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The Daily Pitch will be off tomorrow and return next week. In today's edition, you'll find: - Our Q1 2022 PitchBook-NVCA Venture Monitor explores the recent slowdown in VC activity and the potential for an imminent but healthy recalibration period.
- PE investment in the hospitality and leisure industry is on the rebound.
- VC investment in Canadian startups has hit a new high as the country finds it easier and easier to target the US market.
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| US VC remains strong while navigating market of uncertainty | | Despite many data points remaining historically high, the first quarter of 2022 showed signs of a slowdown for venture dealmaking in the US, suggesting an imminent but healthy recalibration period. On the exit front, interest rates, inflation and geopolitical uncertainty contributed to a stark dip in public listings.
The latest PitchBook-NVCA Venture Monitor, sponsored by Insperity and JP Morgan, details how dealmaking, exits, fundraising and valuations responded to the changing economic climate of Q1. Key takeaways include: - Venture-backed companies attracted nearly $71 billion during Q1. Even though the figure was off pace from every quarter in 2021, it still exceeded pre-2021 quarterly totals.
- Fundraising maintained the momentum of 2021, with 199 funds raising $73.8 billion in commitments.
- Public listings slowed significantly from the highs of recent years amid public market volatility.
| | | | | | | | | | Anti-Russia sanctions spur VCs to unravel ties to 'toxic' money | |  | | (Max Ryazanov/Getty Images) | | | These are complicated times for Western VC firms with roots in the former Soviet Union. While most of their portfolio companies are not based in Russia, many of their LPs have recent personal or financial ties to the country that invaded Ukraine.
These firms need to be especially vigilant about screening their LPs for recently sanctioned oligarchs and Russian government officials. A handful have identified sanctioned backers among their LPs, says an attorney who represents many Russian-speaking venture capitalists and tech founders active in Silicon Valley.
Investors who may in the future end up on the sanctions list are now being approached by other investors who offer to buy out their LP stakes—sometimes at deep discounts. Service providers, such as Silicon Valley Bank, are also vetting firms with Russian roots, said Alexander Galitsky, co-founder and managing partner at Almaz Capital. | | | | | | | |
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| A message from the National Science Foundation | | |
| | Colorado-based Living Ink is on a mission to develop sustainable ink products using algae. Its algae-based inks are used to print carbon black, which is most commonly derived from petroleum.
Living Ink (NSF-1758587) 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 research & development. 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+ exits.
Learn more about NSF funding at seedfund.nsf.gov | | | | | | | |
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| Opening up: PE backs leisure's post-pandemic recovery | |  | | (Luis Alvarez/Getty Images) | | | The hospitality and leisure industry was hit hard during the pandemic, but PE investment in the sector has been on the rebound. A recent example is UK holiday resort group Parkdean, which has reportedly attracted bids from the likes of Apollo Global Management and Blackstone.
Since the COVID-19 outbreak, business practices and consumer habits have also changed out of necessity. The result is an industry that has evolved as well as recovered. | | | | | | | | | | Canadian startups continue hot streak | |  | | Since 2020, more than half of all Toronto-area VC deals have included at least one US investor. (Naeem Jaffer/Getty Images) | | | Venture capital investment in Canadian startups topped $13.6 billion in 2021, more than double the previous high of $5.8 billion in 2019. So far this year, the ecosystem is tracking at a similar pace.
That's largely thanks to a rise in supersized deals, which have become commonplace. To wit: OSF Digital, which helps legacy retailers transition to ecommerce, just landed a $100 million Series C led by Sunstone Partners, with support from Delta-v Capital and Salesforce Ventures.
