Earnings illuminate strategy of PE firms

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The Daily Pitch: VC

February 28, 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:

Publicly traded US PE firms pumped money into their flagship funds last year, even as they seek to diversify, according to our Q4 2022 US Public PE Roundup.

Software companies have recently been the darlings of the otherwise-dormant take-private market.

With a $10B valuation, Wiz has become the world's largest cybersecurity unicorn.

Today's Top Stories

This earnings season, big PE firms searched for solutions

Four of the six big, publicly traded US private equity firms raised more in 2022 than the prior year, bucking the overall trend in dollars raised for PE investing strategies. Altogether, the GPs amassed $87 billion for PE funds in 2022.

That's despite their efforts to diversify away from PE as falling asset values depressed capital deployment and exit activity for multiple quarters in a row. Amid those challenges to closing buyouts and other typical PE deals, many firms staked expansions into more profitable strategies—think secondaries, private credit, real assets, real estate and insurance. 

Suffice it to say, the just-wrapped earnings season painted a complex picture. Our Q4 2022 US Public PE Roundup names the key growth drivers for these firms—and implications for other GPs—using financial data and executives' comments.

read it now

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Wiz hits $10B valuation to top cybersecurity charts

(senticus/Shutterstock)

Cybersecurity startup Wiz has raised $300 million at a $10 billion valuation, making it the most valuable VC-backed cybersecurity company.

The financing showed that leading companies can attract high revenue multiples even as valuations compress. Launched in 2021, Wiz has quickly become a contender in a field of cloud security companies led by Palo Alto Networks.

Recommended Reads

A short seller was up 70% last year after calling the tech crash—and he's got his eye on private equity. [Institutional Investor]

How the titans of tech investing are staying warm over the VC winter. [The Economist]

Rural hospitals are shuttering their labor and delivery wards, expanding so-called maternity care deserts. [The New York Times]

Since yesterday, the PitchBook Platform added:

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VC valuations

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704

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23

Funds

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Quick Takes

	The Daily Benchmark
	2019 Vintage US PE Funds
	Exit & IPOs
	Altria in talks to buy vaping company Njoy for $2.75B
	Ares sells Paradigm Midstream to Harvest Midstream
	Fundraising
	Stafford Capital holds $242M first close in carbon offset fund
	Spex Capital launches €100M healthtech fund
	New Markets Venture Partners launches $160M fund
	Corporate M&A
	Pfizer eyes drugmaker Seagen

The Daily Benchmark

2019 Vintage US PE Funds

Median IRR

26.21%

Top Quartile IRR

37.74%

1.32x

Median TVPI

Select top performers

Silver Canyon Building Fund

Great Hill Equity Partners VII

Chicago Pacific Founders Fund II

*IRR: net of fees

135 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

VC Deals

Skydio, a drone manufacturer, has raised a $230 million Series E led by Linse Capital. Andreessen Horowitz and Nvidia also joined, among others.

Astroscale, a satellite servicing startup, has secured more than $76 million in a Series G, with participation from Mitsubishi Electric, Yusaku Maezawa and others.

Generative AI specialist Typeface has raised a $65 million round with backing from Lightspeed, GV, Microsoft VC arm M12, and Menlo Ventures.

Flock, a London-based insurtech company that uses real-time data to incentivize safer driving, has raised a $38 million Series B led by Octopus Ventures.

Payment intelligence startup Pagos has secured a $34 million Series A led by Arbor Ventures.

Robin AI, which automates contract review and negotiation, has raised $10.5 million in a Series A led by Plural.

PE Deals

EQT has completed its $2.3 billion acquisition of South Korean security business SK Shieldus. The majority stake was sold by SK Square and a consortium led by Macquarie Infrastructure Asset Management.

Clayton, Dubilier & Rice has agreed to acquire Focus Financial Partners in an all-cash deal that values the wealth management partnership at more than $7 billion.

EQT is in talks to acquire Nasdaq-listed Radius Global Infrastructure, a telecommunications company, Bloomberg reported.

IK Partners has agreed to back Sweden's Responda Group, a business process outsourcing firm.

Clinical trial-focused healthcare company Syneos Health, listed on the Nasdaq, has hired investment banks in its search for a buyer, which could be another corporation or a PE firm, Reuters reported.

Seidler Equity Partners has purchased Unleashed Brands from MPK Equity Partners. Unleashed owns trampoline park Urban Air, which grew through backing from MPK, AHR Growth Partners and Mantucket Capital.

Turnspire Capital Partners has acquired USG Water Solutions, which provides services for small to medium-sized public water utilities.

Exit & IPOs

Altria in talks to buy vaping company Njoy for $2.75B

Njoy, an electric cigarette maker that has FDA approval, is in talks to be acquired by tobacco magnate Altria for $2.75 billion, The Wall Street Journal reported. Altria also reportedly plans to divest itself from Juul, a former e-cigarette market leader that was the subject of controversy and FDA banning.

View details

View 1 competitors »

Ares sells Paradigm Midstream to Harvest Midstream

Harvest Midstream has agreed to acquire shale-focused oil and gas pipeline company Paradigm Midstream from Ares Management, which has owned Paradigm since a 2018 buyout from Stonepeak Infrastructure Partners.

View details

View 6 competitors »

Fundraising

Stafford Capital holds $242M first close in carbon offset fund

Stafford Capital Partners has held an initial close on its carbon offset fund of $242 million. The fund, which is targeting $1 billion, secured commitments from the UK local government pension schemes of Essex, Leicestershire and the City and County of Swansea.

View fund

View 12 investments »

Spex Capital launches €100M healthtech fund

Spex Capital, a London-based firm focused on early-stage digital health startups, is launching a €100 million global healthtech fund. The fund will target seed to Series A deals with investments of up to €5 million.

View fund

View 7 investments »

New Markets Venture Partners launches $160M fund

New Markets Venture Partners has raised $160 million for its fifth fund, which will invest in early-stage education and workforce technology companies.

View fund

View 72 investments »

Corporate M&A

Pfizer eyes drugmaker Seagen

Pfizer is in the early stages of talks to acquire Seagen, a publicly listed biotech company that specializes in cancer treatments, The Wall Street Journal reported. Seagen currently has a market capitalization of over $30 billion.

View details

View 50 competitors »

Chart of the Day

Source: Q4 2022 PitchBook-NVCA Venture Monitor

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