Europe's VC valuations continue upward march

Public PE firms keep hot streak going; verticals with highest valuation jumps; gaming industry piles into Forte's $725M raise; Icertis eyes $5B value
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The Daily Pitch: VC, PE and M&A
November 15, 2021
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In today's Daily Pitch, you'll find:
  • An analysis of the latest record-breaking quarter for Europe's venture-backed companies.

  • A look at which US venture verticals are garnering massive step-ups in valuation.

  • The five largest public PE firms in the US had a banner Q3, yet the valuation gap among them is widening.
Today's Top Stories
Europe's VC valuations continue marching upward
The European VC ecosystem has smashed records across the board in 2021—and valuations are no exception. Bullish VC investors, outsized rounds across all stages and a fervent exit environment have helped push valuations sky high.

Our Q3 European VC Valuations Report breaks down the latest record-breaking quarter in venture capital, including data on valuations by sector, region and investor type. Among the takeaways:
  • VC deals with nontraditional investors have risen in both value and volume, becoming one of the key drivers behind Europe's record round sizes and valuations.

  • Late-stage pre-money valuations in the software sector topped €27 million in Q3, nearly double 2020's record figure.

  • The VC ecosystem appears to be coping well in the post-Brexit era, as last quarter's valuations in the UK & Ireland paced above 2020's numbers at all stages.
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Which verticals had the highest valuation jumps in 2021
(sesame/Getty Images)
In a year where just about everything in venture capital is going up and to the right, some verticals are heating up more than others in terms of valuation growth.

See our 2021 US valuation step-up rankings.
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The good times keep getting better for public PE firms
(champc/Getty Images)
The five largest US public PE firms had a phenomenal showing in Q3, reporting robust figures across all their metrics. The group of Apollo Global Management, Ares Management, Blackstone, The Carlyle Group and KKR also all traded up and outperformed the S&P over the past 12 months.

In this goldilocks period for large alternative asset managers, everything seems to be going right, according to our latest analyst note. Yet the valuation gap among these five is widening, with some trading down to a lower distributable earnings multiple.
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Gaming industry piles into Forte's $725M raise
(Fabio Principe/Getty Images)
Blockchain gaming platform developer Forte has added $725 million to a war chest built on capital from global gaming publishers.
  • The Series B was led by hedge fund Kora Management and Sea Capital, the corporate VC arm of Singaporean gaming and consumer tech conglomerate Sea. Other gaming backers in the round included Animoca Brands, Huuuge, Overwolf and Playstudios.

  • In May, the company raised $185 million at a $1 billion valuation in a round led by Griffin Gaming Partners.

  • Gaming investors see a future in which digital goods are traded on in-game marketplaces secured by the blockchain, creating new revenue streams for publishers, developers and players.

  • Forte's platform allows game developers to embed crypto features such as non-fungible tokens and wallets. The startup also handles anti-money laundering checks, intellectual property security and other compliance tasks.

Related read: A16z charts course to own the NFT market
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EIF tech head warns of European VC bubble
(Courtesy of the European Investment Bank)
The European Investment Fund's head of technology investments has raised concerns that European VC could be heading for a bubble. The continent has seen record numbers of venture investments this year, and with that, valuations have soared to all-time highs.
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Recommended Reads
Why Chinese crypto players are seeking a new home base in Singapore. [Protocol]

As the Christmas season approaches, one of the oldest wooden toymakers in Vermont says the labor shortage is creating a bigger challenge than global supply chain disruptions. [The Washington Post]

The 10,000 faces that launched an NFT revolution. [Wired]
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Quick Takes
  The Daily Benchmark  
  2020 Vintage Global VC Funds  
  A message from eFront  
  eFront Insight Research Quarterly Report—Q1 2021  
  VC Deals  
  Icertis eyes $5B valuation  
  Applied Intuition hits $3.6B valuation  
  Ankyra Therapeutics raises $45M Series B  
  Ometria brings in $40M  
  PE Deals  
  Riveter lands Healthy Lunch Box  
  New State Capital stakes recycling provider  
  Orangewood acquires Taco Bell franchisee  
  Exits & IPOs  
  TorQuest Partners eyes sale of Cando Rail & Terminals at $800M value  
  Lulu's Fashion Lounge raises $92M in IPO  
  KKR hands off Audiobooks.com to Storytel  
  Fundraising  
  HPS targets $9.5B for fifth junior debt fund  
 
 
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The Daily Benchmark
2020 Vintage Global VC Funds
Median IRR
18.12%
Top Quartile IRR
43.21%
1.00x
Median TVPI
Select top performers
Ethos Fund I
Northzone Conviction I
Target Global Early Stage Fund II
*IRR: net of fees
52 Funds in Benchmark »
Check out the latest version of PitchBook Benchmarks
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A message from eFront
eFront Insight Research Quarterly Report—Q1 2021
The latest quarterly report from eFront brings together two complementary sets of benchmarks for the global private equity market as of Q1 2021: fund-level transaction-based metrics and deal-level performance statistics derived from individual deal financials.

