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| In today's Daily Pitch, you'll find:
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VC Dealmaking Indicator: A snap back to reality as founders hit gravity
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It has been a dizzying few years for startups and investors. The COVID-19 pandemic created booms and busts that led to the best dealmaking environment for startups since 2010, according to PitchBook's VC Dealmaking Indicator. The Indicator tracks deal-level data to quantify whether the negotiating environment is more friendly to startups or investors.
The market has made a sharp turn, reversing to become one of the most investor-friendly environments on record—and there's no sign of any changes on the horizon.
It’s a tale of two extremes, demonstrating just how unpredictable this market has been. The Indicator also incorporates the ratio of capital demand to supply, a measure of how much capital startups could require to sustain their businesses, tracked against how much they've raised already. There could be trouble ahead as demand starts to outstrip supply. |
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UK launches $445M+ plan to boost tech investment
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Prime Minister Rishi Sunak
(Leon Neal/Getty Images) |
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The UK has unveiled a more than $445 million package to bolster early-stage investment in science and technology.
The government has previously faced criticism over its perceived lack of support for tech in both the private and public markets. |
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A message from PACT Philadelphia
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Philadelphia's VC ecosystem proved resilient in 2022 and now counts itself in the top five ecosystems in the United States in terms of deal flow. The city has taken in more than 1,000 investments over the past two years, worth $12.7 billion altogether. Long known as a biotech hub, Philadelphia is also gaining ground in fintech and consumer and enterprise tech. Perhaps the biggest shift is outside investment—New York- and Bay Area-based investors have supercharged their activity in Philadelphia over the past two years.
In conjunction with PitchBook, PACT Philadelphia has released its 2022 Philadelphia Venture Report. The report covers dealmaking trends across sectors, stages, exits, and fundraising.
To download the report, click here. |
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Nordic private capital stands its ground in tough market
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The Nordic region was remarkably resilient to the toxic mix of rising interest rates and geopolitical turmoil that hit European private capital deals last year.
Nordic private equity notched a more than 6% increase in deal volume year-over-year, while venture capital recorded its second-best year for deal value. Our 2023 Nordic Private Capital Breakdown details how the region remained steadfast. Key takeaways include:
- PE exits saw their second-best year in 2022, with the region's public listings accounting for over a third of those occurring in Europe.
- VC fundraising was weaker in the Nordics compared to the rest of Europe—and was dominated by one large player, EQT. The firm was alone in raising a VC fund over €1 billion.
- VC tallied a record €5 billion in exits by acquisition.
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Qualtrics buyout for $12B could set take-private record for 2023
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| (whiteMocca/Shutterstock) |
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Private equity giant Silver Lake, in partnership with Canada's largest public pension plan, is targeting B2B SaaS company Qualtrics in what would be the largest take-private of 2023 so far. Silver Lake and the Canada Pension Plan Investment Board hope to acquire the company from its majority owner, SAP, which has said it wants to divest its 71% stake.
The offer marks another potentially massive take-private of a software company, a sector that has led the pack in deal size, even amid slowing transaction counts. |
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Gaming continued leveling up in 2022
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Video games are everywhere—from musicians performing concerts inside "Fortnite" arenas, to esports championships broadcast on ESPN. In 2020 alone, game sales were nearly triple the revenue generated by all major US sports, digital music sales and cinema box office sales combined.
As a result, digital entertainment has seen massive growth over the past four years, gaining the attention of investors. Despite some drops in deal activity, 2022 proved to be a robust year for venture investment in gaming, according to our recent Emerging Tech Research report on the space. Key takeaways include:
- While 2022 saw the industry's first contraction in global VC funding in five years—down to $13.3 billion from $16.6 billion in 2021—totals remain historically high.
- Exit value totaled $2.5 billion in 2022, down from $30.5 billion in 2020—amid a difficult regulatory climate following Microsoft's proposed acquisition of Activision Blizzard.
- The market is expected to reach $562.3 billion by 2026.
