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In today's Daily Pitch, you'll find: - KKR's net income fell year-over-year in Q4 2021, while the PE giant's distributable earnings jumped significantly.
- Our analysts explore the rise of subscription healthcare and the venture-backed startups involved in the space.
- Companies that provide tools for Web3 developers are raking in capital as use cases for blockchain tech multiply.
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| Subscription healthcare gains traction | |  | | (CreativaImages/Getty Images) | | | To improve the patient experience and reduce costs, a new crop of healthcare startups are offering membership-based payment structures rather than the traditional fee-for-service-based billing method.
Several venture-backed companies in the niche sub-segment of the primary and specialty care landscape are investing in proprietary technologies, including member engagement software, risk prediction techniques, remote patient-monitoring devices and home visits.
Our recent analyst note on the topic explores VC activity in the space, key direct-to-consumer providers and why scalability will play a crucial role in how the business model generates profits. | | | | | | | | | | KKR sees net income drop in Q4 as distributable earnings spike | |  | | (SOPA Images/Getty Images) | | | KKR reported a drop in fourth-quarter net income year-over-year for 2021.
The private equity giant tallied $507.6 million in net income for Q4 2021, down from $1.48 billion for the same period in 2020, according to its earnings report. The firm reported $4.6 billion in net income for all of 2021, up from $1.95 billion the year before. KKR's stock price was down over 6% at market close following the report.
Distributable earnings—the allocation of cash that can be returned to investors—jumped significantly to $1.4 billion in Q4 2021, up 158% YoY. | | | | | | | |
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| A message from the National Science Foundation | | |
| | 3D-printing company Essentium uses plasma and electricity to weld 3D-printed parts together to create a stronger bond. The company recently announced a SPAC merger valued at $974 million.
Essentium (NSF-1560753) is one of hundreds of deep-tech startups annually funded by the NSF, a government agency that plays a central role in accelerating discoveries into the marketplace.
Each startup can receive up to $2 million to support translational R&D. By annually investing roughly $200 million in startups, NSF helps teams navigate the earliest stages of technology translation. In the past five years, these companies have gone on to raise billions in follow-on capital, and the portfolio has had 200-plus exits.
Learn more about NSF funding at seedfund.nsf.gov | | | | | | | |
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| As developers flock to Web3 apps, VCs follow | |  | | (MR.Cole_Photographer/Getty Images) | | | An expansion of use cases for blockchain technology—from NFT art collecting to crypto gaming—has spurred the development of decentralized apps. Now, two companies building tools for Web3 developers are raking in capital. - Alchemy has raised a $200 million round led by Lightspeed and Silver Lake at a $10.2 billion valuation, up from $3.5 billion in October and $505 million in April.
- Earlier this week, Polygon raised $450 million led by Sequoia India at a reported $13 billion valuation. The company was previously backed by Mark Cuban and Coinbase Ventures.
- Both companies have been likened to Amazon Web Services because they provide tools and infrastructure for the blockchain in the way that AWS does for the cloud. The platforms have been used to build some of the most well-known Web3 apps: Polygon is used by NFT marketplace OpenSea and Alchemy by game creator Dapper Labs.
| | | | | | | | | | Revenue-based financing gets a boost with Silvr's $148M Series A | |  | | (PM Images/Getty Images) | | | Revenue-based financing startup Silvr has raised €130 million (about $148 million), as alternative funding routes continue to gain traction in Europe. - For companies finding it hard to raise capital, revenue-based financing—in which lending is secured against future revenue—is an increasingly popular alternative to traditional funding. It also appeals to founders with predictable revenue streams who don't want to give up equity.
- VCs are paying more attention to revenue-based financing as well, with major rounds raised in the past few months by Ireland's Wayflyer, French provider Karmen, and Berlin-based Re:cap.
- Investors including XAnge, Otium, Bpifrance, Eurazeo and Isai took part in Silvr's latest round, alongside several business angels. Silvr, founded in 2020, plans to use the capital in part to create its own debt fund.
| | | | | | | | | | How the pandemic has killed the American dream of middle-class homeownership. [Fortune]
Crypto has traditionally been a boy's club. Now women-led crypto groups like BFF are demanding their turn. [The Information]
The boom in personal finance apps has made it all too easy for vulnerable people to become targets. [Wired] | | | | | |
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| | Since yesterday, the PitchBook Platform added: | | 428 Deals | 2035 People | 487 Companies | 25 Funds | | | | | | |
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| 2014 Vintage European Real Estate Funds | | | | | | |
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| Watershed lands $70M at $1B valuation | | | Watershed has raised a $70 million Series B co-led by Kleiner Perkins and Sequoia. The funding values the San Francisco-based company at $1 billion. Watershed offers a platform to help companies such as Airbnb and DoorDash measure and reduce carbon emissions. | | | | | | | | | Happy Money has raised $50 million in Series D1 financing from investors including Anthemis Group and CMFG Ventures. The funding values the company at $1.1 billion. Happy Money is the developer of an unsecured-lending platform that partners with credit unions to help users pay off credit card debt. | | | | | | | | Shift5 grabs $50M Series B | | | Shift5 has raised $50 million in a round led by Insight Partners. Based in Virginia, the company is the developer of cybersecurity technology intended to help defend transportation and weapon systems. | | | | | | | | Geothermal energy startup secures $40M Series A | | | Quaise Energy has raised $40 million in a round led by Safar Partners. Based in the Boston area, the company is a developer of drilling technology designed to access renewable geothermal energy. | | | | | | | | Rondo Energy picks up $22M | | | | | | |
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| KKR leads $180M round for Livspace at $1B+ valuation | | | | | | | | | Main Capital backs Biomedion | | | Main Capital Partners has backed Berlin-based Biomedion. The company is the developer of cloud-based enterprise software for the life and health sciences industry. | | | | | | | | PE-backed Concord adds on digital consulting specialist | | | Concord, a provider of tech consulting and services to the cloud, integration and data sectors, has acquired SwiftWIN Solutions, a Charlotte-based provider of digital consulting services. The deal expands Concord's presence across the US, Eastern Europe and India. HIG Capital backed Concord with a growth investment in April 2021. | | | | | |
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| Korea's Kurly targeting $1B in public debut | | | Kurly is looking to raise $1 billion in its IPO, which could value the Korean company at between $4 billion and $6 billion, Bloomberg reported. The grocery delivery app creator has received prior funding from Anchor Equity Partners, Sequoia China and other investors. | | | | | |
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| OceanSound Partners closes first fund at $780M | | | New York-based OceanSound Partners has closed its debut fund on $780 million, surpassing a target of $550 million. The vehicle will support the firm's strategy of investing in middle-market tech and tech-enabled services companies that serve the government and enterprise end markets. OceanSound typically makes investments of $75 million to $300 million. | | | | | |
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"IT continues to see robust exit activity as the pandemic has accelerated the growing need for digital transformation. Midsized companies often do not have the budget to pay for sweeping software systems, instead preferring similarly sized vendors and cloud applications that help integrate data siloes over expensive enterprise solutions. PE firms that recognize this opportunity are securing favorable realizations as middle-market investors increasingly seek out ways to implement digital strategies in their operations."
Source: PitchBook's Q3 2021 US PE Middle Market Report | | | | | |
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