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The Daily Pitch: VC

June 23, 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:

As a potential recession looms, PE buyout deals are slowing down

PE firm Stone-Goff Partners has closed its largest vehicle as mid-market buyout funds shine

We have a new home for data and tools to help you understand the state of private markets

The lithium industry is projected to grow as electric vehicle sales increase

Today's Top Stories

The accelerator most likely to propel a startup to unicorn status

Y Combinator, the Bay Area accelerator behind Airbnb, Stripe and DoorDash, has yielded more unicorns than Techstars, SOSV, MassChallenge, Plug and Play Tech Center or 500 Global, with an estimated unicorn creation rate of 4.5% since 2010.

That's just one of many exclusive findings from our recent PitchBook analysis, which offers a comprehensive look inside the industry's preeminent accelerator programs. See how the top names stack up and hear from founders surveyed by PitchBook who went through each program on whether the experience was worthwhile.

read it now

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No easy road for PE as recession risk rises

It's looking increasingly likely that the US economy could enter a recession in the next 18 months, according to PitchBook's quantitative model. Meanwhile, PE buyout deals are starting to slow, and exits are declining to extents rarely seen in the past two decades.

As things stand, portfolio companies are using more cash flow than usual for interest payments, thus squeezing returns. But a full economic slowdown dragging down interest rates would create thornier problems for PE investors. 

Using data visuals, our latest Quantitative Perspectives report tells the story of the macroeconomic factors and debt complications leading PE to pump the brakes.

read the report

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A message from Allvue Systems

Take care of key investor reports automatically

Without the right engine powering a PE firm's end-to-end operations, managing investor communications and reporting, such as capital calls and PCAP statements, can feel impossible to complete without errors.

From beginning to end, the capital call process—like other reporting processes—requires clear and easy access to investor data and the ability to carry those figures through as notices are generated and sent out, and as capital is received. Without the right workflow in place, GPs will encounter chaos, and likely during a high-pressure time when they're working against the clock to secure the capital to close an important deal.

Check out Allvue's primer on simplifying the capital call process and download an investor-ready template of a capital call statement.

Download the template

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Track private markets with these tools

We have a new home for data and tools to help you understand the state of private markets.

Market indicators and indexes that approximate the investor-friendliness of VC deals and PE performance, as well as track the performance of unicorns and PE- and VC-backed IPOs.

Dashboards that cover female founders, unicorn companies, SoftBank's Vision Fund and public PE firms.

Leaderboards that rank the most active lenders and investors, as well as rankings of universities by startup founder alumni.

explore data & tools

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Boutique firm closes its largest vehicle as LPs turn to mid-market buyout funds

(Hoowy/Shutterstock)

Stone-Goff Partners, a middle-market PE investor, has closed its largest buyout fund. The $175 million vehicle is also the firm's first backed by institutional investors.

The firm plans to make up to nine platform acquisitions from the fund, which is dedicated to acquiring founder-owned companies in the business services sector. Middle-market-focused buyout strategies appear to be gaining traction among LPs as the broader PE industry weathers a tough fundraising environment.

Recommended Reads

The world's most livable cities in 2023. [The Economist]

From fast-growing trees to volcanic dust, startups are getting creative in their efforts to fight global warming. [The Wall Street Journal]

The trillion-gallon question: What happens if California's dams fail? [The New York Times]

Since yesterday, the PitchBook Platform added:

19

VC valuations

2088

People

580

Companies

24

Funds

See what our data software can do

The Daily Benchmark:
2014 Vintage Global VC Funds with more than $250M

Median IRR

22.96%

Top Quartile IRR

26.81%

1.14x

Median DPI

Select top performers

DCM VII

True Ventures IV

Spark Capital Growth Fund

*IRR: net of fees

24 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

VC Deals

Business productivity and maintenance software company Limble has raised a $58 million Series B led by Goldman Sachs at a $450 million valuation.

Omeat, a cultivated meat startup, has emerged from stealth and announced that it closed a $40 million Series A in 2022 from investors including S2G Ventures, GV and Tyson Ventures.

Healthcare imaging company NVision has raised a $30 million Series A led by Playground Global.

Captions, a video editing software startup, has raised a $25 million Series B led by Kleiner Perkins.

Data management specialist Acryl Data has raised a $21 million Series A led by 8VC.

Former co-CEO of Salesforce Bret Taylor and Clay Bavor, an ex-Google executive, have secured at least $20 million led by Benchmark and including Sequoia for a new AI startup valued at over $100 million, The Information reported.

Spacecraft manufacturer Apex has raised a $16 million Series A led by Andreessen Horowitz and Shield Capital.

Supercritical has raised a $13 million Series A led by Lightspeed for its carbon removal marketplace.

PE Deals

Phalanx Impact Partners, Das & Co. and Vikram Solar have formed a joint venture, VSK Energy, and plan to invest up to $1.5 billion in the vertically integrated solar panel manufacturing company.

Bahrain sovereign wealth fund Mumtalakat has agreed to buy £400 million worth of shares in McLaren from the Saudi Arabia's Public Investment Fund and Ares Management, Sky News reported.

A consortium including Fortress Investment Group has bid $350 million to acquire Vice Media from bankruptcy and is close to approval on the deal, The New York Times reported.

RedBird Capital Partners and other potential investors have been in talks to acquire a minority stake in the UK operations of carmaker Renault's Formula 1 team Alpine, Bloomberg reported.

OMERS has been in talks to buy a stake in Maple Leaf Sports & Entertainment from the sports company's chair, which would grant MLSE an enterprise value of $8 billion, Sportico reported.

Exit & IPOs

Robinhood has agreed to acquire no-feed credit card startup X1 for $95 million. X1 closed a $40 million Series B in 2022 led by Alarco Ventures, FPV Ventures and Soma Capital.

Fundraising

Indian VC firm Lumikai has launched a $50 million fund to invest in gaming and interactive media companies.

Chart of the Day

"The largest fund raised in Q1 2023 was the Rakiza Fund, based out of Oman, which closed on $1 billion; the smallest fund came in at $60 million for the Cardiff Capital Region Innovation Investment Capital Fund, raised out of the United Kingdom. No funds raised this quarter were domiciled in North America."

Source: PitchBook's Q1 2023 Global Real Assets Report

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PitchBook News - Putting accelerators to the test

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