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The Bear Market Effect on Investors

The Bear Market Effect on Investors
February 21, 2022

The Daily Stack is a daily private market insights newsletter by PrivCo, a private company intelligence platform. Read our previous insights.
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Robinhood, Affirm, and Roblox were among the highly anticipated IPOs of 2021. Today, they are all trading at significantly lower prices than their all-time highs. Amidst the Fed's interest rate hikes, valuation corrections of pandemic superstar companies, and countless articles on investing during a "bear market," we're looking at how investors are changing their strategies.

Over the last 18 months, investors injected more and more capital into earlier-stage companies, and non-traditional investors fueled this competition through an influx of capital that reached unsustainable heights. The underwhelming performance of these stocks is the result of that insatiable supply.

Now, with public companies tumbling, investors are taking an 'everything but pre-IPO' approach to investing. No one wants to get caught holding the bag on an oversized valuation. Venture capitalists and "crossover investors"–those who invest in private companies and purchase public shares–are focusing on Series A & B rounds or buying up slices of public companies at discounted prices. In a recent webinar with investors, Tiger Global Management formalized its focus on early-stage companies, as disclosed to The Information. D1 Capital & Octahedron Capital have slowed down their late-stage deals, opting instead for discounted tech stocks.

It remains to be seen how this shift in strategy will affect companies dependent on large late-stage checks. We know that some companies are choosing to delay IPO plans. But looking at recent fundings, the data confirms the preference for earlier stage private company deals. Recent deals show a focus on seed and Series A rounds, mostly under $20MM. Take a look here.

Since last week, PrivCo has added:
3,686 Companies | 247 Funding Activities | 178 M&A Deals

Funding & Deal Highlights:

Relief App raises $15MM from Nava Ventures

Credit Cards • Round A • New York, NY

Nalu Medical raises $104MM from MVM Partners

Medical Devices • Equity • Carlsbad, CA

EarliTec Dx raises $19.5MM from Bernie Marcus 

Health Care • Round A • Decatur, GA

Elevate raises $2.3MM 

Consulting • Equity • Los Angeles, CA

Nanjing Yunzhangfang raises $100MM from Apax Partners

Finance • Round E • Nanjing, China

Sobot raises $100MM from SoftBank Vision Fund

Customer Service • Round D • Beijing, China

Virtual Peaker raises $16.6MM from Moore Strategic Ventures

Software • Round A • Louisville, Kentucky raises $7.7MM from iHeartMedia

Audio • Round A • New York, NY

Renibus Therapeutics raises $35MM 

Digital Health • Round A • Lantana, TX raises $6.8MM from Qiming Venture Partners

NFT Analysis • Round A • Singapore, Singapore

May Mobility raises $83MM from Mirai Creation Fund

Automotive • Round C • Ann Arbor, MI

ICON raises $185MM from Tiger Global Management

3D Printing • Round B • Austin, TX

Helium raises $200MM from Tiger Global Management

Blockchain • Round D • San Francisco, CA

BloomReach raises $175MM from Goldman Sachs Asset Management

Content Management • Equity • Mountain View, CA

Sirona Medical acquires Nines 

Health Care Services • Acquisition • Palo Alto, CA

Fanatics acquires Mitchell & Ness Nostalgia

Apparel • Acquisition • Philadelphia, PA

Givex Information Technology acquires Loyalty Lane

CRM • Acquisition • Marietta, GA

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