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PitchBook and Collision Unveil Fifth Venture Investor Survey at 2022 Conference

PitchBook and Collision Unveil Fifth Venture Investor Survey at 2022 Conference
PR Newswire
SEATTLE, June 20, 2022

Results Show Sentiment Towards Investing, Emerging Technologies & Areas of Impact
SEATTLE, June 20, 2022 /PRNewswire/ — PitchBoo…

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PitchBook and Collision Unveil Fifth Venture Investor Survey at 2022 Conference

PR Newswire

Results Show Sentiment Towards Investing, Emerging Technologies & Areas of Impact

SEATTLE, June 20, 2022 /PRNewswire/ -- PitchBook, the premier data provider for the private and public equity markets, today released the findings from a new survey conducted in partnership with Collision Conference, a Web Summit event and North America's fastest growing technology conference taking place in Toronto June 20-23, 2022. The survey was administered to 105 venture capital (VC) investors attending Collision. This is the fifth survey PitchBook and Web Summit have partnered on and offers a glimpse at how investment activity has fared compared to 2021, investor sentiment towards technology and focus areas for impact. At Collision, PitchBook is sponsoring the Investor Lounge where investors in attendance can work, take meetings and network. PitchBook senior VC analyst, Kyle Stanford, is a keynote speaker presenting global VC trends at the conference on June 21 at 11:45 AM EDT.

The global VC industry has more than $500 billion in dry powder available with VC consistently showing best returns of private investment strategies, driving more interest and capital. European VC deal value started 2022 with strong momentum reaching €27.5 billion invested in the first quarter of the year while U.S. investment activity did not maintain its pace after a record-setting 2021, reaching $70 billion invested during the same timeframe. The VC industry overall has displayed unwavering resilience throughout the pandemic.

"It is a strong signal of market stability that nearly half of investors polled do not plan on slowing down investment activity. Recent fundraising records have driven dry powder levels to new heights, which can provide short-term insulation from global market headwinds," said Kyle Stanford, senior VC analyst at PitchBook. "It's encouraging to see the majority of survey respondents have made first-time investments over the past twelve months – an area of the market that slowed during the pandemic – and we expect to continue to see a strong startup ecosystem." 

"Despite a decrease in startup valuations, venture capital deal making remains strong — especially if VC dry powder stays robust — and potentially makes smaller cheques at lower valuations more available," said Paddy Cosgrave, founder and CEO at Collision and Web Summit. "Alternatively, many less renowned venture funds might simply shutter because the actual pool of viable startups available for them to invest in may be significantly lower than the outsized amount of capital available in the broader market."

Key findings and comparisons with 2021's Web Summit survey include:

Investment

  • In the past twelve months, over half of investors (53%) have made between one and five investments, down from two thirds of respondents in 2021. 30% of respondents have made between six and ten investments. Out of those investments, nearly one third of investors said at least 75% of their investments were first-time financings.
  • First-financings have continued to close at a historically high rate in 2022 following 2021's momentum. With more than 1,000 deals closed, Q1 finished with more companies raising their first institutional capital than any quarter prior to 2021.
  • Considering nontraditional investments, 59% of respondents agreed record levels of capital from nontraditional sources including corporate venture capital (CVC) and financial institutions has been the main driving force behind increased deal sizes. A quarter (26%) of respondents disagreed with this sentiment, which is an 8% increase from 2021.

Evaluation

  • When asked what the most important criterion respondents look at when evaluating investment opportunity, executive team pedigree moved to the top (26%) followed by business model (25%). In 2021, the two were swapped with business model ranked first (30%) followed by executive team pedigree (22%).
  • Half of respondents agreed that growth must come before profit for VC-backed technology startups while nearly one third disagreed.
  • Majority of respondents (83%) either agreed or strongly agreed increased deal sizes across financing stages are pushing up valuations and making it harder to find good value-for-money investments.
  • When evaluating external pressures facing the VC ecosystem such as public market volatility, increasing interest rates and talent market shifts, nearly half (45%) of respondents disagreed that their investment activity will markedly decrease from recent years.

Opportunity

  • Emerging technologies continues to attract capital from investors and when asked what category has the potential to be most disruptive in the next five to ten years, fintech remained at the top at 30%. Artificial intelligence and machine learning came in second (27%) over taking climate tech (15%), which came second in 2021.
  • According to respondents, over half (58%) selected North America as the most exciting region to invest in right now. After North America, Africa and Asia Pacific tied for second.
  • When asked where VC investors should focus their attention to have the most impact, improved long-term investment moved to the top (26%). In 2021, environmental and social concerns was the top choice, which moved to second.

