PitchBook News - A bumpy ride for insurtech

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The Daily Pitch: VC

May 8, 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:

The saga of a lucrative M&A deal highlights the battle between two leveraged finance segments.

Our 2023 Insurtech Overview lays out the industry's bumpy ride.

Our Unicorn Indexes show that raising funds may be tough, but billion-dollar companies aren't showing widespread signs of crisis.

Today's Top Stories

Buckle up for insurtech's ride

Insurtech saw huge growth during the pandemic as newly emerging technology startups competed with traditional insurance carriers, but over the last 18 months, the vertical hasn't fared as well.

How bumpy has insurtech's ride been? Our 2023 Insurtech Overview lays it all out.

Insurtech companies raised $9.4 billion across 617 deals in 2022, a 42% decline in deal value year-over-year.

Exit activity also dwindled. Last year, $2.4 billion in exit value was generated, as opposed to $36.6 billion in 2021.

Still, opportunities remain for investors in segments including underwriting and commercial insurance.

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Squid vs. whale: Leveraged loan saga points to battle in private credit world

(Atomic Roderick/Shutterstock)

A $2.75 billion financing to back Blackstone's LBO of climate-tech specialist Copeland has resurfaced in the syndicated leveraged loan market—six months after it first emerged as a marquee transaction in the private credit sector.

The deal, a rare instance of a lucrative M&A pact in today's uncertain economic environment, highlights the market-share tussle between the two leveraged finance segments.

Market volatility has brought headwinds to both the syndicated loan and private credit asset classes, intensifying the competition for deals. The Copeland saga shows banks aren't throwing in the towel when it comes to higher-risk, higher-reward deals.

Trust is key to partnership, and SVB is committed to regaining yours

With the strength and stability of First Citizens behind Silicon Valley Bank, it continues to be positioned to deliver specialized lending and financial solutions for innovation companies and investors.

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VC Deals

Bengaluru-based retail company Ace Turtle has raised a $34 million Series B led by Vertex Growth, SBI Investment, Farglory Group and others.

Hackajob, a London-based technical hiring platform, has raised a $25 million Series B led by Volition Capital.

Inbox Health, a medical-billing SaaS company, has raised a $22.5 million Series B led by Ten Coves Capital.

Indonesian supply chain startup Praktis has secured a $20 million Series A led by East Ventures.

Netherlands-based Instruqt has raised a €15 million Series A led by Blossom Capital for its marketing platform for SaaS companies.

Setscale, fintech provider serving small and medium-sized businesses, has launched out of stealth with $9.5 million in seed funding and up to $70 million in debt.

Hoxton Ventures has led a $6.2 million seed extension round for MultiOmic Health. The London-based startup develops AI-enabled precision medicine.

Berlin-based virtual restaurant franchise Tasty Urban has raised €1.5 million in a round led by Earlybird.

PE Deals

Vice Media's senior lenders, including Fortress Investment Group and Soros Fund Management, are lining up a deal to buy the company out of bankruptcy in a reorganization that would value Vice at $400 million, including debt, The Wall Street Journal reported. The deal would cut out TPG, Sixth Street and other shareholders.

Silver Lake has increased its bid for Software AG by €2 to €32 per share, valuing the German company at around €2.4 billion.

Mubadala has sold a 7.6% stake in Abu Dhabi Islamic Bank to Emirates International Investment Co. The stake is valued at more than $780 million, based on the bank's stock price, Reuters reported.

Cerberus Capital Management and Axactor have agreed to buy a distressed loan portfolio valued at €1.1 billion from Spain's Santander, Expansión reported.

DeA Capital has acquired Italy's Magic. The company provides packaging for the food, medical, industrial and hygiene industries.

Astorg has agreed to acquire Hg Medical, which makes orthopedic implants, from Nord Holding.

Exit & IPOs

Meta is trading its ownership of Kustomer for a passive minority stake and giving stakes to Redpoint Ventures, Battery Ventures and Boldstart Ventures, The Wall Street Journal reported. The deal reportedly values Kustomer at $250 million. Meta bought the business software company for $1 billion.

Acelyrin has raised $540 million in its IPO. The biopharma company, which started trading on the Nasdaq on Friday, issued 30 million shares at $18 apiece.

Fundraising

Bain Capital has raised about $6 billion for its fifth and largest Asia-focused fund, Reuters reported. The vehicle, which is expected to invest heavily in Japan, is nearing its final close.

Investors

Oklahoma has barred 13 financial institutions from doing business with the state due to so-called boycotts of fossil fuels or neglecting to answer a survey. Firms and banks on the list include BlackRock, State Street, JP Morgan Chase and Lexington Partners.

Truffle Private Markets has launched a US mid-market PE program aimed at wealth managers and family offices across Europe. Truffle uses the collective scale of its clients to access funds.

Chart of the Day

"Asian-headquartered funds raised more than $5.5 billion, a slight dip from each of the last three years. A growing demand exists for nonbank lending in Asia, given the uptick in sponsored deal activity in recent years, but the creditor-debtor regimes vary greatly and can make it difficult for direct lending funds to establish a foothold."

Source: PitchBook's 2022 Annual Global Private Debt Report

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PitchBook News - A bumpy ride for insurtech

Trust is key to partnership, and SVB is committed to regaining yours

Older messages

Startups look for a SAFE haven

The dawn of AI transformation

M&A is up for a fight on antitrust

Private capital returns see a regime change

M&A shops the discount rack

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