Here's a closer look at how Canadian VC investment is trending. | | | | | | | | | | In a recent survey, 58% of executives worldwide admitted their companies are guilty of greenwashing. [Fast Company]
Over 100 hedge funds and PE vehicles have been forced to freeze money due to recent Russian sanctions. What comes next? [Institutional Investor]
As more electric vehicles enter American highways, gas stations will either need to adapt or risk going out of business. [Recode] | | | | | |
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| | Since yesterday, the PitchBook Platform added: | | 516 Deals | 1739 People | 458 Companies | 24 Funds | | | | | | |
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| 2014 Vintage Global VC Funds | | | | | | |
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| General Atlantic names Lance Uggla CEO of BeyondNetZero | | | General Atlantic has designated Lance Uggla as CEO of BeyondNetZero, the firm's climate growth equity venture focused on decarbonization, energy efficiency, resource conservation and emissions management. Uggla was most recently chairman and CEO of IHS Markit, a UK business information company. | | | | | |
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| Salsify brings in $200M Series F | | | Salsify has raised $200 million in a round led by TPG. Based in Boston, the company offers a commerce experience management platform for brand manufacturers, distributors and retailers. Salsify was valued at $805 million in 2020, according to PitchBook data. | | | | | | | | Wagestream closes $175M Series C | | | Smash Capital has led a $175 million Series C round for Wagestream, the provider a financial well-being app for frontline workers. Investors including BlackRock also joined the round, which comprises $60 million in equity and $115 million in debt, according to a report from TechCrunch. | | | | | | | | Natural Fiber Welding nabs $85M Series B | | | Natural Fiber Welding has raised $85 million from investors including Evolution VC Partners and BMW i Ventures. The Illinois-based company is a manufacturer of sustainable plant-based textiles that are designed to reduce microplastic pollution. NFW was valued at $200 million in 2021, according to PitchBook data. | | | | | | | | Cimeio Therapeutics secures $50M Series A | | | Cimeio Therapeutics has raised a $50 million round from Versant Ventures. The company is a developer of cell-shielding technology and immunotherapies that are designed to treat rare genetic diseases, hematologic malignancies and autoimmune disorders. | | | | | | | | | | | | |
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| Data provider Kpler to collect $200M | | | Kpler Holding, a global provider of data and analytics to commodity traders, has agreed to raise about $200 million in private equity funding, Bloomberg reported. The deal, led by Five Arrows and Insight Partners, represents a minority stake in Kpler. | | | | | | | | Vista Equity leads $43M round for MedTrainer | | | Vista Equity Partners has led a $43 million Series B for MedTrainer, a developer of cloud-based healthcare compliance software. Founded in 2013, the company raised a $11 million Series A in 2019. | | | | | | | | Enhanced Healthcare Partners invests in Vytalize Health | | | Enhanced Healthcare Partners has invested in Vytalize Health, a provider of care services for seniors and their primary care physicians. Founded in 2014, Vytalize is partnered with 280 primary care practices across 16 states. | | | | | | | | The Jordan Company to acquire Trimble businesses | | | The Jordan Company has agreed to acquire four businesses—Time and Frequency, LOADRITE, Spectra Precision Tools and SECO—from industrial technology company Trimble. The transaction is expected to close in the second quarter of this year. | | | | | | | | Godspeed Capital stakes Huckabee | | | Godspeed Capital has made a strategic investment in Huckabee & Associates, an architecture, engineering and consulting services firm that specializes in education facilities in Texas. Godspeed Capital is a lower-middle-market firm that typically targets investments in the defense and government sectors. | | | | | | | | NewSpring backs Mountain Temp Services | | | A strategy of NewSpring Capital has invested in Mountain Temp Services, a provider of temporary staffing specializing in light industrial services. Mountain Temp Services operates out of 13 branches. | | | | | |
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| One Equity wraps up eighth fund with $2.75B | | | One Equity Partners has closed its eighth namesake fund on $2.75 billion. The vehicle will support the middle-market firm's focus on investing in tech, industrial and healthcare businesses across North America and Europe. The fund's predecessor closed at $1.75 billion in 2019. | | | | | | | | Accomplice locks in $405M | | | Tech-focused VC firm Accomplice has collected $405 million for what it describes as its "last fund, best fund," Axios reported. Based in the Boston area, the VC firm has provided funding to companies such as Hopper, Patreon, FreshBooks and Zoopla. | | | | | | | | Las Olas Venture Capital raises $50M fund | | | Las Olas Venture Capital has raised $50 million for its second flagship fund. The investment vehicle aims to support B2B software companies at the seed stage. | | | | | |
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| Apollo-led group offers to buy $4B of Citrix deal debt | | | | | | |
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