Enterprise SaaS yields to market slowdown

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The Daily Pitch: VC

May 22, 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:

Our inaugural report on enterprise SaaS covers the trends, segments, top deals and investors in the space.

Tiger Global is shopping a bundle of assets on the secondary market in hopes of generating liquidity for its LPs.

Private debt funds yielded positive returns in H2 2022, showing resilience in a volatile market.

Today's Top Stories

Enterprise SaaS shows signs of further slowdown in Q1

2022 was the second-biggest year for funding in the enterprise SaaS sector—but signs of a slowdown continue in 2023, in line with broader market trends. The vertical, which focuses on software services for businesses, is the latest area of new coverage by our analysts. Our launch report covers the trends, segments, top deals and investors in the space. Key takeaways include:

Total deal value in Q1 rose 18.5% from the previous quarter, to nearly $14 billion, largely due to Stripe's $6.5 billion raise. Without Stripe, deal value was down 37%. Total deal count decreased 8.6%, to 363 deals.

Stripe, CloudKitchens and Anduril topped the list of VC-backed companies that have raised the most capital; investors like Alumni Ventures, Tiger Global and Andreessen Horowitz were some of the most active in the sector.

Enterprise resource planning, customer relationship management and business analytics were among the most active segments.

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Exclusive: Evercore advises Tiger Global on GP-led secondaries strip sale

(John Lamparski/Getty Images)

Tiger Global, a prolific investor in VC-backed companies during the pandemic-era boom, has hired Evercore to help it shop a curated portfolio of assets on the secondary market. The sale process, which kicked off months ago, is structured as a GP-led strip sale, according to sources.

The crossover investor hopes an eventual sale will provide liquidity to its LPs. So far, it's been testing the waters to see how much secondary buyers might be willing to pay, but the large bid-ask spread has likely made the deal unattractive to both sides.

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People

Jeff Jordan, who joined Andreessen Horowitz in 2011 as a general partner, is stepping back from new investments at the firm, but will continue working with existing portfolio companies and maintain his board seats. Jordan led a16z's investments in Airbnb and Instacart, among others.

Leigh Marie Braswell, a principal at Founders Fund, is leaving the firm after two and a half years. Braswell, who joined from Scale AI, was involved in deals for companies including Neon and Paxos.

VC Deals

Restaurant365, which offers restaurant enterprise management software, has secured a $135 million investment co-led by KKR and L Catterton, with participation from Bessemer Venture Partners and Iconiq Growth.

Fivetran, a data movement startup, has secured $125 million in new financing from Vista Credit Partners.

BuildOps, which offers a project management platform for commercial contractors, has raised $50 million led by Fika Ventures and 01 Advisors.

Adarga, a London-based startup offering AI software for security risk intelligence, has raised $20 million in a round led by BOKA Group.

Odyssey, which offers a platform for renewable energy companies, has raised a $15 million Series A led by Union Square Ventures.

Parker89 has led a £7.5 million Series A for Orbital Witness. The startup uses generative AI to improve the due diligence process for buying properties.

Project management specialist Deployed has closed a $4 million seed round led by Amrock Ventures and M12.

Berlin's Nia Health, a provider of digital therapeutics for chronic skin conditions, has secured €3.5 million in a round led by High-Tech Gründerfonds.

PE Deals

KKR-backed Vietnamese education company EQuest has raised $120 million in equity from KKR and debt, DealStreetAsia reported.

Exit & IPOs

Sentinel Capital Partners has sold Wisconsin-based electrical instrument manufacturer ECM Industries to nVent Electric for $1.1 billion. Sentinel and NXT Capital had acquired ECM in a 2019 buyout.

Fundraising

Insight Partners has closed its Continuation Fund II to invest in software startups with over $1.2 billion in total commitments.

Bregal Milestone has held a €770 million final close on its second fund targeting European tech companies.

India's Aurum Equity Partners has launched a $250 million PE fund targeting global tech infrastructure such as data centers.

TDK Ventures, the corporate venture capital arm of Japanese technological components company TDK, has launched a $150 million EX1 fund to invest in climate tech startups.

Investors

AIP Capital, a new division of 777 Partners, has plans to invest up to $200 million before the end of 2024 in companies that supply the aerospace industry, Reuters reported.

Corporate M&A

Russian billionaires Vladimir Potanin and Vagit Alekperov have put in separate bids for a 51% stake in the domestic assets of Russian technology giant Yandex, valuing the company at over $7 billion, Bloomberg reported.

Chart of the Day

Source: Q1 2023 PitchBook-NVCA Venture Monitor

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