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The Daily Pitch: VC

June 16, 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:

Analysts examine the new status quo for middle-market funds

Startups creating content are still king for investors in gaming

Which investors are betting most often on the future of generative AI?

Russian private investors are buying foreign assets at fire sale prices

Today's Top Stories

Content is still king in gaming

According to our latest analyst note, VCs in the video gaming space are still investing heavily into content startups, looking for studios to create the next big hit. Now, attention and cash are being diverted toward startups that aid developers with new tools. Content startups dominated deal count—though development companies led in deal value as many investors believe it’s the way to outsized returns.

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PE's mega-fund era is over as deal sizes shrink

Leveraged buyouts are shrinking, and the median take-private deal size has halved. Middle-market funds—vehicles that raise between $100 million and $5 billion—are outperforming their larger counterparts. And such funds are pulling in their biggest share of PE capital commitments in a decade.

These trends, which first emerged in late 2022, crystallized in Q1 2023, and they could hold on until the market's next major shift. Our latest US PE Middle Market Report, sponsored by Antares Capital and Cherry Bekaert, covers notable deals, exit activity, fundraising and more.

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A message from PitchBook

PitchBook's 2023 Media Kit released

With uncertainty across the private and public markets likely to continue, strong and insightful thought leadership is critical to your clients and prospects.

By partnering with PitchBook Media, you will have daily opportunities to reach 1.5M+ industry professionals in our newsletter, and you can broaden exposure of your brand through our core industry reports. We also help clients create custom research to share data-driven insights on the market.

Our 2023 Media Kit contains all the details to help your firm position itself in front of a VC or PE audience.

Click here to download it today or to speak to someone on the media team.

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The most active investors in generative AI

(Chole Ladwig/PitchBook News)

Investors poured $4.5 billion into generative AI startups in 2022 across 269 deals as VCs picked winners alongside the big tech players.

Our list of the most active investors in the generative AI vertical shows who's betting on the future of AI.

Recommended Reads

AI startups have tons of cash, but not enough data. [The Wall Street Journal]

BlackRock's ambition is to become inseparable from asset management—as a service provider for competitors. [Institutional Investor]

As ties to China turn toxic, even Chinese companies are moving headquarters and factories and cleaving off their Chinese businesses. [The New York Times]

Since yesterday, the PitchBook Platform added:

17

VC valuations

1975

People

608

Companies

18

Funds

See what our data software can do

The Daily Benchmark:
2015 Vintage Global Real Estate Funds

Median IRR

11.44%

Top Quartile IRR

15.35%

0.94x

Median DPI

Select top performers

GreenOak Asia II

Oak Street Real Estate Capital Fund III

Abacus Multi-Family Partners III

*IRR: net of fees

84 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

People

The former head of FTX Ventures of the now-defunct crypto exchange FTX, Amy Wu, is joining Menlo Ventures as a general partner, according to reports.

VC Deals

Fernride, a German developer of autonomous electric trucks, has raised a $31 million Series A with backing from 10x Founders, Promus Ventures and Fly Ventures.

AI risk intelligence startup Blackbird.AI has raised a $20 million Series C led by Ten Eleven Ventures.

Elastio, a cloud data recovery startup, has raised an $18 million Series A led by Venture Guides.

Cybersecurity startup Trust Lab has raised a $15 million Series A led by Thomas Tull's US Innovative Technology Fund and Foundation Capital.

Sicona Battery Technologies, an Australia-based startup, has raised a $15 million Series A led by Himadri Speciality Chemical and Waratah Capital.

Nelly, a Berlin-based startup digitizing medical admin and payments, has raised a €15 million Series A led by Lakestar.

Soundtrack Your Brand, a Stockholm-based music streaming platform for businesses, has secured $15 million in a round led by Music.

Spanish crypto exchange Bit2Me has closed a €14 million investment led by Investcorp.

DeepChecks, a machine learning validation startup, has raised a $14 million seed round led by Alpha Wave Ventures.

Eurazeo and Griffin Gaming Partners have led a $6.5 million Series A in French mobile gaming studio Million Victories.

PitchBook webinar: Exploring the global private equity landscape

This webinar will explore the global PE dealmaking environment, including fundraising and exit opportunities. PitchBook analysts from around the globe will share their insight into where the PE landscape stands today in the US and Europe and what we can expect in the coming quarters. Key topics include:

The macroeconomic risks shaping the global PE landscape.

The US and European dealmaking environments.

The dearth of exit opportunities via both acquisitions and public listings.

A more challenging backdrop for fundraising and fund performance.

Register now to secure your spot.

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PE Deals

Bain Capital has made an offer to buy Switzerland-based SoftwareOne, valuing the company at $3.2 billion.

ArcLight Capital Partners has acquired an additional 12.5% stake in Natural Gas Pipeline Company of America from Brookfield Infrastructure Partners, bringing ArcLight's stake up to 37.5%. Operator Kinder Morgan retains 37.5%, while Brookfield is left with a 25% stake.

FPE Capital-backed UK cybersecurity company Intragen has completed its acquisition of the Finnish identity and access management division of Swedish telecoms company Telia.

Anacap-backed French payments solutions company Market Pay has agreed to acquire Polish fintech Novelpay and its French subsidiary.

Exit & IPOs

Helios Investment Partners-backed CAB Payments has confirmed plans to hold a London IPO next month.

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Fundraising

TA Associates has closed its latest global PE fund, TA XV, on $16.5 billion, exceeding its initial target.

Greywolf Capital Management has closed its latest fund, Greywolf Containership Opportunities Fund II, on $120 million. The firm plans to use the fund to invest in commercial ships that can be leased to international shipping companies.

Munich Private Equity Partners is targeting €300 million for its latest fund-of-funds.

New York-based Recharge Capital has closed a $200 million fund dedicated to women's healthcare, with backing from Peter Thiel and the Olayan Group.

Corporate M&A

Publicly traded oil field services companies Patterson-UTI and NexTier Oilfield Solutions have agreed to merge in an all-stock deal, creating a company with an enterprise value of $5.4 billion.

Chart of the Day

Source: Q1 2023 Global Private Market Fundraising Report

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PitchBook News - Content is still king in gaming

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