Sanctions spur VCs to unravel 'toxic' money ties

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The Daily Pitch: VC

April 18, 2022

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In today's Daily Pitch, you'll find:

These are complicated times for Western VC firms with roots in the former Soviet Union—many of their LPs have recent personal or financial ties to the country that invaded Ukraine.

VC-backed exit value in the US reached $33.6 billion in the first three months of 2022, marking an 82.5% collapse from the previous quarter.

Our blockchain market map lays out the NFT landscape, its primary segments and most-well-funded companies.

Today's Top Stories

Anti-Russia sanctions spur VCs to unravel ties to 'toxic' money

(Max Ryazanov/Getty Images)

These are complicated times for Western VC firms with roots in the former Soviet Union. While most of their portfolio companies are not based in Russia, many of their LPs have recent personal or financial ties to the country that invaded Ukraine.

These firms need to be especially vigilant about screening their LPs for recently sanctioned oligarchs and Russian government officials. A handful have identified sanctioned backers among their LPs, says an attorney who represents many Russian-speaking VCs and tech founders active in Silicon Valley.

Investors who may be sanctioned in the future are now being approached by other investors offering to buy out their LP stakes—sometimes at deep discounts. Service providers, such as Silicon Valley Bank, are also vetting firms with Russian roots, said Alexander Galitsky, co-founder and managing partner at Almaz Capital.

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VC exit activity cools off in Q1 amid volatile economic climate

(StratosGiannikos/Getty Images)

Venture-backed exit value in the US reached $33.6 billion in the first three months of 2022, marking an 82.5% collapse from the previous quarter, according to the latest PitchBook-NVCA Venture Monitor.

"The longer the IPO window stays closed, the more number of fresh unicorns and late-stage companies stack up, which can clamor into the public markets later on and put stress on the system," said Kyle Stanford, a senior analyst at PitchBook.

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A message from CohnReznick

Private equity's 5-year sprint to value creation

With hold periods hovering around 5 years, treat value creation as more like a series of sprints rather than a marathon. Private equity investors and management teams stand to lose potential return if they can't get out of the starting blocks immediately post-close. Investors can increase their speed of execution—and thus potentially boost profits and returns—by identifying key value creation sprints during diligence. Do you need to fill gaps in the business's management team, optimize pricing, develop a more effective salesforce, build resilience into the supply chain? The answer may be a resounding "yes" to all. Download this infographic from CohnReznick's Value Creation team for 14 sprints to build into your strategy to get your next acquisition off to a fast start.

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Market Map: VCs rush to collect NFT startups

(hapabapa/Getty Images)

First it was crypto trading, then decentralized finance, and now NFTs—venture capitalists can't seem to get enough of the next hot thing on the blockchain.

This market map lays out the NFT landscape, its primary segments and most-well-funded companies.

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Micro-funds proliferate as everything else in VC gets bigger

(PM Images/Getty Images)

One of the biggest trends in VC fundraising has been the rise of the mega-fund, as increasingly large vehicles come to dominate the storyline. US VC funds amassed more than $129 billion last year, and the total came predominantly from a record number of vehicles raising at least $500 million.

Yet micro-funds, meaning those of $50 million or less, have adapted to the changing landscape, setting their own records in 2021 and carving out new opportunities for LPs, firms and startups to access the venture market like never before. Our recent analyst note tracks the growth of these vehicles and what it might mean for deal sizes, investment strategies and returns.

read it now

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Blackstone, Benetton eye Europe's largest take-private ever with Atlantia bid

(NurPhoto/Getty Images)

Blackstone and the billionaire Benetton family have launched a takeover bid for Atlantia that gives the infrastructure group an equity value above $20 billion.

The deal would mark the largest take-private on record of a European-listed company. Public-to-private buyouts in the region reached record levels last year, and as the risk of a recession rises, such deals are likely to be a standout theme in 2022.

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Recommended Reads

China cracked down on Meituan, but now it needs the food delivery giant to feed Shanghai's citizens. [Fortune]

From Peter Thiel to Marc Andreessen, crypto's supporters like touting the technology's libertarian ideals. But is the blockchain appealing at either end of the political spectrum? [The Economist]

Why strategists at BlackRock are challenging traders' bets about the Fed's plans for the year to come. [Bloomberg]

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Quick Takes


	The Daily Benchmark
	2020 Vintage North American PE Funds
	VC Deals
	Be Bio raises $130M
	Filevine locks in $108M Series D
	Obsidian Security picks up $90M
	Twingate secures $42M
	GridX nabs $40M
	Polychain leads $22M seed round for Nomad
	Compt rakes in $13M

The Daily Benchmark

2020 Vintage North American PE Funds

Median IRR

17.81%

Top Quartile IRR

45.67%

1.09x

Median TVPI

Select top performers

Lindsay Goldberg V

Dyal Capital Partners V

General Catalyst Group X—Growth Venture

*IRR: net of fees

64 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

VC Deals

Be Bio raises $130M

Be Bio has raised a $130 million Series B led by Arch Venture Partners. Based in the Boston area, the company's cellular medicines are designed to treat cancer, rare diseases and other serious conditions.

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Filevine locks in $108M Series D

Filevine has raised $108 million in a round led by StepStone Group. Based in Salt Lake City, the company is the developer of a legal work platform designed to help law firms manage documents, communicate with clients and more.

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View 34 competitors »

Obsidian Security picks up $90M

Obsidian Security has raised a $90 million Series C co-led by Menlo Ventures, Norwest Venture Partners and IVP. The California-based company is the developer of a cybersecurity platform for SaaS applications.

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View 119 competitors »

Twingate secures $42M

Cybersecurity startup Twingate has raised a $42 million Series B led by Bond Capital. The Bay Area-based company is the developer of a zero-trust security platform; the new funding brings its total capital raised to $67 million.

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GridX nabs $40M

GridX, the developer of an enterprise rate platform designed to help energy suppliers develop products and manage operations, has raised $40 million in a round led by Energy Impact Partners.

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Polychain leads $22M seed round for Nomad

Nomad has raised roughly $22.4 million in seed funding led by Polychain Capital. Based in the Bay Area, the company uses blockchain interoperability to operate a cross-chain messaging protocol.

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Compt rakes in $13M

Compt has raised a $13 million Series A led by Battery Ventures. The Boston-based business offers a platform to help companies provide employee perks.

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