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What does the recent third quarter drop in late-stage startup valuations mean?

November 11, 2021, 4:34 PM UTC

With decacorns born left and right nowadays, it’s hard to believe that valuations are pulling back in the U.S.

But that’s apparently what happened in the third quarter of the year: According to Pitchbook data, late-stage venture-capital-backed startups saw their valuations fall compared to the second quarter: The median pre-money valuation fell to $115 million while the average fell to $735.7 million.

According to Pitchbook’s previous report on U.S. valuations, those figures reached $160 million and $882.4 million in the second quarter of the year respectively. 

It makes sense from an industry-wide standpoint: This all comes as titters and concerns over lofty valuations have been on the rise recently. But it doesn’t mean the good times are over quite yet: Even with a contraction, late-stage valuations this year are still at a record high. Meanwhile, hot companies continued to gain huge valuations in the quarter, with fintech Chime getting a $25 billion price tag and Databricks at $38 billion.

And this comes as competition appears to have flown heavily to early stage: There, the median valuation has grown to new heights, breaking over $50 million on a pre-money basis in the third quarter for the first time ever, per Pitchbook.

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Lucinda Shen
Twitter: 
@shenlucinda
Email: 
lucinda.shen@fortune.com

VENTURE DEALS

- Wrapbook, a New York City-based provider of tech to the entertainment industry, raised $100 million in Series B funding. Tiger Global Management led the round and was joined by investors including Andreessen Horowitz, A*, Jeffrey Katzenberg’s WndrCo, Uncork Capital, and Equal Ventures.

- Nuritas, a Dublin-based biotech, raised $45 million in Series B funding. Cleveland Avenue led the round.

- Daily, a San Francisco-based developer platform, raised $40 million in Series B funding. Renegade Partners led the round and was joined by investors including Heritage Group, Cendana Capital, Sean Rose, Lachy Groom, Tiger Global, Freestyle Ventures, Root VC, Slack Fund, Moxxie, Haystack Ventures, and Todd & Rahul’s Angel Fund.

- CoreWeave, a Springfield, N.J.-based cloud provider, raised $50 million. Magnetar Capital led the round.

- Shasqi, a  San Francisco-based clinical-stage biotech, raised $50 million in Series B funding from investors including Juan Jaen, President of Arcus Biosciences.

- AppliedVR, a Los Angeles-based AR therapeutics company, raised $36 million in Series B funding. Investors include F-Prime Capital, JAZZ Venture Partners, Sway Ventures, and SVB Ventures.

- Ample, a San Francisco-based EV battery swapping company, raised $30 million. The Blackstone Group and Banco Santander led the round.

- Moov, a Tempe, Ariz.-based marketplace for used manufacturing equipment, raised $41 million in Series A funding. Tiger Global led the round and was joined by investors including Gavin Baker of Atreides Management, Valor Equity Partners and Avenir Growth Fund.

- The Naked Market, a San Francisco-based food and beverage business, raised $27.5 million in Series A funding. Integrated Capital led the round and was joined by investors including Great Oaks Venture Capital, Pacific Tiger Group, Sope Creek Capital, and Clearco. 

- Atomic, a San Francisco-based fintech API company, raised $25 million in funding. QED Investors and Anthemis led the round and were joined by investors including Softbank and Y Combinator. 

- Infinitus Systems, a San Francisco-based phone call automation company focused on healthcare, raised $30 million in Series B funding.  GV led the round and was joined by investors including Kleiner Perkins and Coatue Management.

- Novata, a New York City-based Environmental, social, and corporate governance solution, raised $21 million in Series A funding. Investors included Ford Foundation, S&P Global (NYSE: SPGI), Hamilton Lane, and Omidyar Network. 

- Blink, a London-based maker of an app designed for frontline workers, raised $20 million in Series A funding. Next47 led the round and was joined by investors including Partech and TechStars.

- Lendtable, a San Francisco-based fintech focused on 401(k) and employee stock purchase plan benefits, raised $18 million in Series A funding. O1 Advisors led the round and was joined by investors including SoftBank’s SB Opportunity Fund and Valor Equity Partners.

- StellarAlgo, a Canada-based company focused on the sports and live audience industry, raised $16.5 million in Series A funding. Carallas Holdings led the round.

- Founders First, a San Diego-based, revenue-based investment firm, raised $11 million in Series A funding. Investors include Rockefeller, Kellogg, Pivotal Ventures, a Melinda French Gates company, and the MacArthur Foundation.

- Lucidum, a San Jose, Calif.-based asset discovery company, raised $15 million in Series A funding. Point72 Ventures led the round and was joined by investors including GGV Capital and Silicon Valley CISO Investments.

- Payitoff, a New York City-based student loan management startup, raised $8.5 million in seed funding. Lightspeed Venture Partners led the round and was joined by investors including Sound Ventures, Struck Capital, and Social Leverage. 

