PitchBook News - VC's age of Ozempic

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The Daily Pitch: VC

June 20, 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 dive into VC opportunities in the $100B weight-loss drug market

We examine how information security startups are adapting to an unstable world

Mega-deal fatigue is boosting the appeal of middle-market buyout funds

Analysts revisit their predictions for Europe's private markets

Today's Top Stories

Are we in the age of Ozempic?

Drugs used for weight loss, like Wegovy, Ozempic and Mounjaro, have exploded onto the digital health scene—and companies and investors are looking to cash in. But behind the glossy ads, the drugs come with potential side effects, patient risks and high price tags.

Is this VC's latest fad or a lasting transformation in healthcare? Our Q1 2023 Digital Health Report digs deep into this trend and others in a precarious time for an industry where exits have nearly come to a standstill.

read the preview

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Infosec innovation adapts to unstable world

Investors have many opportunities to make a move within the information security vertical, according to our 2023 overview on the space. Our analysts cover some of the most promising segments of the vertical, key deals and trends.

VC activity totaled $2.5 billion across 127 deals in Q1, continuing a flat trend from the last two quarters.

Analysts estimate infosec software will grow to a $190.3 billion market by 2026.

read the preview

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A message from Apex Group

79% of PE firms are using third-party providers—find out why

More and more fund managers are turning to trusted partners to fulfil their growth ambitions.

The key factors of any firm with portfolio diversification and global investment strategies are directly influenced by these core requirements right now and in the future:

Human resource needs
Complex regulations
Data security
Technology management
Investor scrutiny
Sustainable investment strategies

This eBook describes how outsourcing to a single-source partner will allow private equity firms to maximize growth and investor returns, reduce costs and risk, and effectively manage global regulations and data security.

To find out more about the benefits and savings that Apex Group's single-source solution can provide, download the Outsourcing eBook on the Apex Group website here.

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VC-backed IPOs lead rally of newly public companies

Companies that recently went public have posted strong gains in recent months, led by formerly VC-backed businesses, according to a suite of indexes created by PitchBook and Morningstar.

The VC-backed IPO index has risen 21.9% this year, while the PE-backed IPO index is up 18.7%. By comparison, the S&P 500 index has climbed nearly 14% in 2023.

Our DeSPAC index has been marked by volatility: The basket of companies that went public through blank-check mergers is up 4.7% this year after rising as much as 27.5% at the start of 2023.

explore the indexes

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Revisiting our predictions for European private markets

We made predictions about how this year's European private markets would look back in November 2022. To see how our forecasts have panned out, read our 2023 European Private Capital Outlook: H1 Follow-Up.

It's not just whether we were right or wrong. We explain why PE take-privates are unlikely to hit the predicted €30 billion total deal value at year-end, and our estimates about VC fundraising levels look to be accurate, to name just two of our assertions.

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Investors take fancy to middle-market buyout funds

(LeoMinor/Shutterstock)

Middle-market funds took up a larger share of overall PE capital raised in the first quarter, as difficulty in securing debt financing for outsized buyouts led to fewer closes from large-cap funds.

PitchBook data shows that buyout funds focused on the middle market accounted for around 88% of overall capital raised by US buyout firms in Q1—a significant increase from a year ago.

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Since yesterday, the PitchBook Platform added:

16

VC valuations

2237

People

640

Companies

18

Funds

See what our data software can do

The Daily Benchmark:
2018 Vintage Global VC Funds

Median IRR

29.44%

Top Quartile IRR

43.90%

0.03x

Median DPI

Select top performers

Inter-Atlantic Ivy

Snö True North

Communitas Capital Partners Fund I

*IRR: net of fees

78 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

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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VC Deals

Spanish online returns company Rever has raised €7.5 million (around $8.2 million) in a round including Mundi Venture and Y Combinator.

Anoat Therapeutics, a Paris-based provider of treatments for cystic fibrosis, has raised €2 million in a seed round led by AdBio Partners.

Brussels-based energy management software provider Enersee has raised €1.2 million (around $1.3 million) in a round led by Peak.

PE Deals

PE firms looking to acquire US sandwich chain Subway are considering a $3 billion securitization to finance the deal, Bloomberg reported.

Nordic Capital has agreed to acquire Swedish IT services company Foxway.

PAI Partners has invested in Hg-backed UK accountancy firm Azets Group, taking a co-controlling stake in the company alongside Hg.

Maven Capital has invested in UK e-learning provider iAM Compliant, which provides a cloud-based platform suited for the education market.

Fundraising

Former Softbank Group International CEO Marcelo Claure is tapping up his former SoftBank colleagues to raise $500 million for Latin America-focused VC fund, Bicycle Capital, Bloomberg reported.

Philippines-based Gentree is said to be raising up to $150 million for a Southeast Asia-focused VC fund, Dealstreet Asia reported.

Chart of the Day

"Real estate is underrepresented among PRI (Principles for Responsible Investment) signatory funds compared with non-signatory funds, potentially because real estate-focused asset managers are more likely to pursue membership with industry-specific groups or certifications. Given much of the discussion in the real estate space is oriented toward environmental sustainability, a more general principle-based commitment like PRI may be perceived as a less optimal fit, despite real estate assets experiencing social and governance risks of their own."

Source: Are "ESG Investors" Underperforming?

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European private market predictions middlemarket buyout funds information security startups The Daily Pitch

PitchBook News - VC's age of Ozempic

79% of PE firms are using third-party providers—find out why

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