PitchBook News - Denominator effect deflates fundraising

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The Daily Pitch: VC

February 23, 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:

PitchBook analysts break down the causes and ramifications of LPs' pullback from private fund strategies.

Why employee ownership is critical for startups looking to attract and retain talent.

China is looking to PE investors in its latest effort to prop up its weakened real estate market.

Today's Top Stories

Fundraising declines as LPs assess damage from denominator effect

In 2022, LPs cut back their commitments across all private fund strategies amid questionably high valuation marks and macroeconomic headwinds. But the denominator effect, caused by public market values falling faster than those of alternative assets, was arguably the primary reason for the LP pullback.

Another factor in declining commitments was the fear that slowing distributions could lead to an inability to meet capital calls. But our data shows that scenario didn't play out in 2022.

Other takeaways from our latest Global Private Market Fundraising Report include:

While VC saw the smallest decline in fundraising compared to other private market strategies, we expect LP support of VC to drop further in 2023 amid a decline in distributions from IPOs or other exit options.

Real estate and fund-of-funds fundraising hit their lowest points in 10 years.

read the report

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Index Ventures: Employee ownership is key for European startups' success

(New Africa/Shutterstock)

European startups have been slow to share ownership with employees, but new research from Index Ventures-led campaign Not Optional suggests that they are finally starting to embrace it.

We spoke to Dominic Jacquesson, VP of insight and talent at Index Ventures, about how employee ownership can benefit Europe's startup ecosystem.

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A message from DealCloud, by Intapp

Progress streamlines its corporate development processes with DealCloud

In today's competitive market, companies like Progress are tasked with making acquisitions that propel corporate growth in new and exciting ways. Whether the company's acquisition targets are identified or unknown, the relationship management and business development processes need to be handled with care by corporate development professionals at all levels.

Download the in-depth case study to learn how Progress manages its corporate development pipeline and relationships more effectively leveraging DealCloud's technology.

Download the case study.

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Vytalize grabs $100M as value-based healthcare model thrives

(Yuri A/Shutterstock)

The value-based care model, which reimburses healthcare providers based on the success of treatment, has become popular with Medicare and other government agencies, and even some health insurers.

Vytalize Health is the latest value-based care enabler for seniors that has attracted meaningful venture funding with a $100 million Series B.

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The 10 most active PE investors in European healthcare

(nito/Shutterstock)

Private equity deals in European healthcare increased in the wake of the pandemic, and dealmaking remains relatively robust as firms look to consolidate a fragmented market.

Here are the 10 most active PE investors in the region's healthcare sector over the past five years by total deals.

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China looks to spur PE investment in fragile real estate market

(Victor Runov/Shutterstock)

China has launched a pilot program intended to open its real estate market to private equity funds and foreign investors, marking the country's latest effort to revive its weakened housing market.

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Recommended Reads

Tech layoffs are feeding a new startup surge. [Wired]

How hybrid work is changing the offices of the future. [The Wall Street Journal]

All eyes are on Silicon Valley Bank as it faces scrutiny over an investment decision that left the bank with an unrealized $15 billion loss. [Financial Times]

Since yesterday, the PitchBook Platform added:

23

VC valuations

2610

People

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31

Funds

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Quick Takes

	The Daily Benchmark
	2015 Vintage Global Funds-of-Funds
	Exit & IPOs
	LLCP to exit GL Education
	Maven sells Titan Wealth stake to Parthenon
	Fundraising
	Cypher Capital seeks $100M+ for crypto vehicle
	Wisconsin governor pitches $75M VC fund
	Amadeus, Apex hold first close of deep-tech fund
	Corporate M&A
	Exchange owner Euronext bids $5.8B for Allfunds

The Daily Benchmark

2015 Vintage Global Funds-of-Funds

Median IRR

22.22%

Top Quartile IRR

27.84%

2.09x

Median TVPI

Select top performers

TrueBridge Direct Fund

TrueBridge-Kauffman Fellows Endowment Fund IV

HarbourVest Partners X-Venture

*IRR: net of fees

55 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

VC Deals

Car financing platform Carmoola has raised £103.5 million in debt and equity. QED Investors led the equity round, and Natwest provided the debt facility.

