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| In today's Daily Pitch, you'll find:
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Europe's rise and fall in VC valuations
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European venture valuations have yet to fully reflect the tough market for startups, with most stages still seeing increases in the median price tag. Only early-stage and venture growth saw the median pre-money valuation drop.
With more corrections anticipated as the year progresses, our Q1 2023 European VC Valuations Report covers where valuations currently stand across stages, geographies and exits. Key takeaways include:
- Nontraditional investor participation in VC deals remains subdued, with venture growth seeing the largest decline.
- Combined post-money valuations of European unicorns plateaued in Q1.
- Having reached a decade low in 2022, down rounds took a larger share of all VC deals.
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Global M&A shows resilience as prices drop
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| (saicle/Shutterstock) |
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Global M&A deal activity held up well in Q1: Financial and corporate buyers closed roughly 10,625 deals for an estimated $993 billion.
One reason for this robust performance is that sellers are increasingly willing to accept lower valuations due to the down market. At the end of March, the 12-month rolling median revenue multiple for M&A deals in North America and Europe stood at 1.6x, 20% lower than the peak of 2x in 2021. |
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A message from DealCloud by Intapp
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Tips for deal origination in leveraged finance and debt capital markets
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As leveraged finance and debt capital markets dealmakers continue to face economic market shifts, many are turning to long-held relationships, data, and technology to help originate deals.
Effectively utilized technology can help leveraged finance firms to automate outreach, better manage compliance, integrate third-party data into their workflows, and develop key relationships with target companies. When debt capital markets firms unlock new efficiencies, they unlock the potential for new deals as well.
Read this article from DealCloud by Intapp to learn more about creating a single source of truth that enables leveraged finance professionals to succeed. |
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Q&A: Nova's Chris Beall on how infrastructure investing defies inflation
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| (Roschetzky Photography/Shutterstock) |
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Investing in private infrastructure can provide a hedge against inflation. That's because the scarce, expensive and unique assets tend to get tied up in lucrative contracts that allow revenue to increase with inflation.
But it's not that simple, Nova Infrastructure's managing partner, Chris Beall, told PitchBook. He explains how GPs and managers actually deliver on the promise of an inflation-resistant investment. |
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Impact investor Illumen Capital closes $168M vehicle
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| (Ruslan Grumble/Shutterstock) |
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Illumen Capital, a fund-of-funds focused on racial and gender diversity in investing, has closed its second fund on $168 million. The fund will invest across education, health and wellness, climate and sustainability, and financial inclusion.
"Each of these areas represent massive markets that are undergoing increasing disruption and volatility. We know from our research that this increase in volatility and disruption leads to many retreating to their biases," said Daryn Dodson, the firm's managing partner and CEO. |
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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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A survey of 60 of crypto's most influential companies finds that many lack basic guardrails. [Bloomberg]
How boards are responding to investor and political pushback on ESG goals. [Fortune]
The jobs market goes through boom-and-bust cycles, but some experts are insisting that this time is different. Will lost white-collar jobs be coming back? [The Wall Street Journal] |
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Since yesterday, the PitchBook Platform added:
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34
VC valuations
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2174
People
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634
Companies
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31
Funds
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The Daily Benchmark:
2016 Vintage Global PE Funds
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A message from Wing Venture Capital
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Meet the best in enterprise tech
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The Enterprise Tech 30 is out now
The Enterprise Tech 30, now in its fifth year, identifies the best companies in enterprise tech, as chosen by an exclusive group of 96 venture capitalists across 74 firms. It serves as a platform for the tech industry to identify, learn about, and build relationships with today's most promising private companies.
This year's cohort is unlike any of the previous four. Over two-thirds are new to the ET30. Nearly 30% of the companies on the list are in the generative AI category. And half are in the developer platform and tools category, an increase from years past.
Discover the trends, explore the list, and meet the winners at enterprisetech30.com.
See the list |
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African asset financing platform M-Kopa has raised $250 million in debt and equity. Over $200 million of debt financing was led by Standard Bank Group.
Fintech startup Zip has raised a $100 million Series C backed by Y Combinator, CRV and Tiger Global, bringing its valuation to $1.5 billion.
Aquiline Capital Partners has led a $95 million Series E for UK retirement savings platform Smart.
Ethernovia, a vehicle architecture startup, has raised a $64 million Series A from Porsche Automobile Holding, AMD Ventures and Qualcomm Ventures.
Belgium-based biotech company Dualyx has raised a €40 million Series A led by Fountain Healthcare Partners, Forbion and Andera Partners.
Plant-based deli meats startup Prime Roots has raised a $30 million Series B from True Ventures, Pangaea Ventures and Prosus Ventures.
E-con systems, a maker of camera sensors for robots and consumer electronics, has raised $13 million from GR 2022 Holdings.
Nigeria-based cold chain startup Figorr has raised $1.5 million in a seed round led by Atlantica Ventures.
Seattle-based Cascade Health, a healthcare platform startup, has raised a $1.7 million venture funding round led by AlleyCorp.
Indian AI startup Workhack has raised $1.5 million in a round co-led by Together Fund and Nexus Venture Partners. |
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Find the best VC opportunities with PitchBook's new exit prediction tool
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With venture-backed companies tripling in the last 10 years, finding the best investments has become increasingly complex. Now, you can source better deals in less time with our new VC Exit Predictor tool. Designed by the PitchBook Institutional Research Group, this PitchBook Platform feature allows users to see which venture-backed companies are most likely to exit, making it easier to identify potential investment targets.
The VC Exit Predictor uses AI and machine learning to synthesize our Platform data and research into metrics including exit probability, exit type (IPO or M&A) and expected return performance (Opportunity Score).
Discover PitchBook's VC Exit Predictor |
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Blackstone has agreed to sell its minority stake in IBS Software to Apax Partners for about $450 million. The founder and executive chair of IBS, an India-based travel and logistics SaaS provider, retains a majority stake.
Tipalti, which specializes in payments automation, has raised $150 million in incremental growth financing from JP Morgan and Hercules Capital.
Apollo Global Management has abandoned its plans to acquire UK-listed John Wood Group after filing five separate offers across many months.
TPG has upped its bid for Australia-listed funeral provider InvoCare from A$12.65 to A$13 a share, giving the company an equity value of A$1.9 billion (around $1.3 billion). |
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Pearl Energy Investments has closed its third fund on $705 million. The PE firm invests in lower-to-middle-market North American energy companies, with check sizes of $25 million to $150 million.
Atomic Labs has closed its fourth namesake fund on $320 million. The venture firm and incubator has also hired former Postmates CFO Kristin Schaefer as its first female general partner. |
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| PE firm Exponent has opened a base of operations in Dublin following regulatory approvals by the Central Bank of Ireland. |
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"Financial theory stipulates that public multiples should be higher than private multiples because public markets offer a liquidity and transparency premium to investors. ... But we have seen that real-world data sometimes diverges from theory. For instance, in Europe, EV/EBITDA multiples for PE buyouts have tracked higher than public multiples in the STOXX 600 benchmark. In fact, they have been on average 1.6x higher than public markets over the last 10 years."
Source: Exploring European Buyout Multiples |
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