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Don't fear AI: The West may suffer from too little automation in jobs, not too much. [The Economist]
A fission startup seeks to make renewable nuclear power a reality in the next decade. [Sifted]
The FDA is redefining "healthy"—and the food industry is pushing back. [The Washington Post] |
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Since yesterday, the PitchBook Platform added:
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14
VC valuations
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2172
People
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690
Companies
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14
Funds
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2014 Vintage Global Real Estate Funds
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London-based consumer lender Abound has raised over £500 million in debt and equity. Investors in the round include K3 Ventures, GSR Ventures and Hambro Perks.
Bicara Therapeutics, a biotech startup specializing in cancer treatments, has raised a $108 million Series B co-led by Red Tree Venture Capital and RA Capital Management.
Defense tech startup Chaos Industries has received a $70 million Series A led by 8VC.
Self-driving car software startup Ghost Autonomy has secured a $45 million investment, according to SEC filings. Previous backers include Sutter Hill Ventures and Khosla Ventures.
Shoulder Innovations, a startup creating shoulder replacement implants, has raised a $42 million Series D led by Gilde Healthcare Partners.
N2F, a French provider of expense management software, has raised €24 million in a round led by growth equity firm PSG Equity.
Singh Capital Partners, BFG Partners and Watchfire Ventures were among investors in a more than $20 million Series A for food startup Oats Overnight.
SiYi Intelligence, a startup creating rehabilitation services and products for clinical and home use, has secured a nearly $15 million Series A led by Chengdu Bio-town Equity Investment Fund and Tao Capital.
Chromologics, a Copenhagen-based maker of natural food coloring, has extended its seed financing with €7.1 million. Investors in the round, which now totals €12.6 million, included Novo Holdings and Doehler Ventures.
Shifted Energy, which provides a platform for energy resources management, has raised $4.3 million in seed funding co-led by Epic Ventures and Kapor Capital.
EQT Ventures has led a £3 million seed investment in London-based ViridiCO2. The startup's technology converts waste carbon dioxide into chemical products. |
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Goldman Sachs Asset Management, Bain Capital, TDR Capital and TPG are among the rival bidders vying to acquire Subway in a deal that could value the sandwich chain at $10 billion, Sky News reported.
Saudi Arabia's Public Investment Fund is planning to buy a minority stake in luxury hospitality group Rocco Forte Hotels for $1.4 billion, Bloomberg reported.
Outsourcing company Capita has agreed to sell its resourcing businesses Capita Resourcing, HR Solutions and ThirtyThree to Inspirit Capital for £21 million.
TPG's climate investing strategy has invested $150 million in solar energy specialist Palmetto.
Permira is considering a bid for VAM Investments-backed Gruppo Florence, an Italian luxury clothing manufacturer, Reuters reported.
Italian investment bank Cassa Depositi e Prestiti has made a joint bid alongside Australia's Macquarie for Telecom Italia's fixed-line network, Sparkle, following a previous offer made by KKR.
The Carlyle Group has agreed to sell PrimeFlight Aviation Services to Capitol Meridian Partners and The Sterling Group.
Atairos has agreed to acquire LifeLabs Learning, which provides customized professional development plans to more than 2,000 organizations.
Gemspring Capital-backed commercial security company Security 101 has acquired Washington-based Security Solutions Northwest in a bid to expand its operations in the state. |
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| Meal-kit company Gousto has seen its valuation fall from $1.7 billion to less than $300 million following a £50 million funding round last month, Sky News reported. The company is backed by investors including SoftBank, Unilever Ventures and MMC Ventures. |
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Tobacco giant Altria has agreed to purchase e-cigarette company Njoy for $2.75 billion in cash. Njoy was acquired by Mudrick Capital Management and Homewood Capital in 2017, and has received growth equity backing from several other firms.
KKR has sold the last of its stake in Malaysia's Weststar Aviation Services, which offers helicopter transportation services to the offshore oil and gas industry, nearly 10 years after its first investment. |
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| Emkan Capital, a Saudi Arabia-based venture capital firm, has closed its inaugural fund with $31 million to invest in early-stage tech startups, according to reports. |
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| Abu Dhabi sovereign wealth fund ADQ and conglomerate IHC plan to create a new investment manager involved in venture capital, private equity, private credit and public equities. General Atlantic will also partner with the new firm. |
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