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The Daily Pitch: VC

March 9, 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:

A nuanced analysis of the top five arguments against the use of ESG strategies.

PitchBook analysts explore the technologies promising to disrupt public transportation.

Unicorns have mostly been able to avoid raising funding at lower valuations, but Shein's down round may be a sign of what's to come.

Today's Top Stories

Sorting through the top criticisms of ESG

Tracking and mitigating material environmental, social and governance-related risks within investments strikes some GPs and LPs as common sense. But the ESG strategy rankles some investors, especially those who view the now-politicized risk evaluation framework as a form of virtue signaling.

In our latest analyst note, Concerns About and Criticisms of ESG, analyst Anikka Villegas dissects five oft-repeated arguments against the use of ESG. The report spells out which concerns are based in reality and which are born from misinformation.

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Shein's down round is a sign of what's ahead for global unicorns

(FellowNeko/Shutterstock)

Chinese fast-fashion retailer Shein is raising $2 billion ahead of a planned US IPO, Reuters reported. The round will value the company at $64 billion, a 36% valuation haircut from last year, and will draw investment from Mubadala, General Atlantic and Sequoia China.

Flush with cash from the former bull market, global unicorns have mostly been able to avoid raising funding at lower valuations. But impending down rounds at companies like Shein and Stripe show that even the largest VC-backed companies are now accepting reality.

PitchBook's global unicorn index remains modestly higher than it was a year ago, defying the sharp contraction in public equities. US-based unicorns have even fared better, with our real-time tracker showing a 5.9% rise from a year ago.

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Transit tech's ambitious future

The COVID-19 pandemic made global public transit come to a near standstill. Ridership and revenue fell exponentially, making an already tenuous situation more precarious. Flashing forward to today, past the lockdown phase of the pandemic and flush with federal funding and renewed attention, transportation agencies see an opportunity to disrupt the status quo.

Transit tech has the potential to transform public transportation—and in some places, it already is. From startups addressing mandates to reduce CO2 emissions while boosting ridership, to entrepreneurs at the forefront of mobility-as-a-service, transit tech has a bright future. Our latest analyst note explores the key players, deals and trends to watch as public transportation agencies look to what's next.

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Sweden leads, totals slip: Nordic VC trends for 2022 in 6 charts

(Antony McAulay/Shutterstock)

Venture dealmaking in the Nordics slowed last year, but it still reached its second-highest figures to date.

Check out these six charts detailing the most important trends in one of Europe's largest startup ecosystems.

Recommended Reads

M&A bankers have been stumped on how to predict the volume or size of deals to come in 2023. [Reuters]

In a breakthrough, researchers have created a new superconductor that can operate at room temperature and a much lower pressure. [The Wall Street Journal]

China takes the top four spots in a ranking of banks by brand value. The US scoops eight of 10 spots in a list of asset managers' brand values, however. [Visual Capitalist]

Since yesterday, the PitchBook Platform added:

10

VC valuations

2101

People

648

Companies

29

Funds

See what our data software can do

The Daily Benchmark:
2018 Vintage Global PE Funds with more than $1B

Median IRR

22.74%

Top Quartile IRR

33.30%

1.49x

Median TVPI

Select top performers

Oaktree Special Situations Fund II

Audax Private Equity Fund VI

Ridgemont Equity Partners III

*IRR: net of fees

69 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

VC Deals

Consensus, a video demo automation specialist, has secured a $110 million investment from Sumeru Equity Partners.

Humane, a San Francisco-based AI startup, has raised a $100 million Series C led by Kindred Ventures, with participation from Tiger Global, OpenAI CEO Sam Altman, Volvo's Car Tech Fund, Qualcomm Ventures and Microsoft.

Overhaul, an Austin-based supply chain software specialist, has secured a $73 million investment, consisting of $38 million of growth capital and $35 million in debt. Edison Partners led the investment, with backing from StepStone Group.

Paragonix Technologies, an organ transplant specialist, has raised a $24 million Series B led by Signet Healthcare Partners.

