| Reminder: Don't forget to take our Sustainable Investing Survey, which covers topics like ESG risk factors and impact investing. (You can win prizes!) | | | | | |
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| Caution and retrenching trickle down to privately held companies | | Our research team now offers public tech company valuation guides to help venture and growth investors understand how the public market is affecting valuations for late-stage tech companies. We released the first of these guides this week, focusing on public fintechs and traditional financial companies.
The main takeaway from the report is that valuations of profitable firms have held up quite well, while fast-growth, money-losing businesses have underperformed. Certain investors are likely to become impatient and agitate for change. If valuations remain near current levels, we expect investors to pressure public fintechs to seek new revenue streams, cut costs (several companies have announced layoffs), exit money-losing businesses and even seek an acquirer.
The recent market rerating has pressured some late-stage startups to remain private for longer. Private ownership gives startups the ability to invest in growth over profitability, whereas public companies are typically pressured to achieve positive returns.
We also believe that profit and revenue forecasts have room to decline as some sell-side analysts may be anchoring to optimistic roadshow projections or have not fully integrated the impacts of slower GDP growth and rising rates. A recession would further lower their forecasts.
If you would like the report’s underlying dataset or to discuss public fintech valuations with one of our analysts, email me at james.ulan@pitchbook.com.
We’ll publish valuation guides just like this one every quarter. We expect one focused on mobility tech to drop shortly. Keep an eye out as we expand these reports to our other coverage areas!
| | Thanks,
James Ulan
Lead Analyst, Emerging Technology | | | | | | | |
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The outsized US VC deals that became a theme of 2021 are not being completed as investors take a more cautious approach to the largest deals in the market.
Q2 became the first quarter since Q4 2020 to post less than $77 billion in completed deal value, with just over $62 billion closed. Fundraising topped $120 billion for the second consecutive year, with a strong showing from established fund managers in the first half of the year.
On the exit front, the second quarter was much like the first in terms of exit activity, with the biggest change from the last two years being the complete lack of traditional IPOs, according to a first look at the data from our upcoming PitchBook-NVCA Venture Monitor: | | | | | | Public equities fell again in June, this time coinciding with a fall in many commodities. Central banks continue to fight inflation, causing investor hesitation in public and private markets as recession odds rise.
Meanwhile, corporate bond spreads inch toward stress territory, and US markets are on pace for their worst start to a year in decades. Unicorn creation also declined again, with fewer than 30 being minted in June. However, returns in China and Latin America held silver linings.
PitchBook's latest Global Markets Snapshot breaks down a month of trends in the equity, debt and commodities markets, tracking returns across a range of indexes and sectors. It also includes private markets activity, including major PE and VC deals, IPO performance, and unicorn creation by region. In this monthly digest, we provide the datasets that PitchBook's research team is keeping an eye on as financial markets remain volatile: | | | | | |
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Private fund strategies: spotlight on real estate
Join us for a webinar Thursday detailing the current state of private fund performance and fundraising.
PitchBook analysts Hilary Wiek and Anikka Villegas will discuss dynamics across asset classes and strategies, along with the suspected inflation hedge in the real estate ecosystem and the properties and strategies best suited to the current environment.
Emerging tech highlights for early-stage investors
What are the nascent technologies that will drive growth opportunities in the years to come?
What are the early-stage funding trends for crypto companies and startups building metaverse products?
Our head of Emerging Tech Research hosted a free webinar last week to discuss where top-performing VCs are placing their early bets.
Watch the replay | | | | | |
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Our insights and data featured in the press:
Agtech funding reaches near-record level despite fears of economic downturn. [Emerging Tech Brew]
As the global venture capital market slows, is the US dodging the downturn? [TechCrunch+]
“I don’t think right now that many funds are going to be entering the fundraising market.” [Institutional Investor]
The huge checks and soaring valuations of 2021 are no longer happening: “Those were unsustainable.” [The New York Times]
The momentum for companies to go public has sputtered. In the first half of this year, private companies going public had a combined exit value of $49 billion. That’s down from a record $777 billion for all of last year. [The Wall Street Journal]
If you're a journalist interested in interviewing our analysts or requesting data, contact our PR team. | | | | | |
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Highlights from our other recent research:
Market updates
Thematic research
Emerging Technology Research
Coming next week (subject to change) - 2022 PitchBook Benchmarks
- US PE Breakdown
- PitchBook-NVCA Venture Monitor
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| | Since yesterday, the PitchBook Platform added: | | 440 Deals | 2020 People | 520 Companies | 37 Funds | | | | | | |
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