The eFront Insight Research Quarterly Report delivers only a selection of performance benchmarks to its readers, but clients have access to the eFront Insight Quarterly Data Pack catalog of benchmarks, which includes performance dispersion metrics, a performance breakdown by industry subsectors, more granular regional performance benchmarking (per country), the pace of new investments and more.

Download the paper
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VC Deals
Icertis eyes $5B valuation
SoftBank is reportedly planning to buy a roughly $80 million stake in Icertis from Eight Roads Ventures. The funding could value the contract management software provider at $5 billion, Bloomberg reported. In March, Icertis raised $80 million at a more than $2.8 billion valuation.
View details
 
View 38 competitors »
 
Applied Intuition hits $3.6B valuation
Applied Intuition has raised a $175 million Series D at a $3.6 billion valuation. Elad Gil, Addition and Coatue co-led the round. The Bay Area company's simulation software and other offerings help autonomous vehicle makers to develop, test and deploy their systems.
Select Additional Investors:
Andreessen Horowitz, General Catalyst, Lux Capital
View round
 
View 17 competitors »
 
Ankyra Therapeutics raises $45M Series B
Ankyra Therapeutics has raised $45 million from investors including Borealis Ventures, GV, Sands Capital Ventures and Spring Mountain Capital. The Boston-based company is developing cancer therapies intended to boost anti-tumor immune responses.
Additional Investors:
Fidelity Management & Research, Polaris Partners, Mithril Capital
View round
 
View similar company »
 
Ometria brings in $40M
Ometria has raised a $40 million Series C led by InfraVia Growth. The company is a developer of a customer data and marketing platform for retail brands such as MADE.com, Hotel Chocolat and Pepe Jeans.
Select Additional Investors:
Adjuvo, Columbia Lake Partners, Octopus Ventures, Sonae IM
View round
 
View 78 competitors »
 
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PE Deals
Riveter lands Healthy Lunch Box
Riveter Capital has acquired Healthy Lunch Box, a Houston-based provider of cafeteria-style meals to charter schools, private schools, health clinics, adult-care centers and other organizations.
View deal
 
View similar company »
 
New State Capital stakes recycling provider
An affiliate of New State Capital Partners has taken a majority stake in Wilmington Paper Corp., a New Jersey-based paper recycling services provider. Founded in 1977, Wilmington acquires and processes scrap and post-commercial use fiber from a network of over 2,000 waste hauling suppliers across the US.
View deal
 
View similar company »
 
Orangewood acquires Taco Bell franchisee
Orangewood Partners has acquired Pacific Bells, a Taco Bell restaurant franchisee, from Partners Group. Pacific Bells operates more than 250 Taco Bell locations in the US. The deal is expected to close by the end of 2021.
View deal
 
View 1 competitors »
 
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Exits & IPOs
TorQuest Partners eyes sale of Cando Rail & Terminals at $800M value
TorQuest Partners is looking to sell Canadian railway services provider Cando Rail & Terminals for around $800 million, Bloomberg reported. Potential suitors include infrastructure and pension funds. TorQuest first acquired the railway service provider in 2018.
View details
 
View 31 competitors »
 
Lulu's Fashion Lounge raises $92M in IPO
The Canada Pension Plan Investment Board-backed women's apparel retailer Lulu's Fashion Lounge raised $92 million in its IPO, selling 5.75 million shares at $16 apiece. The California-based retailer is listed on the Nasdaq under the ticker LVLU.
View details
 
View 42 competitors »
 
KKR hands off Audiobooks.com to Storytel
KKR has sold Audiobooks.com to Swedish audiobook and e-book streaming service Storytel. Founded in 2011, Audiobooks.com offers a catalog of more than 300,000 audiobooks. The deal is expected to close by the end of the year.
View details
 
View 3 competitors »
 
Fundraising
HPS targets $9.5B for fifth junior debt fund
HPS Investment Partners is targeting $9.5 billion for its fifth junior debt fund, The Wall Street Journal reported. The fund will focus on junior debt in North American and European companies.
View fund
 
View 222 investments »
 
Chart of the Day
Source: PitchBook's H1 2021 Greater China Venture Report
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