Sunday, March 6, 2022

How COVID-19 changed the internet

Plus: US VCs cross the pond, the big five PE firms break records, DeFi & Web3 lead emerging tech & more
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The Weekend Pitch
March 6, 2022
Presented by RSM
(Drew Sanders/PitchBook News)
Two years into the pandemic, the meteoric growth of platforms that connect people online is petering out.

Not long ago, the appetite for spending time in new digital spaces seemed limitless. Tech companies that offered ways to gather virtually found that users were willing to try almost anything. That's no longer the case. From Zoom to Roblox, Clubhouse to Peloton, new users are increasingly hard to come by.

For our purposes, let's call these pandemic platforms. Since March 2020, these popular services have ushered in a wave of game-changing experimentation that has laid the groundwork for tomorrow's digital society. Along the way, entrepreneurs and tech executives have learned what people love–and hate–about living online.

This is the Weekend Pitch, and I'm James Thorne. You can reach me at james.thorne@pitchbook.com or on Twitter @jamescthorne.
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A message from RSM
Here to stay: Workforce issues of today and tomorrow
The way that businesses conduct operations has fundamentally changed. Workers increasingly prefer and request to telecommute; changing health mandates demand flexibility from employers and employees; and the labor shortage has made recruiting and retaining talent a critical challenge.

Private equity leaders and their portfolio companies need to—and can—adapt to meet these challenges. RSM's Middle Market Business Index special report, "Changing work patterns in the middle market," details the experiences of over 400 middle-market executives. Read the report for insights, practical tips and predictions about:
  • Managing remote workers
  • Maintaining productivity
  • Attracting and retaining top talent
  • And more
Download the report
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Quote/Unquote

Orlando Bravo (Patrick T. Fallon/Getty Images)
"'Growth at all costs' has ended and whoever is still investing and operating in this way is going to be surprised. … And think about it, it's so basic. How could you create a company, and a large company over time, where the societal resources that you use for production way exceed the output?"

Orlando Bravo, founder and managing partner at Thoma Bravo, in an interview with CNBC.

Thoma Bravo's prolific tech investment has led the way in PE software deals in recent years, including five of the 10 largest global software buyouts in 2021.

Deal Flow

In 2021, US VCs took part in more than 2,200 rounds for European and Israeli startups, with a total deal value of €70.7 billion, up 194% compared to 2020.

The surge in dealmaking involving US-based investors is contributing to a rise in valuations and round sizes, and the trend is expected to accelerate.

Did you know ...

(Vertigo3d/Getty Images)
… That in 2021, the five big public PE firms broke records on nearly every important metric—AUM, fundraising, fee revenue, total profits and more?

Apollo Global Management, Blackstone, The Carlyle Group, KKR and Ares Management, had a phenomenal year, and other public firms posted similarly impressive results. Our latest Analysis of Public US PE Firm Earnings breaks down the key trends from Q4.

Datapoints

Funding for Web3 & DeFi companies has surged among the emerging technologies poised for growth, and the space has been marked by a rise in massive rounds.

Our Q4 2021 Emerging Tech Indicator, which tracks seed- and early-stage deals from 15 top VC firms, recorded 26 deals of at least $100 million in Q4 across emerging tech market segments, compared with 34 for the first nine months of the year.
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Last month, China and Russia declared their friendship had "no limits." Now China and President Xi Jinping are having second thoughts. [The Wall Street Journal]

Geopolitical risk has clear impacts on global trade, security and political relations. How does it affect innovation? [Harvard Business Review]

Photographs from the first two years of a world transformed by COVID-19. [National Geographic]

A reporter has been traveling to Saudi Arabia for three years, trying to understand who Crown Prince Mohammed bin Salman is. [The Atlantic]

In 1945, a father and his young son set out across the Bering Strait, fleeing Soviet Russia for a better life in America. Neither knew how perilous their journey would become. [The Atavist]
This edition of The Weekend Pitch was written by James Thorne and Ryan Prete. It was edited by Alexander Davis and Kate Rainey.

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