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| In today's Daily Pitch, you'll find: | | | | | |
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| How inflation, monetary tightening and volatility are impacting PE and VC | |  | US Federal Reserve Chairman Jerome Powell
(Jim Watson/Getty Images) | | | Inflation is running much higher than the Fed's target of 2%, short-term rates are rising, and market expectations for further tightening are increasing.
Along with supply chain constraints and geopolitical turmoil, these dynamics have caused a decline in valuations and a rotation away from stocks with high implied growth rates. Most major stock indexes are down by double digits since the start of the year, and the performance of newly public VC-backed companies suggests a disconnect between the private and public markets that's difficult to ignore.
PitchBook analyst Andrew Akers explores how the current macroenvironment is affecting the private markets and what economic scenarios could play out. | | | | | | | | | | Market Map: Mobility tech funding shifts gears | |  | | (iStock/Getty Images) | | | The COVID-19 pandemic has shifted trends in the mobility tech sector. Ridehailing services are experiencing a decline in demand while home delivery companies have grown rapidly amid changing consumer habits.
Despite short-term disruptions, the sector is making steady progress toward an autonomous future. Our mobility tech market map has details on the hardware that's making it all possible. | | | | | | | |
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| BMO Sponsor Finance transaction trends: Dental multiples, delayed draw term loans | | In the current issue of Transaction Trends, BMO Sponsor Finance provides insights into purchase multiples for dental service organizations, the resiliency of the industrials sector in light of macro factors, and the underlying growth trends for residential and commercial HVAC companies.
To learn more, read the full issue of Transaction Trends. You can also contact Stephen R. Isaacs, Managing Director and Head of BMO Sponsor Finance, at stephen.isaacs@bmo.com. | | | | | | | |
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| US venture capital valuation trends in four charts | |  | | (Drew Sanders/PitchBook News) | | | After a frenzied 2021, the venture industry is waking up to a sobering reality of economic and political volatility.
Here's a closer look at four key trends from our Q1 US VC Valuations report that depict how deal sizes and valuations are reacting to market headwinds, rising interest rates, geopolitical tensions and more. | | | | | | | | | | Global fund performance holds strong, but a decline could be on the horizon | | One-year horizon IRRs through Q3 2021 remained incredibly strong despite another wave of COVID-19 during the quarter that raised concerns about a pullback in performance. Returns to date indicate that the majority of private market funds have been able to pivot to handle pandemic-related challenges.
Our latest Global Fund Performance Report uses data through Q3 2021 as well as some preliminary Q4 figures to provide a comprehensive look at the returns of various fund strategies. We also examine why public market comparisons may lead to disappointing private markets performance in coming quarters. Key highlights of the report include: - PE returns cooled in Q3 2021, dropping to 6.8% amid a quickly changing macroeconomic backdrop. That figure represents the strategy's lowest quarterly IRR since Q1 2020.
- Real estate hit a 17.2% one-year horizon IRR, its best one-year performance since 2014, with preliminary Q4 IRR data suggesting a bright future for the asset class.
- Private debt performance waned drastically during the quarter, but still remains strong on an annual basis, though deceleration of these figures is anticipated in coming quarters.
- Secondaries funds stepped up to a new level of fundraising in 2020 and experienced a substantial uptick in performance during 2021, notching a one-year horizon IRR of 52.5%.
| | | | | | | | | | Europe's giants: Five PE funds made up half of the region's fundraising in 2021 | |  | | (John Lamb/Getty Images) | | | Mega-funds dominated the European private equity landscape in 2021, with just five vehicles accounting for nearly half of the capital raised.
While we have yet to see the same number of funds materialize in 2022, the previous year left the biggest players with a mountain of dry powder. We look at the largest funds raised in 2021, along with capital raises that are still in motion. | | | | | | | | | | If Elon Musk decided to walk away from Twitter, he'd likely be facing much more than a simple $1 billion termination fee. [CNBC]
Many investment managers are working to distance themselves from oil and gas assets, but The Carlyle Group is committed to a different strategy. [Financial Times]
While more than 40 million people left their jobs last year, they didn't leave the workforce altogether. Many traded up for better-paying gigs. [The New York Times] | | | | | |
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| | Since yesterday, the PitchBook Platform added: | | 38 Deals | 193 People | 38 Companies | 5 Funds | | | | | | |
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| 2012 Vintage European PE Funds | | | | | | |
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| Gusto raises new funds in extension round | | | HR tech startup Gusto has raised extension funding for its Series E, TechCrunch reported. The company landed $175 million for the round last year, reportedly valuing it at nearly $10 billion. Launched in 2012, Gusto helps over 200,000 businesses throughout the US manage their payroll, benefits and more. | | | | | | | | Tidio collects $25M Series B | | | Poland-based Tidio has raised a $25 million Series B from investors including PeakSpan Capital and Inovo Venture Partners. The startup's platform combines analytics, live chat apps and AI-powered chatbots to help businesses manage customer service. | | | | | | | | StartPlaying records $6.5M in new financing | | | StartPlaying has raised a $6.5 million seed round led by Andreessen Horowitz. The San Francisco-based startup offers an online platform that helps players find tabletop role-playing games and professional game masters. | | | | | |
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| Thoma Bravo takes Bottomline private for $2.6B | | | Thoma Bravo has completed its take-private of financial technology provider Bottomline Technologies in a deal worth approximately $2.6 billion. Bottomline handles business payments through its offices across the US, Europe and Asia-Pacific. | | | | | | | | GTCR invests in PathGroup | | | GTCR has made a majority investment in PathGroup Holdings, a Nashville-based operator of independent laboratories. PathGroup provides anatomic pathology, digital pathology, molecular diagnostic and clinical testing services to physician groups and hospital systems across the US Southeast and Midwest. | | | | | | | | PE-backed Modern Aviation lands three FBOs from Superior Aviation Company | | | | | | | | | EQT to partner with Redwood Capital Group | | | Sweden's EQT has agreed to acquire Redwood Capital Group, a Chicago-based residential investment management firm. Founded in 2007, Redwood owns 30 multifamily properties in states including Arizona, Florida, Georgia and Texas. | | | | | |
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| EQT delays $22B Galderma IPO | | | EQT has delayed its $22 billion IPO plans for Swiss skincare company Galderma following continued market volatility, Reuters reported. The listing, which was set to take place earlier this year, has been pushed back to fall or early next year. | | | | | |
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"The angel and seed market has launched into 2022 riding the wave of momentum created over the past couple years. Deal sizes continued to show strength in the face of market headwinds—which include rising interest rates, high inflation, and geopolitical tension due to the war in Ukraine—with the median size increasing for both deal types in Q1."
Source: PitchBook's Q1 2022 US VC Valuations Report | | | | | |
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