For more information about PitchBook, click here.

About PitchBook
PitchBook is a financial data and software company that provides transparency into the capital markets to help professionals discover and execute opportunities with confidence and efficiency. PitchBook collects and analyzes detailed data on the entire venture capital, private equity and M&A landscape—including public and private companies, investors, funds, investments, exits and people. The company's data and analysis are available through the PitchBook Platform, industry news and in-depth reports. Founded in 2007, PitchBook has offices in Seattle, San Francisco, New York, London and Hong Kong and serves more than 70,000 professionals around the world. In 2016, Morningstar acquired PitchBook, which now operates as an independent subsidiary.

About Collision
­­When Collision, North America's fastest growing technology event, moved online, the pivot to host thousands of attendees online was coined by the Sunday Times as a "pretty big experiment". For the second year in a row, Collision will host attendees online on its proprietary software. After hosting 32,000 attendees at its first online event in June 2020, the Collision platform was called "the stunning future of online events" by Digital Trends. This year, the platform will host more than 40,000 attendees for the three days of the conference.

About Web Summit
In the words of Inc. Magazine, "Web Summit is the largest technology conference in the world". Forbes says Web Summit is "the best tech conference on the planet", Bloomberg calls it "Davos for geeks", Politico "the Olympics of tech", and the Guardian "Glastonbury for geeks".

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Economics

Housing Affordability Index Drops To Lowest Rate Since 1989, Still Way Too High

Housing Affordability Index Drops To Lowest Rate Since 1989, Still Way Too High

Authored by Mike Shedlock via MishTalk.com,

The National…

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Housing Affordability Index Drops To Lowest Rate Since 1989, Still Way Too High

Authored by Mike Shedlock via MishTalk.com,

The National Association of Realtors says "affordability" dropped to 98.5 in June, the lowest since 1989.

Housing Affordability Index and mortgage rates via St. Louis Fed.

Affordability in June Was the Worst Since 1989

The Wall Street Journal reports Affordability in June Was the Worst Since 1989

It was more expensive to buy a U.S. home in June than it has been for any month in more than three decades, as record-high home prices collided with a surge in mortgage rates.

The National Association of Realtors’ housing-affordability index, which factors in family incomes, mortgage rates and the sales price for existing single-family homes, fell to 98.5 in June, the association said Friday. That marked the lowest level since June 1989, when the index stood at 98.3.

Housing Affordability Index

The NAR's Housing Affordability Index is based on median income data current  through 2017, projected forward. 

Only 13 months of data is available on Fred, the St. Louis Fed repository.

Affordability is based on whether the median family earns enough income to qualify for a 30-year fixed mortgage loan on the median single-family home without spending more than 25% of the income on payment for principal and interest.

An index value of 100 means that a family with the median income has exactly enough income to qualify for a mortgage on a median-priced home. An index above 100 means a median family has more than enough income to qualify for a mortgage loan on a median-priced home, assuming a 20 percent down payment. 

Inquiring minds may wish to look at the NAR's Housing Affordability Index Calculations.

Curiously, the NAR concludes the median household can nearly always afford the median home price.

Do you believe that? More importantly, even if accurate, so what? 

The median person who can afford a home and wants a home probably already has a home. 

First Time Buyer Index

In terms of new and existing home sales, what matters is what a buyer who does not have a home, but wants a home, is willing to pay and can pay. 

The First-Time Buyer Index for 2022 Q2 fell to 68 assuming a starter home price of $351,500. 

Can 68 percent of would-be buyers afford (and find) a $351,500 home in a neighborhood in which they want to live? 

68 percent is a much more reasonable number than the overall 98.5 percent calculation, but that still strikes me as too high. 

Case-Shiller National Home Price Index

I have not updated my full set of Case-Shiller home price charts for a while but that chart is current (May data). 

Case-Shiller lags by a few months so it's even worse than shown. 

The pre-pandemic index was 212 and it's now 306. That's a 44 percent jump with real median wages declining, property taxes soaring, food soaring, and energy soaring.

Yet, the NAR says that median overall affordability has declined only to the 98.5 percent level. Yeah, right.

Meanwhile, rent and food keep rising and the price of rent will be sticky. Gasoline is more dependent on recession and global supply chains.

Food Prices Rise Most Since February 1979

For more on the price of food, please see Food at Home is Up 13.1 Percent From a Year Ago, Most Since February 1979

For more on rent, please note Tennant's Unions Demand Biden Declare a National Emergency to Stop Rent Gouging

For more on producer prices please see Producer Prices Decline For the First Time Since the Pandemic Due to Energy

Spotlight on Fed Silliness

The Fed has blown three consecutive bubbles trying to produce two percent consumer inflation while openly promoting raging bubbles in assets especially housing.

