2023 was a year highlighted by a continually changing and uncertain macroeconomic environment. As general markets rebounded and valuations stabilized, we still saw downward pressure on topline revenue growth and deal activity. For instance, the BVP Nasdaq Emerging Cloud Index (“BVP Index”) was up ~40%[1] on the year; however, top-line revenue growth halved from 2022 (falling from ~28% in 2022 to 14% for 2023E)[2]. Additionally, according to Pitchbook data, new deal and exit activity was down over 60% year over year in the software sector[3].
Across the growth equity landscape, continuing the trend from 2022, 2023 saw continued emphasis on a shift back to basics, i.e., a focus on capital efficiency, unit economics, company fundamentals, and valuation multiples based on rigorous financial analysis. However, having grounded our investment strategy from the beginning on founder fit, value creation opportunities, growth potential, and fair entry valuations, our strategy held up well and remains unchanged. We’d be remiss to say that there weren’t challenges, but with our concentrated portfolio approach, we had the time and resources to help guide our current portfolio companies and reprioritized or reduced spending to reflect the slowing growth rates.
We believe 2024 will bring exciting opportunities to build new partnerships with entrepreneurs and investors. Challenging times and market corrections can bring about some of the best investment opportunities, and so we look forward to the year ahead.
Follow-on investments represent follow-ons of greater than $5M.
Sageview Team Members from left to right:
- Andy Greos, Vice President
- Catherine Cable, Associate
- Raaga Kannan, Associate
- Bradley Tatz, Associate
- Cecily Coors, Analyst
- Margot Kleinman, Analyst
- Dorothy Shapiro, Analyst
Senior Advisors from left to right:
Articles can be found on our Insights Page
Portfolio Company Executive New Hires
- Ed Seguine – New CEO at Elemental Machines
- John Gardiner – Chief Operating Officer & Chief Financial Officer at Panethon
- Ksjitij Dayal – SVP of Engineering at Pantheon
- Erik Frieberg – SVP Marketing at Pantheon
- Neil Seth – Chief Technology Officer at Acaeble
- Kevin Morris – Chief Product Officer at Aceable
- Jessica Klek – Chief Revenue Officer at User Interviews
- Marius Smyth – Chief Revenue Officer at CallRail
- John Eitel – Chief Sales Officer at Demandbase
- Kelly Hopping – Chief Marketing Officer at Demandbase
- Darin Wolter – Chief Revenue Officer at Specright
- Brian Callahan – Chief Revenue Officer at Elastic Path
[1] Data based on the constituents of the BVP Emerging Cloud Index as of 12/31/2023. Financial data pulled from S&P Capital IQ.
[2] Data based on the constituents of the BVP Emerging Cloud Index as of 12/31/2023. Financial data pulled from S&P Capital IQ is based on the actual 2022 growth rates and 2023E growth rates of included companies.
[3] Source: Pitchbook as of 9/21/2023. Screen for new deals includes all Growth or Late-Stage VC Software deals closed in North America with a post-money valuation of $75 million or greater. The screen for exits includes all Buyout, Growth, and VC Software exits closed in North America with a post-money valuation of $150 million or greater.
[4] GrowthCap’s Top 40 Under 40 Growth Investors of 2023 for Mike McClure was awarded in January 2024; GrowthCap’s Top Software Investor for 2023 for Jeff Klemens was awarded in October 2023; GrowthCap’s Top Women Leaders in Growth Investing of 2023 for Caitlin Vorlicek was awarded in July 2023; and GrowthCap’s Top 25 Growth Equity firms of 2022 was awarded in March 2023. Nomination forms for each of the GrowthCap awards are submitted to GrowthCap by Sageview Capital, portfolio company CEOs, firm colleagues, and peers in the industry. GrowthCap evaluated all nominees based on the quality of the feedback they received from such individuals. Sageview Capital paid GrowthCap to be included on the final published lists for each award. The GrowthCap awards are awarded by third parties that are not affiliated with Sageview Capital. The number of nominees reviewed for each award and the number of award recipients were not available to Sageview Capital, and therefore, those numbers and the percentages of nominees that received each award, cannot be disclosed herein. These awards are not indicative of Sageview Capital’s future performance and does not reflect the experience of, or any rating by, Sageview Capital’s investors, or clients, and generally does not relate to investment advisory services to clients.
The 2023 Founder-Friendly Investor recognition presented herein is awarded by Inc. Inc. assessed the nominees based on written responses to questions on Inc.’s nomination form and discussions with CEO references. Sageview Capital paid application fees to participate in this process. This Inc. industry award was awarded by a third party not affiliated with Sageview Capital. The number of nominees reviewed for the award and the number of award recipients were not available to Sageview Capital, and therefore, those numbers and the percentages of nominees that received each award, cannot be disclosed herein. This award is not indicative of Sageview Capital’s future performance and does not reflect the experience of, or any rating by, Sageview Capital’s investors, or clients, and generally does not relate to investment advisory services to clients.