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| In today's Daily Pitch, you'll find:
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Regime change arrives for private fund performance
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Private equity and venture capital funds are generating lower returns on their investments, with both strategies lagging far behind their 10-year averages on performance. Preliminary data from Q4 2022 shows PE and VC funds' quarterly horizon IRR at -0.2% and -0.8%, respectively.
Across all private market strategies, performance in that quarter was around 0.5%—far behind the key public equities index. But real assets and real estate funds more than pulled their weight, delivering investor returns well above 10-year averages.
Our latest Global Fund Performance Report uses data through Q3 2022, as well as some preliminary Q4 figures, to dive into the returns generated across private market strategies. |
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Information security industry wrestles with the good and bad of AI
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Buzz about AI's usefulness is everywhere. At a gathering of information security professionals, however, it was discussed as a threat as well as an asset. The RSA Conference, which took place last week in San Francisco, also serves to convene VCs, startups and acquirers in an annual launchpad for industry innovation.
Our latest analyst note covers notable startups and topics of focus such as uses for ChatGPT, passwordless authentication and postquantum cryptography. Looking ahead, panelists predicted VC and M&A dealmaking in information security will increase through the year. |
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Key dealmaking trends across the future of work software
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Volatility rocked markets across 2022, but the key sectors that saw dealmaking withstand pressures hint at which trends may define the 2020s. Amid general pullbacks in private dealmaking, work software saw the second-highest tallies of dealmaking ever at the expansion stage, raking in well over 1,000 completed transactions. The latest edition of Deloitte's Road to Next series explores work software dealmaking and broader trends in depth, including:
- How additional layers of analytics are folding atop all traditional functions
- The impact of evolving approaches to offices on workflows and dealmaking
- Datasets on post-money valuations, qualitative survey findings from Deloitte, and exits
Read it now |
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Market Map: Ecommerce investors' shopping spree slackens
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| (Ground Picture/Shutterstock) |
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| Explore ecommerce's roller coaster ride with our latest market map. We spotlight the purchase venue segment—companies that provide the systems, resources, integrations and applications that consumers use to make purchases across all kinds of storefronts—and break down which startups investors are placing their bets on. |
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UK watchdog to simplify IPO rules to boost tech listings
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| (Chris J Ratcliffe/Getty Images) |
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The UK's financial watchdog has proposed new rules to simplify domestic public listings in an effort to make London a more attractive destination for tech companies looking to go public.
The push to reform listing rules comes amid a recent fall in UK-based tech public listings. |
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Managers weigh private credit's potential at Milken conference
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| Eric Wilmes, head of private equity in the Americas for Singapore's GIC (Patrick T. Fallon/Getty Images) |
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The ongoing banking crisis is one of many tailwinds for private credit, according to limited and general partners at the Milken Institute's 2023 Global Conference.
Allocators are optimistic about the segment's future returns, arguing that the current vintage year is likely to be a high-water mark for the strategy, which benefits from higher yield and strong credit conditions. But a slowdown in fundraising and macroeconomic risks are tempering the enthusiasm. |
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Micro-fund managers feel deflated as LPs cool on VC
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| (Jenna O'Malley/PitchBook News) |
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The number of micro-funds—VC vehicles under $50 million—exploded during the last couple years of the boom cycle.
But now, raising capital has become so hard that managers may need to meet upward of 100 potential LPs to raise a significant amount of money for their next fund. Venture capital industry participants expect a chunk of those micro-funds never to raise a subsequent vehicle.
The widespread decline in exits means emerging managers haven't had a chance to prove themselves, and they may find the battle to raise funds isn't worth the fight. |
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Chinese VCs lived the Silicon Valley high life. Now the party's over. [Wired]
Most bankers may be contending with layoffs and shrinking bonuses, but for those in Saudi Arabia, salaries are surging. [Bloomberg]
Visualizing the assets and liabilities of US banks. [Visual Capitalist] |
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Since yesterday, the PitchBook Platform added:
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26
VC valuations
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2358
People
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559
Companies
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31
Funds
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The Daily Benchmark:
2017 Vintage Global Real Estate Funds
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Energy-as-a-service provider Redaptive has raised new funding from Linse Capital, in addition to backing from the Canada Pension Plan Investment Board, Honeywell and others, bringing its Series E to about $250 million.
Israeli medtech startup Magenta Medical, which is developing a miniature heart pump device, has secured $55 million in a round led by OrbiMed.
Healthy.io, a digital health diagnostic startup, has raised a $50 million Series D led by Schusterman Family Investments.
Tarabut Gateway, an open banking startup, has raised $32 million backed by Visa, Tiger Global, Pinnacle Capital and Aljazira Capital, Bloomberg reported.
Berlin-based engineering intelligence startup Spread has raised a $16 million Series A led by HV Capital.
OpenEnvoy, an employer payments startup, has secured $15 million in a round led by RRE Ventures.
Partanna, a startup developing concrete that removes carbon dioxide from the atmosphere, has raised a $12 million pre-seed from Cherubic Ventures at a $190 million valuation, TechCrunch reported.
UK fashion marketplace Secret Sales has raised a $10 million Series B from investors including Belerion Capital and Perwyn.
Dutch biotech startup Anavo Therapeutics has secured an additional €8.5 million for its seed round, bringing the total to €28 million. Investors included MRL Ventures Fund, Taiho Ventures and M Ventures.
Tangem, a Swiss provider of secure hardware wallet solutions, has raised $8 million in a round led by Shima Capital.
MassMutual Ventures has led a €7 million Series A extension for HelloBetter, a developer of digital therapeutics for mental health, Sifted reported.
Italian crypto art startup Reasoned Art has raised €1.4 million in a seed round that included South Korea's Woori Technology Investment. |
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PitchBook webinar: What is the future of VC exits?
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Today's VC market is one of unprecedented company data and investment options. These have proven to both help and hinder investors. Despite enabling a greater range of strategies and more market awareness, the volume of information to process has greatly complicated deal sourcing.
A panel of speakers from PitchBook's product and analyst teams will share how VC investors can succeed in the current market and what tools can guide them to the best deals. Key topics include:
- Learn the current trends of the exit market and what might come in 2023.
- Understand how PitchBook is creating tools that help our users win.
- Learn how the PitchBook VC Exit Predictor can make market research and deal sourcing more efficient.
Register now to secure your spot. |
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Investindustrial has held the final close of its third growth fund on €1.1 billion. The fund will focus on European lower-middle-market companies, especially those in Italy, Spain, Portugal and Switzerland.
OGCI Climate Investments, the investment arm of 12 oil and gas companies including BP and Shell, is targeting up to $750 million for a hardware-focused climate fund, Axios reported.
Matter Venture Partners, a new fund started by Wen Hsieh, is raising $200 million from investors including Kleiner Perkins and TSMC, Reuters reported.
Hong Kong-based CMCC Global is expected to launch a $100 million Asia-focused blockchain fund targeting Series A and B companies, Bloomberg reported. |
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| Blackstone has made a minority investment in FTV Capital, a growth equity firm that invests across the enterprise technology, financial services and payments sectors. |
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PGIM, the global asset management business of Prudential Financial, has agreed to buy private credit firm Deerpath Capital Management, which has over $5 billion in AUM.
Darden Restaurants has agreed to acquire Ruth's Hospitality Group for roughly $715 million. Darden's portfolio includes restaurant brands Olive Garden and LongHorn Steakhouse. |
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