*  *  *

Please Subscribe to MishTalk Email Alerts.

Tyler Durden Sun, 08/14/2022 - 12:30

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Economics

Summer Teen Employment

Here is a look at the change in teen employment over time.The graph below shows the employment-population ratio for teens (6 to 19 years old) since 1948.The graph is Not Seasonally Adjusted (NSA), to show the seasonal hiring of teenagers during the sum…

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Here is a look at the change in teen employment over time.

The graph below shows the employment-population ratio for teens (6 to 19 years old) since 1948.

The graph is Not Seasonally Adjusted (NSA), to show the seasonal hiring of teenagers during the summer.

A few observations:
1) Although teen employment has recovered some since the great recession, overall teen employment had been trending down. This is probably because more people are staying in school (a long term positive for the economy).

2) Teen employment was significantly impacted in 2020 by the pandemic.

Click on graph for larger image.

3) A smaller percentage of teenagers are obtaining summer employment. The seasonal spikes are smaller than in previous decades. 

The teen employment-population ratio was 38.4% in July 2022, down from 38.9% in July 2021. The teen participation rate was 43.6% in July 2022, down from 43.8% the previous July. 

So, a smaller percentage of teenagers are joining the labor force during the summer as compared to previous years. This could be because of fewer employment opportunities, or because teenagers are pursuing other activities during the summer.

3) The decline in teenager participation is one of the reasons the overall participation rate has declined (of course, the retiring baby boomers is the main reason the overall participation rate has declined over the last 20+ years).

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Economics

Braxia and KetaMD, CEOs McIntyre and Gumpel Speak on Acquisition

Last week, the Canadian company Braxia Scientific acquired 100% of the issued and outstanding stock of KetaMD, Inc. This is an exciting acquisition, and…

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Last week, the Canadian company Braxia Scientific acquired 100% of the issued and outstanding stock of KetaMD, Inc. This is an exciting acquisition, and in today’s interview, The Dales Report’s Nicole Hodges talks with CEOs Dr. Roger McIntyre and Warren Gumpel of Braxia Scientific and KetaMD respectively.

For some background information, KetaMD is a U.S. based, privately-held, innovative telemedicine company, with a mission to address mental health challenges via access to technology-facilitated ketamine-based treatments. Braxia Scientific is Canada’s first clinic specializing in ketamine treatments for mood disorders. They recorded revenue of $1.49m for 2022 fiscal year, ended March 31. On a year-over-year basis, revenue increased 47.5%.

Here’s some highlights from the interview.

KetaMD gives Braxia a presence in the US

Dr. McIntyre says that KetaMD gives Braxia what they’ve had as their vision from the beginning: a US presence. KetaMD is a living program. It’s already running, has infrastructure, and patients. McIntyre believes that a program like KetaMD is something Braxia’s needed to scale and obtain commercial success.

With telemedicine, Braxia has a potential to serve a gap in access. The zeitgeist of “patient going to medicine” has flipped, McIntyre says. “Now it’s medicine goes to the patient, and that is long overdue.”

COVID speeding a trend that was already happening

In 2020, 80% of physicians indicated they had virtual visits. That’s a number up from 22% the year before. But this is something that many doctors, McIntyre included, believe always should have happened. The pandemic only was the catalyst for innovation and making the option viable.

While some treatments will always need a clinic or a hospital, McIntyre believes some treatments can be done safely at home. And they are, for many chronic diseases. He feels implementing ketamine and psychedelics would be among these treatments where service could be expanded into the home. It would require careful SOPs in place, best practices, and surveillance. But he believes Braxia Scientific could deliver this with KetaMD.

Gumpel to stay as CEO of KetaMD

Gumpel says that KetaMD benefits in this acquisition from being part of the world’s most prominent researchers in depression, psychedelics, and ketamine. In the acquisition, he’ll stay on as CEO. He admits that Dr. McIntyre has been a huge part of collecting the data on the safety of ketamine treatment, and has a strong motivation to “see this thing through until most of society can access that – or at least the people that need it and want it.”

Gumpel admits he has a personal connection to ketamine treatment. As a person who has experienced bouts of depression for years, it saved his life, he says. He is grateful he was living within walking distance of ketamine treatment in Manhattan. It made him extremely aware of the accessibility gap, which in part inspired KetaMD.

Be sure to tune in for the full interview regarding Braxia and KetaMD, right here on The Dales Report!

The post Braxia and KetaMD, CEOs McIntyre and Gumpel Speak on Acquisition appeared first on The Dales Report.

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