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In today's Daily Pitch, you'll find: - Our latest analyst note explores how economic headwinds could make nontraditional VCs slow their pace—and deflate ballooning deal values.
- The value of deals led by Tiger Global has declined significantly in recent months as the firm shifts its focus to writing smaller checks at earlier stages.
- VC investment in AI and machine learning slumped in line with the market in Q1, but some notable subsegments remain resilient.
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| Nontraditional VCs react to market headwinds | | Nontraditional investors have flooded into the US venture market over the past few years, with more than 4,000 such institutions making at least one deal in 2021 alone. These investors, which include asset managers, corporate VCs, PE firms and sovereign wealth funds, deploy capital into venture with widely different strategies and return profiles.
Our latest analyst note explores how economic headwinds could make each of these investor types slow their pace, but for equally varying reasons. Such a pullback may take some of the air out of the ballooning VC deal values of recent years. | | | | | | | | | Tiger Global pumps the brakes on VC deals | |  | | (hachiware/Getty Images) | | | The onetime champion of bigger-is-better VC deals is catching its breath after more than a year of fast-paced check writing.
The value of deals led by Tiger Global has declined significantly in recent months as the firm shifts its focus to writing smaller checks at earlier stages. The move reflects a growing skepticism among large, late-stage investors that could have ripple effects in the VC ecosystem. | | | | | | | |
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| A message from Allvue Systems | | |
| Private equity dry powder hits new highs (and brings old challenges) | | As dry powder continues to fuel growth in private equity, some fund managers are feeling the challenge of trying to identify the best opportunities fast enough. Having so much committed capital has created a delicate balancing act: As the amount of dry powder has risen, the time to collect it has compressed. Plus, limited partners expect their investment to be committed in a timely manner, and with trillions of dollars on the sidelines, competition to find the next unicorn is tougher than ever.
How has dry powder grown? What are the risks of too much dry powder? And what can GPs do to stay balanced?
Learn the answers to these questions and more in this article from Allvue Systems. | | | | | | | |
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| Breakthrough AI innovations stand out amid chillier market conditions | | VC investment in AI startups slumped around 21% quarter-over-quarter to $23.9 billion in Q1. However, the total remained in line with quarters prior to Q4 2021 and median late-stage valuations rose more than 11% to $100 million.
While most of the categories within AI and machine learning are on pace to decline in VC funding this year, standout sectors including accounting automation, autoML, genetic analytics and supply chain optimization continued to grow.
On the exit front, PitchBook analysts predict that an uptick in AI mega-exits will be pushed out until market conditions improve and acquirers can bear the high operating costs of building sophisticated AI models.
Our latest AI & ML Emerging Tech Research update deep dives into the vertical's investment activity and trends, comprehensively assessing emerging opportunities in conversational AI, silicon photonics and revenue operations. | | | | | | | | | PE fund performance sinks as pandemic boost fades | |  | | (sakchai vongsasiripat/Getty Images) | | | A tighter policy environment is putting downward pressure on risk assets and causing PE returns to normalize after several standout quarters.
In Q3 2021, global PE fund returns dropped to 6.8%, the strategy's lowest quarterly IRR since the pandemic rocked markets in Q1 2020. Preliminary data from Q4 shows that further declines may soon follow. | | | | | | | | | | Companies kept alive by cheap and plentiful debt are now facing a reckoning as the borrowing landscape shrinks. [Bloomberg]
A look at median compensation across 275 companies in the S&P 500 index in 2021. [The Wall Street Journal]
As our global supply chains grow, what can we gather from the junk that washes up on shore? [The New Yorker] | | | | | |
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| | Since yesterday, the PitchBook Platform added: | | 410 Deals | 1733 People | 592 Companies | 9 Funds | | | | | | |
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| 2011 Vintage Global Debt Funds | | | | | | |
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| Churchill brings on Mickey Weatherston | | | | | | |
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| | | Mohalla Tech, the parent company of social media app ShareChat, has raised $300 million from investors including Alphabet, Temasek and India's Times Group, Reuters reported. The round values the Bengaluru-based company at roughly $5 billion. | | | | | | | Seemplicity picks up $32M | | | Seemplicity has raised a $26 million Series A led by Glilot Capital Partners in addition to $6 million in seed financing led by S Capital. Based in Tel Aviv, the company is the developer of a productivity platform designed to help security teams automate processes and manage risk. | | | | | | | | | Vendia has raised a $30 million Series B led by NewView Capital, TechCrunch reported. The company offers a blockchain-based platform designed to help businesses share their code and data in real time. | | | | | | | | | Utopia Labs has raised a $23 million Series A led by Paradigm. The company's operating system helps decentralized autonomous organizations, or DAOs, manage payments, expenses and financial reporting. | | | | | | | Synaptic secures $20M Series B | | | Synaptic has raised $20 million in a round led by Valor Equity Partners. The Indian company provides investors with data on public and private companies including website traffic, product reviews, search trends and more. | | | | | |
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| | | | | | | | Blackstone closes in on $5B Advarra deal | | | Blackstone is in talks to acquire clinical research company Advarra from Genstar Capital, Bloomberg reported. The deal would value the Maryland-based company, which Genstar originally acquired in 2019, at around $5 billion. | | | | | | | Ultima Genomics exits stealth with $600M | | | | | | | | EW to acquire women's healthcare specialist | | | Private equity firm EW Healthcare Partners has agreed to acquire women's healthcare company TherapeuticsMD for roughly $177 million. EW will pay $10 per TherapeuticsMD share, a 367.3% premium over the company's closing share price on Friday. | | | | | | | Sun Capital folds in Italy's Tenax | | | Sun Capital Partners has completed the acquisition of Tenax, a family-owned manufacturer of products used for the treatment of natural stone, engineered stone and ceramic tiles. Terms of the private transaction were not disclosed. Tenax was established in 1956 near Verona, Italy, and has since gone international with subsidiaries in the US, Spain, Brazil, Turkey, India and China. | | | | | |
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| Don't miss our upcoming webinar | | The investing environment has fundamentally shifted in the past several months, with inflation at a 40-year high, the Fed tightening monetary policy and growing fears of an economic recession.
In this webinar, our analysts will discuss the broader macroeconomic backdrop, how it has influenced the recent volatility and sell-off in public equity markets, and what it means for private markets now and going forward. The webinar will be held June 7 at 8 a.m. PT/11 a.m. ET.
Register now | | | | | | | |
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| Bonfire Ventures collects $230M+ across two funds | | | Bonfire Ventures has raised $168 million for its third core seed fund and $63 million for its second opportunity fund. Founded in 2017, the California-based VC firm invests in seed-stage B2B software companies. | | | | | | | Hannah Grey wraps up debut fund | | | Denver-based VC firm Hannah Grey has closed its first fund on $51.6 million, TechCrunch reported. The vehicle has already been used to invest in 13 companies, including edtech startup Subject and Wave, the provider of an emotional health platform. | | | | | |
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| GlaxoSmithKline to acquire Affinivax for up to $3.3B | | | UK-based GlaxoSmithKline has agreed to buy biopharmaceutical company Affinivax. The group will pay $2.1 billion upfront and up to $1.2 billion dependent on development milestones. Boston-based Affinivax develops vaccines for diseases including pneumonia, meningitis and bloodstream infections. | | | | | |
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