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In today's Daily Pitch, you'll find: - Our latest US VC Valuations Report explores how investor sentiment has and hasn't changed over the past quarter.
- SignalFire founder and CEO Chris Farmer joins the "In Visible Capital" podcast to discuss VC's return to earth.
- Our latest foodtech update tallies the sector's most active investors, explores plant-based dairy products and sustainable grocery tech, and much more.
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| Decline in US VC exit activity hits Q3 valuation trends | | The near halt in public listings and recent retreat of nontraditional investors in the venture industry are a few of the many reasons why both median and average late-stage VC valuations have taken a significant hit in 2022.
The venture market still looks stronger than before 2021. However, the longer economic woes last, the greater the chance that the slowdown in the VC market will increase the pressures on investments and valuations. Our Q3 2022 US VC Valuations Report, sponsored by Silicon Valley Bank, explores valuations across stages and sectors. Key takeaways include: - Late-stage VC has seen the impact of volatility more than any other area of the market so far. The median late-stage valuation in Q3 fell to $71 million, marking a 29% drop from Q1.
- Seed and early-stage valuations have remained at the elevated levels achieved in 2021.
- While exit valuation step-ups have remained relatively strong, a lack of generated exit value resulted in a decline in the median valuation to just over $317 million—the lowest figure in three years.
| | | | | | | | | Market volatility catches up with foodtech | | Market volatility has finally caught up with venture capital, and foodtech is no exception to investors' newfound frugality. In Q3, quarterly VC investment in the sector fell 76.9% year-over-year, with only $2.7 billion invested.
However, there are still reasons for optimism, as the US government pumps money into research on alternative food sources and nutrition and retailers pursue automation and ESG goals.
With brand-new segmentation to reflect the rapidly changing industry, our Q3 2022 Foodtech Report details VC activity in the sector and highlights emerging opportunities in plant-based dairy products and sustainable grocery tech. The report also ranks the most active accelerators, PE and VC investors, and strategic acquirers in the foodtech space. | | | | | | | |
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| Don't delay closing: Know how to negotiate side letters fast | | As side letters become more common in private market deals, fund managers find themselves spending more time and resources on negotiating these agreements.
Even under the best circumstances, side letters tend to increase administrative and legal costs. In the worst circumstances, they can delay closing as GCs and outside counsel consider the practical and legal ramifications of LPs' requests.
Fund managers can contemplate several strategies to speed up the side letter process and avoid delays, including standardizing provisions for the most common side letter terms, from MFN elections to newer ESG expectations.
Ontra took an in-depth look at the top 10 terms in side letters and how GPs can handle negotiations.
Download the Ontra side letter guide now. | | | | | | | |
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| On the podcast: VC's gravity check | | What looked like a recession at the onset of the pandemic turned out to be anything but: Valuations inflated, funds grew and capital poured into the private markets. But it couldn't last forever.
In this week's episode, SignalFire founder and CEO Chris Farmer discusses why the venture capital balloon burst. He also touches on leveraging data to find and support entrepreneurs, why SignalFire turned to seed deals as a means of countering unsustainable valuations, corporate M&A and much more.
Plus, PitchBook senior analyst Kyle Stanford joins to discuss key takeaways from the Q3 2022 US VC Valuations report. | | | | | | | | | Peloton founder bucks direct-to-consumer rout with new rug startup | |  | Peloton co-founder John Foley
(Kimberly White/Getty Images) | | | A string of high-profile flops and a realization that the category is not as cost-effective as previously thought have soured investors on direct-to-consumer startups.
While few, if any, investors are expressly looking to back DTC startups now, Peloton co-founder John Foley has raised a $25 million Series A for Ernesta, a custom rug company.
Ernesta's round is the latest example of successful founders' power in attracting venture capital funding. | | | | | | | | | Emerging manager Catalio targets structured equity, debt with new fund | |  | | (PopTika/Shutterstock) | | | Emerging manager Catalio Capital Management has raised $85 million for a new strategy to fund cash-hungry biomedical technology companies, offering a financing product tailored to the current tough fundraising market.
The debut credit opportunities fund, which closed above its $50 million target, will be dedicated to providing structured equity and debt financing to companies based in North America. It comes amid a growing demand for this type of financing in the sector, where the declines in the public markets earlier this year have undermined private valuations. | | | | | | | | | Amid more rate hikes, PE-backed leveraged loan issuers eye rising costs, outsized risk | |  | | (Lyubimova Tatiana/Shutterstock) | | | Private equity has always been a fundamental element of the leveraged loan market—dating back to the RJR Nabisco buyout in the late 1980s—and that's never been more the case than today, as sponsor-backed issuance continues to consume market share in this dynamic asset class, especially in the riskiest corners of the segment.
