attracted 47.1% of commitments.

In 2021, those managers garnered only 16.2% of the capital allocated to real estate funds. In a space now dominated by big players, it is increasingly difficult for teams to set up new funds.

Read more in our Global Real Estate Report.

Recommended reads

Global economies are accustomed to near-zero interest rates; now consumers, businesses and governments are preparing for a return to what used to be normal. [The Wall Street Journal]

The "Sunshine Protection Act" promises to make daylight saving time permanent, but could it also spell disaster for physical and mental health? [The Atlantic]

Experts share their thoughts on what single policy or action would make the world a more equitable place. [Bloomberg]

One writer's thoughts on why exercise is good for you, but the exercise industry may not be. [The New Yorker]

How private equity and venture capital's opaque practices are baffling regulators trying to root out dirty money. [The Washington Post]

While major fast food, credit card and tech companies have cut ties with Russia, one major industry is holding out: big pharma. [Wired]

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

Were you forwarded The Weekend Pitch? Sign up at pitchbook.com/subscribe.