Johannesburg-based Planet42 has secured $100 million in a round led by Naspers and ARS Holdings. The startup rents out used cars via a subscription model.

Lightspeed has led a $43 million Series B for storytelling generative AI startup Tome. Angel investors including former Google CEO Eric Schmidt and Stability AI CEO Emad Mostaque also joined.

Finch, a startup creating APIs for employment services like payroll and benefits, has raised a $40 million Series B led by General Catalyst and Menlo Ventures.

Chile-based Buk, a human resources software specialist, has secured a $35 million Series B led by Base10 Partners and Greenoaks.

Agtech startup Source.ag has raised a $23 million Series A led by Astanor Ventures.

Electric vehicle software startup Electra has secured a $21 million round led by United Ventures.

Metomic, a cybersecurity startup based in London, has raised a $20 million Series A led by Evolution Equity Partners.

Andreessen Horowitz has led a $12.5 million Series A for machine learning startup Replicate, TechCrunch reported.

DrDoctor, which offers a patient engagement platform, has raised £10 million in a round led by YFM Equity Partners.

JNE Invest has led a $1.25 million investment for Stockholm-based GoFrendly. The startup's app helps women meet new friends.

PE Deals

Abu Dhabi Investment Authority is mulling a bid for a 34% stake in the UK's Associated British Ports worth £2 billion, Bloomberg reported. The Canada Pension Plan Investment Board is selling the stake.

Centerbridge Partners and GIC Real Estate have agreed to take Nasdaq-listed Indus Realty Trust private by buying all outstanding shares for roughly $868 million in cash, or $67 per share.

Copenhagen Infrastructure Partners has acquired the Envo Biogas plant, located in Denmark, from Anaergia, a Canadian renewable natural gas project developer.

Dry Line Partners has acquired VizExplorer, which provides business intelligence software to the casino gaming industry.

Beach Point Capital Management has made a majority investment in Brightmore Brands, a chain of 18 retail thrift stores formed through the combination of two independent operations.

Channel Equity Partners has led a Series A growth equity funding round for Mappedin, whose software creates indoor maps for venues such as malls, airports and offices.

Italian private equity firm Fondo Strategico Italiano has increased its stake in asset manager Anima Holding from 7% to 9%.

BGF has invested £5 million in Socitm Advisory, a UK company that helps improve public sector services.

The Riverside Company has invested in German workplace management SaaS provider Gastromatic.

Exit & IPOs

LLCP to exit GL Education

Levine Leichtman Capital Partners has agreed to sell education assessment company GL Education to Renaissance, an edtech specialist backed by Blackstone and Francisco Partners.

View details

View similar company »

Maven sells Titan Wealth stake to Parthenon

Maven has sold part of its stake in wealth manager Titan Wealth to Parthenon Capital. Maven initially invested in Titan in 2021.

View details

View similar company »

Fundraising

Cypher Capital seeks $100M+ for crypto vehicle

Cypher Capital, a Dubai-based VC firm with former Binance M&A fund head Bill Qian as chairman, plans to raise more than $100 million for a crypto-focused fund, Bloomberg reported.

View details

View 35 investments »

Wisconsin governor pitches $75M VC fund

Wisconsin Gov. Tony Evers has allocated $75 million for a state-run VC fund to be overseen by Wisconsin Economic Development in his proposed budget, according to reports.

View details

View 214 investments »

Amadeus, Apex hold first close of deep-tech fund

Amadeus Capital Partners and Apex Ventures have held a €28 million (about $30 million) first close of their joint deep-tech fund. The vehicle, which has a target of €80 million, will be used to back early-stage startups, predominantly based in the DACH region.

View fund

View 169 investments »

Corporate M&A

Exchange owner Euronext bids $5.8B for Allfunds

Exchange operator Euronext has submitted a €5.5 billion (about $5.8 billion) unsolicited bid of cash and shares for Allfunds. Euronext has already held discussions with Hellman & Friedman and BNP Paribas, which together own 46.4% of Allfunds.

View details

View 2 competitors »

Chart of the Day

Source: PitchBook's 2022 Annual Global M&A Report

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PitchBook News - Denominator effect deflates fundraising

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