- Saddle, a San Francisco-based market maker focused on trading between pegged value crypto assets, raised $7.5 million in funding. Polychain and Electric Capital led the round and was joined by investors including Nascent and Project Galaxy.

- Evergrow, a San Francisco-based company focused on carbon offsetting projects, raised $7 million in seed funding. XYZ Venture Capital and Congruent Ventures led the round and was joined by investors including First Round Capital, Garuda Ventures, MCJ Collective, and Skyview Ventures.

- Edgegap, a Canadian video game startup, raised $7 million in Series A funding. Konvoy Ventures led the round.

- Videra Health, an Orem, Ut.-based patient monitoring video platform for behavioral health, raised $3 million in seed funding. Peterson Ventures led the round and was joined by investors including Rose Park Advisors and OATV. 

- OneScreen.ai, a Boston-based marketplace provider for out-of-home advertising, raised $3 million in seed funding. Asymmetric Capital Partners led the round.

PRIVATE EQUITY

- Biospring Partners invested in Kiniciti, a New York City-based investor in gene therapies backed by Welsh, Carson, Anderson & Stowe. Financial terms weren't disclosed.

- EIS, a portfolio company of Audax Private Equity, acquired Norberg-IES, a Tulsa, Ok.-based distributor of medium and high-voltage fuse and custom control panel solutions. Financial terms weren't disclosed.

- Carlyle acquired a majority stake in Sciens Building Solutions, a San Francisco-based commercial fire and life safety company. Huron Capital will retain a stake. Financial terms weren't disclosed.

- HC Private Investments acquired Customized Distribution, a logistics company serving the quick service restaurant market. Financial terms weren't disclosed.

- Jefferson Capital Partners invested in Max Solutions, a New York-based packaging company. Financial terms weren't disclosed.

- Lincolnshire Management invested in CrossCom National, a  Buffalo Grove, Ill.-based provider of IT services and solutions. Financial terms weren't disclosed.

- TELEO Capital Management acquired Flatirons Solutions, a Boulder, Colo.-based content management company, from Presse Participations. Financial terms weren't disclosed.

- TA Associates invested in Riskonnect, a Kennesaw, Ga.-based risk management tech company. Thoma Bravo will retain a stake. Financial terms weren't disclosed.

EXIT

- Bernhard Capital Partners acquired RailWorks, a rail infrastructure company, from Wind Point Partners. Financial terms weren't disclosed.

- CooperCompanies (NYSE:COO) will acquire Generate Life Sciences, a reproductive and newborn stem cell services company, from GI Partners. Financial terms weren't disclosed.

- Rhône agreed to acquire Paragon Films, a manufacturer of cast stretch films in Broken Arrow, Ok. Financial terms weren't disclosed.

- BAE Systems will acquire Bohemia Interactive Simulations, a simulations company, from The Riverside Company. Financial terms weren't disclosed.

- DoubleVerify acquired OpenSlate, a New York City-based brand targeting tech company, for $150 million.

- EagleTree Capital acquired The Channel Company, a Westborough, Mass.-based sales lead company, from Stone-Goff Partners. Financial terms weren't disclosed.

- Globe Electric Company acquired Heath Zenith, a Bowling Green, Ky.-based outdoor security lighting, decorative lighting, and door chimes maker, from Transom Capital Group. Financial terms weren't disclosed.

- Hershey’s will acquire Dot’s Pretzels, a pretzels maker, from Peak Rock Capital. Financial terms weren't disclosed.

- Orangewood Partners acquired Pacific Bells, a Taco Bell franchisee in the United States, from Partners Group. Financial terms weren't disclosed.

OTHER

- Vimeo agreed to acquire Wirewax, a leader in interactive and shoppable video, and Wibbitz, a leading enterprise video creation suite.

IPO

- GoTo Group, India’s largest tech business, raised over $1.3 billion in the first close of its pre-IPO funding round, per Reuters.

SPAC

- GT Gettaxi, a corporate transportation company, agreed to go public via merger with Rosecliff Acquisition Corp. I (NASDAQ: RCLF), a SPAC. The deal values the company at $1 billion. Da Vinci Capital backs Gettaxi.

- Presto, a Redwood City, Calif.-based restaurant tech company, is going public via merger with Ventoux CCM Acquisition (NASDAQ: VTAQ). The deal values it at $1 billion. 

- Brivo, a smart building tech company, will go public in a deal with Crown Proptech Acquisitions (NYSE: CPTK). A deal values the firm at $805 million. 

F+FS

- General Atlantic closed its sixth flagship fund, GA 2021, at $7.8 billion.

- Energy Impact Partners closed its most recent flagship fund with $1 billion.

- EQT agreed to acquire Life Sciences Partners, a European life sciences venture capital firm with about €2.2 billion under management.

- True Wind Capital closed True Wind Capital II with $817 million.

- StepStone Group (Nasdaq: STEP) closed StepStone Tactical Growth Fund III with $690 million.

- Canary raised $100 million.

PEOPLE

- Emergence Capital promoted Lotti Siniscalco to partner.

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