June by D’Ornano + Co.: the challenge of private Tech companies valuations, introducing our Continuous Dataroom product and new trends in early-stage investment.
This is our monthly newsletter dedicated to Tech x Investments.
Dear all,
There was momentum in Tech * Investments last week with two main events that unfolded at the same time: on the one hand, VivaTech, which was the occasion to celebrate the strength of the French startup ecosystem, and on the other hand, SuperReturn Berlin, the annual meeting of Private Equity in Europe where the resilience of this asset class was continuously highlighted by reference investors at the event.
Indeed, the current context is a difficult one: Private Equity and Venture Capital are being strongly impacted by the combination of inflation, monetary tightening and volatility. Per Pitchbook1, the rise in short-term interest rates, and, perhaps as important or more, the market expectations of further tightening has been the primary driver of market turmoil. The corresponding increase in discount rates has led to a fundamental repricing of valuations and a sharp rotation away from stocks with high implied growth rates, i.e. Tech stocks. The question today is whether the pricing dynamics ongoing in the public markets impact or will impact the private markets in Tech, a dislocation between the two seeming quite unlikely. Though data has started to appear on early-stage financing pointing out to strong discounts in valuations, it seems to us that the answer should be nuanced through a distinction between those companies that are profitable and with a proven business model, and that constitute perfect targets for Private Equity investors, to the difference of companies whose path to profitability has yet to be clarified. A question that is many discussions these days it seems!
How Inflation, Monetary Tightening, an Volatility Are Impacting PE and VC, Pitchbook, June, 2022
Even as private companies face a growing number of risks, the pace of the private investment market continues to be strong. In this environment, a fundraising event or exit can happen at any moment, either because a strategic opportunity presents itself or there is a need for a defensive move against competitors. That puts a premium on preparedness. To address this, we’re introducing a new product called Continuous Data Room.
The article explores where Venture Capital firms are the most likely to invest given the high amount of dry powder available and the uncertain macroeconomic environment.
The Unicorn birth rate is declining. Per Pitchbook, the speed at which new billion-dollar companies are being formed has dropped this year after a boom that began in late 2020. There were 30 new unicorns formed in May, down from a peak of 63 in September. The new Unicorn tracker will allow to explore trends here, and assess whether President’s Macron goal of reaching 100 Unicorns in France seems to be realist!
In this post, we discover how big Web 3.0 is and notably as it allows for permissionless data.
Lisam Systems
D’Ornano+Co. has advised Keensight Capital in its investment in Lisam Systems, a leading global provider of Environmental, Health & Safety (EH&S) compliance management software solutions and services.
The investment will support the company in its international expansion, both organically and via acquisitions.
Platform.sh
D’Ornano+Co. has supported Revaia in their $140 million funding of Platform.sh, a cloud hosting platform intended to simplify cloud infrastructures, together with Morgan Stanley Expansion Capital and Digital+ Partners.
The financing will help at meeting the company's global expansion goals and fund future acquisitions.
Wittyfit
D'Ornano+Co. is very pleased to have assisted Cegid, backed by Silver Lake and KKR & Co. Inc., in its acquisition of Wittyfit, a SaaS platform enabling organizations to measure, analyze and monitor employee satisfaction, commitment and follow-up in order to drive collective performance. With this acquisition, Cegid consolidates its investment strategy and its leadership position in the Human Resources and Talent Management markets.
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