PitchBook News - Cross-border M&A market hangs tough

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The Daily Pitch: VC

January 5, 2023

The Daily Pitch is powered by PitchBook’s industry-defining research and best-in-class data

In today's Daily Pitch, you'll find:

The cross-border M&A market holds steady and, despite unique risks, keeps its eyes on the long game.

From a tightening debt market to lengthening holding periods, here's what private equity investors expect to see in Europe's 2023.

Chart of the day: Time to close real assets funds dispersion, from our Global Real Assets Report.

Today's Top Stories

Cross-border activity by North American acquirers holds firm

The market for cross-border M&A, in which GPs and corporations seek new markets via acquisitions in other countries, held steady in 2022. Cross-border activity by North American acquirers has fully recovered from 2020 lows and closed slightly higher in value despite a decline in the overall M&A market.

Buying overseas companies has always involved a higher degree of risk and return due to unexpected changes in currencies and foreign regulations as well as geopolitical tensions. North American companies that successfully navigate these risks have reaped large gains, and the stability in last year's activity suggests their appetite is still intact.

In our recent analyst note, PitchBook analyst Jinny Choi takes region-by-region snapshots of the market and explores where potential headwinds could lead.

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Startup whiplash hits some sectors harder than others

(Yellow_man/Shutterstock)

There is no denying that 2022 was a challenging year for startups. But it wasn't equally difficult for every sector of the VC-backed ecosystem.

We use PitchBook data to examine how the deal value, deal count and valuations of 11 verticals fared in 2022. In a weird year, these were VC's most resilient and weakest tech sectors.

Recommended Reads

The University of California's deal with Blackstone to invest in its BREIT fund signals both good and bad news to investors. [The Wall Street Journal]

Growth slows at companies once PE firms exit, but new research finds they are still better off than those never taken over by buyout firms. [Institutional Investor]

Why are energy prices so high? Some experts blame deregulation. [The New York Times]

Since yesterday, the PitchBook Platform added:

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Quick Takes

	The Daily Benchmark
	2015 Vintage Global VC Funds
	VC Deals
	Belharra emerges with $130M
	SirionLabs extends Series D to $110M
	Saudi fintech company nabs $28M
	Product Science takes home $18M
	Portfolio Companies
	Microsoft will work with OpenAI to challenge Google
	Crypto company Wyre shutters
	Exits & IPOs
	PE, VC-backed grocery startup Kurly halts IPO
	Fundraising
	Nexus Ventures wants $700M fund for Indian, US startups

The Daily Benchmark

2015 Vintage Global VC Funds

Median IRR

24.35%

Top Quartile IRR

37.70%

2.29x

Median TVPI

Select top performers

Outlander 1 Archimedes

Index Ventures Growth III

360 Square

*IRR: net of fees

72 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

VC Deals

Belharra emerges with $130M

Biotech startup Belharra Therapeutics has come out of stealth with $130 million. The funding comprises a $50 million Series A led by Versant Ventures and $80 million from pharmaceutical company Genentech for a multiyear collaboration. Belharra specializes in drug discovery.

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SirionLabs extends Series D to $110M

SirionLabs, an AI-powered contract lifecycle management specialist, has secured an additional investment from Brookfield Growth, bringing its Series D total to $110 million. Partners Group led the round. Tiger Global and Sequoia India also participated.

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Saudi fintech company nabs $28M

Manafa has closed a $28 million Series A led by STV and oil giant Aramco's venture arm, Wa'ed Ventures, according to reports. The Saudi Arabia-based startup was founded in 2018 and offers crowdfunding as a way for enterprises to access capital.

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Product Science takes home $18M

App performance testing startup Product Science has landed $18 million in seed funding from backers like Slow Ventures, Coatue, and Mantis Ventures, TechCrunch reported. The startup was founded in 2021 by former Snapchat employees.

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PitchBook webinar: Emerging technology outlook

Join us for a webinar examining what lies ahead for emerging tech in 2023. From the fall of FTX to the rise of climate-tech investments, our analysts will dive into the findings from our recent analyst note about the industry and technology outlook for 2023, including the current trends and events that will affect spaces like crypto, AI, healthcare, and climate tech. Key topics include:

What emergent properties are likely to develop from continued innovation in foundational generative AI models.

How the Inflation Reduction Act may be fueling an increase in climate-tech investments.

What 2023 holds for the private market healthcare ecosystem, including the wider adoption of telehealth and the implications of lowering genomic sequencing costs on precision medicine.

Register now to secure your spot.

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Portfolio Companies

Microsoft will work with OpenAI to challenge Google

Bing, Microsoft's search engine competitor to Google, could get a generative AI update, The Information reported. Microsoft is planning to team up with OpenAI, the creator of chatbot ChatGPT, to integrate the technology into its search engine. Microsoft previously invested $1 billion in OpenAI, according to the report.

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Crypto company Wyre shutters

Despite its previous valuation of $1.5 billion, crypto payments specialist Wyre is shutting down, Axios reported. Wyre's former backers include Samsung's venture capital arm and Polaris Capital. Fintech startup Bolt was in talks to purchase Wyre, but the deal fell through in September.

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Exits & IPOs

PE, VC-backed grocery startup Kurly halts IPO

Grocery delivery service Kurly is calling off its plan to offer an IPO, TechCrunch reported. The South Korean startup's valuation, initially set at $3.3 billion, has reportedly dropped to $669 million. Kurly previously received funding from Anchor Equity Partners, Sequoia China and other investors.

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