PitchBook News - US VC braces for a possible slowdown

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

PitchBook

Log in

The Daily Pitch: VC

March 28, 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:

Grocery delivery provider Instacart has cut its valuation to $24 billion in hopes of attracting talent and retaining employees by offering them more reasonably priced stock grants.

Our latest Quantitative Perspectives report dives into how the US venture industry may be able to weather headwinds in 2022.

US investors are dominating Chelsea Football Club's sale shortlist.

Today's Top Stories

Quantitative Perspectives: US VC braces for possibility of slowdown

Despite the breakneck momentum of the past two years, 2022 has ushered in some potential headwinds for the venture capital industry. Depressed equity markets, a prominent theme of inflation and geopolitical turmoil are all contributing to uncertainty.

Our latest Quantitative Perspectives report dives deep into how the US venture industry may be able to weather these difficulties. The report also offers a closer look at public market movements, which have historically been a good indicator of venture activity.

Key takeaways:

Investors have left themselves vulnerable to valuation corrections by sacrificing protective deal terms in exchange for access to deal flow.

The prospect of increasing bond yields may reduce venture's allure to LPs, but that effect will likely be tempered if inflation persists.

VC investment outside of traditional funding hot spots accelerated during the pandemic as investment ticked up substantially in many states, including Vermont and Montana.

read it now

Share:

Instacart's move to cut valuation a statement on employee talent wars

(Oscar Wong/Getty Images)

In an unusual move, grocery delivery provider Instacart acted on its own initiative to cut its valuation to $24 billion, a markdown of almost 40%. The company took the action to attract talent and retain employees by offering them more reasonably priced stock grants.

The decision to revalue the company was made by management, but Instacart's investors will likely follow suit.

While it is not clear if other companies will make their valuations public, a couple of LPs have told PitchBook they expect to see reduced marks for venture funds at the end of Q1.

Recommended Reads

Advances in gene-editing tech could alleviate livestock suffering. Or they could rocket factory farming into overdrive, with big consequences for animal welfare. [Vox]

Even as the world switches from fossil fuel to greener alternatives, energy insecurity may be here to stay. [The Economist]

Big tech has little choice but to follow the EU's new rules, and companies will need to break their tradition of implementing lax changes if they want to avoid further crackdown. [The Wall Street Journal]

Since yesterday, the PitchBook Platform added:

125

People

36

Companies

See what our data software can do

Quick Takes


	The Daily Benchmark
	2015 Vintage Global Secondaries Funds
	VC Deals
	Firstbase picks up $50M Series B
	Clear Skye raises $14M for identity security
	Spark Capital leads $14M round for Unleash
	Fundraising
	Sequoia to raise $8B+ across four funds
	Investors
	Goldman Sachs, Kirkland & Ellis halt plans with oligarch-linked firm

The Daily Benchmark

2015 Vintage Global Secondaries Funds

Median IRR

15.63%

Top Quartile IRR

26.25%

1.48x

Median TVPI

Select top performers

SG/NMERB Secondary Fund I

Siguler Guff Secondary Opportunities Fund

Savano Capital Partners II

*IRR: net of fees

12 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

VC Deals

Firstbase picks up $50M Series B

Firstbase has raised $50 million in a round led by Kleiner Perkins, with support from investors including Andreessen Horowitz and Forum Ventures. Founded in 2019 and operating in New York and Scotland, the company offers a platform that helps remote teams manage physical office equipment.

View round

View similar company »

Clear Skye raises $14M for identity security

Clear Skye has raised a $14 million Series A co-led by Storm Ventures and Toba Capital. The Emeryville, Calif.-based company is the creator of an identity security and governance platform.

View round

View 5 competitors »

Spark Capital leads $14M round for Unleash

Unleash, the provider of an open-source feature management platform for software developers, has raised a $14 million Series A led by Spark Capital. Based in Oslo, the company plans to use the funds in part to expand its operations in Europe and the US.

View round

View similar company »

Fundraising

Sequoia to raise $8B+ across four funds

The Chinese affiliate of Sequoia is seeking to raise more than $8 billion across four new funds, The Information reported.

View details

View 999 investments »

Investors

Goldman Sachs, Kirkland & Ellis halt plans with oligarch-linked firm

Goldman Sachs and law firm Kirkland & Ellis have halted plans to form a new business with London's Pamplona Capital Management, the Financial Times reported. At least 80% of Pamplona's funds come from sanctioned Russian oligarch Mikhail Fridman's Luxembourg-based investment firm LetterOne, according to the report. Pamplona has announced plans to liquidate every fund where LetterOne had any interest.

View details

View 138 investments »