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In today's Daily Pitch, you'll find: - Q1 fundraising totals could indicate a slowdown, as LP allocations fight to keep pace with GP aspirations, according to our new Global Private Fund Strategies Report.
- Our latest analyst note explores how startups in 11 tech verticals, from climate tech to blockchain, will respond to an increasingly tumultuous macro environment.
- Stormy conditions in the crypto market have not deterred Andreessen Horowitz's bullish view as it closes a $4.5 billion crypto fund.
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| Forecasting how 11 tech verticals will weather market turmoil | | As supply shortage shocks ripple across the globe and threaten a recession, investors will be looking to reduce risk across their portfolios. Pressure to grow at all costs should yield to a drive toward profitability. Meanwhile, the focus will fall on those startups working to solve critical shortages and create energy and supply chain independence, possibly reorienting global trade and consumption patterns permanently.
Our latest analyst note explores how 11 technology verticals, from climate tech and foodtech to blockchain, information security and more, could be impacted by this macro environment. Key takeaways include: - Countries and companies will re-evaluate their dependence on pan-pacific trade and far-flung suppliers, allowing supply chain tech startups to offer new solutions.
- Higher energy prices will accelerate electric vehicle adoption, but higher materials costs and supply chain issues will stymie production.
- Geopolitical instability will encourage information security adoption, reinforcing the vertical's position at the top of enterprise priority lists.
- Lithium mining service providers and new Western battery companies are likely to come out on top of the push for supply chain independence.
| | | | | | | | | | Lenders flex their power in private debt deals in face of growing market risks | |  | | (tiero/Getty Images) | | | Market turmoil is squeezing corporate borrowers that took on high levels of floating-rate debt in recent years. As rates rise, they will face higher interest expense and pressure on cash flows, a sharp reversal after years of inexpensive borrowing.
While companies had been enjoying the fruits of higher valuations and relatively easy lending terms, the pendulum is swinging and debt investors are turning cautious about borrowers' ability to pay off loans in the face of souring economic conditions.
However, some lenders are looking to capitalize on the new situation, which is likely to lead to more deals that offer higher spreads, investor-friendly structures and a potential pickup in private debt transactions for non-sponsor-backed companies. | | | | | | | |
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| A message from SS&C Intralinks | | |
| Global Cybersecurity M&A: Risks and opportunities in 2022 | | The cybersecurity industry is uniquely positioned in the current macro environment, with geopolitical tensions and a growing digital population exacerbating the need for protection. M&A in the industry surged in 2021 and persevered in Q1 2022, despite tougher market conditions. Exit activity cooled in the early part of 2022 as war erupted in Ukraine and inflation continued to rise, coming off a record year in 2021 when the public market bull run created an especially IPO-friendly environment.
SS&C Intralinks' Global Cybersecurity M&A report discusses dealmaking in this dynamic industry, which is poised to grow in the years to come as the economy continues to digitize.
Read it here | | | | | | | |
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| Fundraising totals slow, while growing fund sizes push LPs to their limits | | Q1 private fundraising figures were a little less than 25% of the total capital raised in 2021, which could indicate a fundraising slowdown. Evidence shows that private market fund managers may have finally pushed fundraising too far for the taste of LPs, raising much larger funds more quickly than at any point in the past.
Fund sizes are increasingly growing. In Q1, those with prior funds in a fund family increased the size of their next vehicle 82% of the time. If LPs' portfolio growth is not keeping up with GPs' aspirations, their allocations might not keep up either, causing fundraising cycles to extend if managers can't find new sources of capital commitments.
Our latest Global Private Fund Strategies Report breaks down key fundraising, cash flow and dry powder metrics across strategies including private equity, venture capital and real estate. The report also features a spotlight on emerging managers. | | | | | | | | | | Coinbase's $5B bonanza is exhibit A as a16z doubles down on crypto funding | |  | | (Robert Nickelsberg/Getty Images) | | | Andreessen Horowitz has launched a $4.5 billion crypto fund despite a global retreat from cryptocurrencies, risky stocks and NFTs.
Why the confidence? One likely reason: The firm's bet on Coinbase allowed it to dispose of $5 billion worth of stock in the form of share sales and distributions to LPs last year, regulatory filings show. | | | | | | | | | | State-backed JIC intervenes on Toshiba PE buyout | |  | | (Kazuhiro Nogi/Getty Images) | | | State-owned Japanese Investment Corporation has thrown its hat into the ring for a potential $19 billion takeover of beleaguered behemoth Toshiba.
