PitchBook News - Seeking supply chain stability

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The Daily Pitch: VC

May 19, 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:

Discover the supply chain tech sector trends of Q1 in our latest Emerging Tech Research.

VC investors are stepping back from indoor farms, whose costs have risen sharply.

Four femtech investors share which startups they expect to be game changers in women's health.

Today's Top Stories

VC investors make careful supply chain tech bets in downturn

VC investment in the supply chain tech sector continued to drop in Q1. The latter half of the quarter reflected more of the slowdown, possibly in response to the crisis surrounding Silicon Valley Bank. In our latest Emerging Tech Research, the freight tech and inventory tracking industries get the spotlight, along with three companies: Verity, Plus One Robotics and Outrider.

The total value of deals for supply chain tech companies fell 45.3% from Q4 2022, while the number of deals was down 19.4%.

Enterprise supply chain management was the industry most able to hold fast.

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VC investment in indoor farms plummets 91% in 1 year

(Courtesy of Infarm)

Venture dollars for indoor farms are in a free fall as investors cool on startups whose costs have risen sharply alongside energy prices and interest rates.

Indoor farms raised $75.8 million in VC funding across 14 deals globally, down 91% year-over-year in terms of deal value. Five indoor farms went bankrupt or ceased operations in Q1, and several more have announced major layoffs in recent quarters.

Those that have stayed afloat are surviving by "stretching out their cash," says Mark Lynch, of Oghma Partners.

VC-backed life sciences companies experience a slow start to 2023

VC deal activity for life sciences companies hit a five-year quarterly low in Q1 2023, signaling an end to the surge of funding that started with the pandemic in 2020 and began to slow due to macroeconomic challenges in 2022. Earlier-stage deals took up a greater share of deal activity at the start of the year as later-stage companies contended with narrower exit opportunities and declining check sizes. Orrick's Life Sciences Snapshot provides further analysis of the US market, as well as a roundtable discussion of the trending supplements market.

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People

Equity Group Investments founder and chair Sam Zell has died due to complications from illness. Zell, a prolific real estate and corporate investor, was widely known for building residential and commercial real estate investment trusts in the 1990s.

VC Deals

Goodwater Capital has led a $50 million Series C for Hallow, the developer of a prayer and meditation app.

PartsTech, a B2B marketplace for auto parts, has raised a $35 million Series C led by OpenView.

Energy management specialist Peak Power has secured a $35 million investment led by Greenbacker Capital Management.

Barcelona-based climate-tech startup Mitiga Solutions has raised a €13.25 million Series A led by Kibo Ventures.

Faks has raised €5 million from Connect Ventures, Cocoa Ventures and Seedcamp. The French startup's app connects pharmacies and suppliers.

Belgium's VoxelSensors, a developer of 3D perception tech, has secured a €5 million seed investment led by Capricorn Partners and Qbic.

Praetura Ventures has led a $5 million Series A for UK-based adtech company Covatic.

Amini, a Kenyan environmental data aggregation and analytics platform, has raised $2 million in a round led by Pale Blue Dot.

PE Deals

Francisco Partners and TPG have been working together on a bid north of $5 billion for software company New Relic, The Wall Street Journal reported. The publicly traded company provides observability software to application and website owners.

Ambienta has acquired Spaggiari Parma, an Italian company that provides software for schools. The firm completed the deal through its Ambienta Fund III.

Exit & IPOs

Ardian-backed French software company Planisware is considering an IPO, Reuters reported.

Fundraising

Insight Partners has closed its Continuation Fund II on about $1.3 billion committed by LPs including HarbourVest Partners and Lexington Partners.

RMBV, a firm led by former executives of scandal-hit Abraaj, is looking to raise up to $400 million for its North Africa-focused fund, Private Equity International reported. The firm is said to be eyeing a first close by the end of the year.

Morgan Stanley Investment Management has held a $500 million first close on its private equity climate fund.

Michigan-based Plymouth Growth has closed its fifth fund on roughly $125 million. The fund, Plymouth Growth V, focuses on B2B software and tech-enabled services companies in the mid-continent region of North America.

Investors

Pension plan Calpers has an "appetite" to further increase its allocation to private equity, the Financial Times reported. The LP's target allocation for PE was raised from 8% to 13% in late 2022.

Corporate M&A

Shopping center owner, operator and developer Regency Centers has agreed to acquire another real estate investment trust, Urstadt Biddle Properties, in an all-stock deal that values the latter around $1.4 billion.

Chinese manufacturer Geely has invested £234 million in Aston Martin, doubling the company's stake in the British carmaker and making Geely the third-largest shareholder.

Chart of the Day

"Different types of nontraditional investors will be experiencing different challenges in the current climate. For example, a VC arm of an IT company conducting layoffs and focusing on capital efficiency may struggle to justify a hefty capital outlay on a new business. Whereas, a sovereign wealth fund benefitting from recent spikes in oil prices may have revived appetite to deploy cash and diversify into sectors such as IT amid lower valuations."

Source: PitchBook's Q1 2023 European Venture Report

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PitchBook News - Seeking supply chain stability

VC-backed life sciences companies experience a slow start to 2023

Older messages

Ranking Q1's most active investors

The banks scooping up ex-SVB talent

Europe's rise and fall in VC valuations

Will VCs leave behind women's health?

Window shopping for startups

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