In this latest deep dive, LCD details the headwinds PE-backed loan issuers face amid continued rate hikes—making this floating-rate debt more costly to service. LCD also explores the performance of this debt in the trading market, the PE leveraged loan "Maturity Wall" and default rates amid PE-backed deals, which actually are lower than the overall leveraged loan default rate. | | | | | | | | | | Private equity has been drawn to the fragmented US accounting industry, but the sector has been split on whether to accept PE money. [Financial Times]
How Rivian stumbled despite billions in cash, Amazon's backing and the sixth-largest IPO in US history. [Fortune]
The development of autonomous vehicles is attracting billions of dollars, but industry executives say remote human operators will likely always be needed. [The Wall Street Journal] | | | | | |
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| | Since yesterday, the PitchBook Platform added: | | 400 Deals | 2026 People | 627 Companies | 18 Funds | | | | | | |
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| 2016 Vintage Global Real Estate Funds | | | | | | |
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| A message from Apex Group | | |
| Fund managers benefit from $3.8M savings with Apex Group | | Forrester Consulting has recently released its independent study, having interviewed key decision-makers across a number of large Apex Group clients, and the findings in its Total Economic Impact™ study of Apex Group are compelling: - Around $5.4M in cost benefits
- $2.75M Net Present Value over three years
- 105% return on investment ROI
To find out more about the benefits and savings that Apex Group's single-source solution can provide, download Forrester's Total Economic Impact™ report on Apex Group here.
Apex Group's transformation over the past few years has been driven by the Group's founding vision—to deliver service in a better way, in a way that no one else can. | | | | | | | |
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| Super app provider Yassir nabs $150M | | | Yassir, the developer of a ridehailing and food delivery app for North Africa, has raised $150 million in a round led by Bond Capital. | | | | | | | | | LevitasBio has raised $35 million in a round led by Novalis Lifesciences. Based in Menlo Park, the company is the developer of a cellular analysis platform for gene expression profiles. | | | | | | | EdgeDB raises $15M Series A | | | EdgeDB has raised $15 million in a round led by Nava Ventures and Accel. Based in the Bay Area, the company provides an open-source relational database for software developers. | | | | | | | | | Founders Fund has led a $14 million Series A for Biofire, the developer of a smart gun that remains secured from unauthorized use. | | | | | | | | | Archy has raised $10 million in a round co-led by Bessemer Venture Partners and CRV. The company is a developer of payments and management software for dental practitioners. | | | | | | | Circle Labs collects $4M+ for AI friends | | | Circle Labs has raised $4.2 million in a seed round led by Lightspeed. With Circle's technology, users can create AI-powered chat bots that have consistent personalities across platforms like Twitter, Discord and Instagram. | | | | | |
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| Walgreens' VillageMD inks nearly $9B deal for Warburg's Summit | | | | | | | | NGP to invest $150M in equity to create Mesa Minerals III | | | NGP has agreed to invest $150 million in newly formed Mesa Minerals III, which plans to use the capital to acquire mineral and royalty rights in the Haynesville and Permian basins. The investment draws from two of NGP's funds: NGP Natural Resources XII and NGP Royalty Partners II. | | | | | |
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| Eurazeo to sell $200M fragrance brand Nest to North Castle | | | Eurazeo has agreed to sell its majority interest in personal and home fragrance company Nest New York to a consortium led by North Castle Partners. Under the agreement, which values the company at $200 million, Nest's founder and Eurazeo will retain minority positions. | | | | | |
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| Kinderhook wraps up $1.85B | | | Kinderhook Industries has closed its seventh private equity fund on $1.85 billion. The firm plans to use the capital to invest in lower-middle-market businesses in the healthcare, business and environmental services, light manufacturing and automotive sectors. | | | | | | | Adams Street closes $1.3B+ co-investment fund | | | Adams Street Partners has closed its Co-Investment Fund V on more than $1.3 billion. The firm plans to partner with other GPs on roughly 50 investments using the fund's commitments. | | | | | | | Quona locks down $332M fintech fund | | | Quona Capital has closed its latest fund on $332 million, passing its $250 million target. The firm invests in fintech startups serving consumers and businesses in Latin America, India, Southeast Asia, Africa and the Middle East. | | | | | |
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"Having a female decision-maker involved at the GP level can open doors for female founders to access necessary capital and provide LPs with diversified investment opportunities. Female decision-makers represent 16.1% of the national total in 2022, meaning there is still much progress to be made within VC firms along with the startups that receive their funding. Furthermore, 95.5% of US VC firms have a majority male population of decision-makers."
Source: 2022 All In: Female Founders in the US VC Ecosystem | | | | | |
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