Matchday, the developer of a gaming and social platform for soccer fans, has raised $21 million in seed funding. The startup is backed by investors including Lionel Messi's Play Time, Courtside Ventures, Hack VC and Horizons Ventures.

Spareka, a Paris-based appliance repair specialist, has raised €11 million (about $11.6 million) from investors including Demeter and La Banque des Territoires.

German cybersecurity startup Edgeless Systems has secured €5 million (about $5.3 million) in a round led by SquareOne.

Ufurnish.com, a London-based furniture marketplace provider, has raised £3.4 million (about $4 million) from angel investors, Silicon Republic reported.

PitchBook's 2023 Pick-the-Bracket Battle

The NCAA basketball tournaments are just around the corner, and before any team steps onto the court, you're invited to participate in our 2023 Pick-the-Bracket Battles.

For the first time, PitchBook is facilitating two March Madness brackets—the NCAA women's and men's basketball tournaments—for double the fun and madness! This year, our first-place winners will secure a travel gift card to the airline of their choice, with more awesome prizes for second and third place.

Anyone from your firm is eligible to play, so invite your co-workers and be sure to finalize your brackets before the deadline. The men's bracket is due March 16 at 9:15 a.m. PST | 12:15 p.m. EST and the women's bracket is due March 17 at 8:30 a.m. PST | 11:30 a.m. EST.

Sign up below!

Men's Pick-the-Bracket Battle

Women's Pick-the-Bracket Battle

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PE Deals

Platinum Equity-backed Solenis has agreed to buy disinfectant maker Diversey for $4.6 billion in an all-cash deal. Prior to its 2021 IPO, Diversey was owned by Bain Capital, which still holds a 73% stake in Diversey and will receive $7.84 per share.

Ares Management has made $375 million equity investment in Oaktree Capital-backed WHP Global. The deal values WHP, a retail brand management firm which owns Toys R Us and Express, at $1.6 billion.

Home goods retailer Bed Bath & Beyond has raised $135 million in an equity offering, bringing its total raised to $360 million toward a billion-dollar goal in its attempt to stave off bankruptcy, Reuters reported.

HIG Capital has purchased Polygon, a provider of integrated healthcare maintenance services to hospitals in Italy and Spain.

Insight Investment Group has acquired the Russian leasing division of farm equipment manufacturer Deere, Reuters reported. While financial terms were not disclosed, Insight recently issued bonds valued at $1.32 billion that were, in part, used for the purchase.

Exit & IPOs

Cresta Fund Management has agreed to sell a 49.9% stake in renewable natural gas company LF Bioenergy to Marathon Petroleum for $50 million. The deal calls for an additional $50 million payment if the company meets certain targets.

Capital markets platform Trading Technologies International has acquired London-based AxeTrading, a VC-backed fixed income trading platform that previously raised capital from investors including International Finance Corporation.

Ieva Group has acquired Intuiskin, the parent company of skin care and hair care brands IOMA, IOMA Hair and Made with Care. Ieva is backed by Unilever, Crédit Mutuel Equity and Groupe SEB.

Fundraising

New Mountain Capital is targeting $12 billion for a new flagship fund, Fund VII, Buyouts reported. Its Fund VI closed on $9.6 billion in 2021.

Middle market-focused Riverside Company has closed its largest PE fund to date, Riverside Micro-Cap Fund VI, on $1.87 billion, more than 50% larger than its predecessor.

German VC firm La Famiglia has raised €165 million for its seed fund targeting B2B startups, with an additional €90 million for its growth vehicle focusing on investments from Series B onward.

Transform Ventures and Alpha Sigma Capital are partnering to raise $100 million between two funds to invest in blockchain and Web3 startups, Reuters reported.

Chart of the Day

Source: Q4 2022 PitchBook-NVCA Venture Monitor

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PitchBook News - Dissecting the ESG debate

Key phrases

Older messages

Foodtech's road to recovery

VC's investor friendliness spikes

B2B fintech startups draw VC favor

Stripe's pricey share rescue plan

Healthcare IT's promise and peril

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