What is the current state of US venture capital?
What does record dry powder mean for potential dealmaking in the second half of the year?
When might the IPO window open again?
We're hosting our quarterly Venture Monitor webinar on Thursday, featuring a panel of experts discussing the most pressing trends affecting the market.
Register here | | | | | |
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| A midyear assessment of our 2022 US PE outlook | | Many of our predictions for US private equity this year were made amid several tailwinds at the end of 2021: - Dealmaking had eclipsed $1 trillion in total deal value.
- Sponsors listed companies at a record rate and at high valuations.
- Capital quickly flowed back into newly launched PE funds.
Needless to say, the global macroeconomic backdrop in 2022 has experienced a sharp turn.
Inflation is raging as supply chains adjust to pandemic-related shocks, and Russia's invasion of Ukraine further exasperates these issues. Significant market volatility has disrupted PE's previously fervent pace. Thus, many of the predictions we had previously made are not expected to come true in the changed PE landscape. For example, we had expected PE firms to close at least 400 middle-market software deals during the year. While PE appetite for tech during the first half of the year remained healthy despite numerous headwinds, deal activity has likely slowed down enough to fall short of the prediction. The slide in public markets has also created near-impossible conditions for private companies to list publicly, impacting our predictions about PE-backed healthcare provider platform IPOs and more private capital managers going public during 2022. The complexities of the macro environment have created a very different reality for PE than we had anticipated, but we reassessed the landscape in our new research. For additional analysis, click to download our 2022 US Private Equity Outlook: H1 Follow-Up. Feel free to reach out with any questions or feedback, or if you would like to discuss the research. | | | | | | | |
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How has market uncertainty shaped VC valuations?
Our Q2 2022 US VC Valuations Report shows how investor sentiment has—and hasn't—changed over the past quarter, and what that may mean for deal terms, liquidity and more as the year goes on.
Key takeaways from the report include: - Early-stage median pre-money valuations showed signs of contraction, recording their first quarter-over-quarter decline in more than two years.
- Seed-stage investment has held up better than any other stage, with deal counts and sizes remaining elevated and median pre-money valuations up 33% this year over 2021.
- Nontraditional investors have concentrated their more cautious behavior at the top end of the market.
- Only 10 public listings for companies valued at over $1 billion were recorded through June 30, compared with more than 100 in 2021, as the public market climate continues to put pressure on exit valuations.
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Hydrogen Fuel Cells Back in the Spotlight
Once viewed as the future of green cars, hydrogen fuel cell technology has fallen by the wayside as lithium-ion batteries have gained traction as the primary means of powering electric vehicles.
And while many larger corporate and state players have made substantial investments in the hydrogen EV sub-segment, VC activity has remained limited compared with investment into battery-powered mobility solutions.
Our research tracks recent VC dealmaking and explores emerging applications in trucking, aerospace, warehousing, and marine vessels—sectors wherein the climate-friendly fuel has the potential to outperform its gas and electric peers: | | | | | |
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While mobility tech funding cooled off in Q2, last-mile delivery startups held strong and hauled in the most capital of any segment.
Despite market volatility, entrepreneurs and investors have continued to respond to ecommerce's relentless demands with an array of solutions aimed at reorganizing how goods are moved, warehoused, tracked and delivered.
Overall funding in mobility tech fell to $10.5 billion, a 31.9% decrease compared to the first quarter.
Our Q2 Mobility Tech Report analyzes VC trends in the sector and explores investment opportunities that are emerging in battery technology and hydrogen fuel cells for electric vehicles: | | | | | | VC investment in the information security space took a hit in Q2, dropping 44.6% on a quarterly basis to $3.2 billion.
Financial volatility and a paused IPO market have combined to challenge the resilience of the sector—only 13 VC exits were completed last quarter.
Our Q2 Information Security Report dives into the latest data and also highlights emerging opportunities in database protection, anti-phishing platforms and more.
Clients also get access to a full market map of the industry's product categories, from application security to identity management: | | | | | |
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| | | Watch our head of private markets research on CNBC. | | |
Our insights and data featured in the press: - What returns can we expect for PE? When and where might opportunistic buyers look to deploy capital? Our head of private markets research, Dylan Cox, joined CNBC's Street Signs to discuss current trends in the market. [CNBC]
- 3 reasons why crypto venture funding is on track to surpass 2021 despite a market downturn. [Business Insider]
- "There isn't that over-exuberance that was used to characterize 2021 venture capital investing." [Institutional Investor]
- Now that startups are no longer embracing the "growth at all costs" mentality many had last year, investors no longer expect jumps in valuation in subsequent rounds of funding. [Fortune]
If you're a journalist interested in interviewing our analysts or requesting data, contact our PR team. | | | | | |
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One event for your calendar: - Aug. 24: Want actionable guidance on how to navigate ESG efforts? Hosted by Venture Forward, NVCA, PitchBook, and the Nasdaq Entrepreneurial Center, this educational workshop for investors focuses on practical strategies and guidance for taking action. More details here.
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Highlights from our other recent research:
Market updates
Thematic research
Emerging Technology Research
Coming next week (subject to change) - Global Private Market Fundraising Report
- European VC Valuations Report
- Global League Tables
- ETR: Q2 Foodtech Report (sneak peek!)
- Q2 Key Takeaways and Benchmarking for Blackstone and US Public PE Firms (sneak peek!)
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| | Since yesterday, the PitchBook Platform added: | | 384 Deals | 1873 People | 516 Companies | 25 Funds | | | | | | |
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