The Tokyo-listed conglomerate, which has also received interest from PE suitors like Bain Capital, Blackstone and KKR, has suffered a series of corporate governance failures over the years. Now, it's under pressure to sell, and a deal with JIC could keep a prized Japanese asset out of foreign hands. | | | | | | | | | | Proton CEO Andy Yen talks privacy, encryption and how the company hopes to compete with the likes of Google. [Wired]
Cryptocurrency exchanges and custodians say insurance could help them in their quest for wider adoption by mainstream investors. [The Wall Street Journal]
Abandoned croplands require decades or centuries of idleness to reach their potential for absorbing carbon dioxide, and they're not being given enough time. [Bloomberg] | | | | | |
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| | Since yesterday, the PitchBook Platform added: | | 413 Deals | 1890 People | 527 Companies | 25 Funds | | | | | | |
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| 2018 Vintage Global PE Funds with more than $1B | | | | | | |
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| Motive brings in $150M Series F | | | Motive (formerly KeepTruckin) has raised $150 million at a $2.85 billion valuation in a round co-led by Insight Partners and Kleiner Perkins. Based in San Francisco, the company offers a workflow automation platform that's designed to help enterprise customers manage physical operations. | | | | | | | | Nowports picks up $150M Series C | | | Nowports has raised $150 million at a $1.1 billion valuation in a round led by the SoftBank Latin America Fund. The Mexico-based logistics company facilitates import and export processes for Latin American companies. | | | | | | | | Finn drives off with $110M | | | Finn, the operator of a car subscription platform, has raised a $110 million Series B led by Korelya Capital. The startup also announced the opening of its US headquarters in New York and plans to use the funds to expand operations across Europe and the US. Finn is now valued at over $500 million. | | | | | | | | Terremoto Biosciences launches with $75M | | | Terremoto Biosciences has raised a $75 million Series A led by OrbiMed and Third Rock Ventures. Based in the Bay Area, the biotech company uses covalent chemistry to develop small molecule medicines. | | | | | | | | Zip nabs $43M at $1.2B valuation | | | Zip has raised a $43 million Series B led by Y Combinator, with support from from CRV and Tiger Global. The funding values the company, founded in 2020, at $1.2 billion. Zip's intelligent purchase-request platform is designed to help employees make business purchases. | | | | | | | | Poultry vaccination provider Targan raises $35M | | | | | | | | | NeuraLight banks $25M in Series A funding | | | NeuraLight, a developer of digital evaluation of neurological disorders, has raised $25 million in new financing. Koch Disruptive Technologies reportedly led the round for the company, which uses eye movement tracking to improve neurological diagnosis, patient monitoring, clinical development and precision care. | | | | | |
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| TPG, CD&R to take Covetrus private for $4B | | | TPG and Clayton, Dubilier & Rice have struck a deal to take veterinary software company Covetrus private for roughly $4 billion. The duo will pay $21 a share for Maine-based Covetrus. The deal is expected to close by the end of 2022. | | | | | | | | PE-backed WilliamsMarston lands tax consultant | | | | | | |
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| PitchBook Webinar: VC interest and digitization continue to drive foodtech | | PitchBook will be hosting a webinar on May 31 to discuss foodtech's continued momentum relative to our Q1 2022 Foodtech Report. Our analyst will examine the sector's continued VC activity and evolution toward digitization led by app-based delivery models, consumer behaviors and more.
Key takeaways include: - Food ecommerce and mobile commerce continue to attract venture capital funding.
- Online grocers tap into cost-saving solutions for consumers as grocery prices skyrocket.
- Meal kits regain popularity as consumers look for new and novel ways to prepare meals at home.
Click here to register for the webinar now. If you can't tune in to the live event, RSVP anyway and we'll send you a recording afterward. | | | | | | | |
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| NEA eyes $5B+ across two funds | | | NEA is planning to raise more than $5.1 billion across two funds. The firm has already secured nearly $2.9 billion for its 18th flagship fund, according to an SEC filing. The other vehicle, dedicated to growth equity, has raised about $2.3 billion of its $3.7 billion target, Axios reported. | | | | | | | | KKR closes first Asia credit fund on $1.1B | | | KKR has closed its first Asia credit fund on $1.1 billion. The fund will focus on conducting privately originated credit investments in the Asia-Pacific region. | | | | | | | | FFL Partners raises $900M+ for fifth fund | | | FFL Partners has closed its fifth namesake fund and related vehicles with more than $900 million, exceeding a $750 million target. The firm focuses on investments within the healthcare and tech-enabled services sectors. | | | | | | | | SYN Ventures reels in $300M for Fund II | | | SYN Ventures has closed its second namesake fund on $300 million. The Florida-based firm targets investments across cybersecurity, industrial security, national defense, regulatory compliance and other related industries. | | | | | |
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| SEC to further prevent 'misleading or deceptive' fund names | | | The SEC has proposed a new set of rules that would prevent "misleading or deceptive" fund names. Currently, investment firms with names that suggest a particular investment focus are required to invest at least 80% of the value of their assets in those areas. The new amendment would expand this rule to more investors, namely those with environmental, social or governance strategies and those with fund names that include terms such as "growth" or "value." | | | | | |
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"The lag seen in private data will keep much of the immediate impact of public volatility and increases in interest rates out of Q1's overall figures. In late-stage valuations, however, the impact of these headwinds is showing where we expected. The average late-stage pre-money valuation decreased from the highs of 2021, along with the top-decile figure."
Source: PitchBook's Q1 2022 US VC Valuations Report | | | | | |
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