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The Daily Pitch: VC

June 30, 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:

Generative AI hype didn't save dealmaking for AI and machine learning in Q1

Has fundraising actually become more difficult, or does it just feel that way?

US regulators may soon require PE firms to disclose fund LPs, a serious change for the industry

Could lab-grown meat take off now that the USDA has approved sales by two companies?

Today's Top Stories

Investors learn generative AI's language

Despite a rush of excitement from generative AI, deal count and value continued to decline in Q1 within the AI & machine learning vertical, when excluding Microsoft's $10 billion investment in OpenAI. Spanning from training for large language models for generative AI, to chips that will power the next wave of computing, our latest Emerging Tech Research shows the range of opportunities for investors.

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It's chilly out there, but private market fundraising hasn't frozen over

There's been a melancholy mood around private market fundraising lately. In the first half of 2022, mega-funds attracted mountains of capital, depleting LP commitment budgets before a fall in the public markets triggered the denominator effect for some institutional investors. Ever since, GPs raising private market funds have lamented an apparent slowdown in commitments.

Our latest analyst note puts aside anecdotes to answer that recurring question through data-driven quantitative lenses. We found that even though GPs are raising billions of dollars across thousands of funds, they're having a harder time than usual.

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A Message From Allvue Systems

The tools you need to streamline LP reporting

When back-office teams spend hours manually reporting to potentially hundreds of investors, each with different shares and some with custom LPA conditions, GPs are bound to encounter errors and risk providing investors with an incorrect look at their shares' standing and performance. The investor experience is more important than ever, and reporting hiccups won't be easy for LPs to forget.

Allvue is determined to optimize the quarter-end reporting process, and Allvue's Fund Accounting solution makes it simple. For an example of how Allvue enables automatic generation of key LP communications, start by downloading a PCAP statement template here.

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US approval of lab-grown meat to unleash 'stifled' sector

(Courtesy of Upside Foods)

For years, startups developing lab-grown meat technology have dealt with a constant roadblock: It wasn't approved for sale in US grocery stores—or any major market outside of Singapore.

That rule was finally changed last week with two startups receiving US regulatory approval, and it could be what the industry needs during a dealmaking drought. Here's a look at the state of cultivated meat dealmaking and the investors and companies leading the charge.

Recommended Reads

One writer's thoughts on how PIF may be the world's most flirtatious sovereign wealth fund. [The Economist]

Coatue prepares tech founders for the road ahead. [The Information]

People are hiring phone bots to torture telemarketers. [The Wall Street Journal]

Since yesterday, the PitchBook Platform added:

17

VC valuations

2044

People

726

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39

Funds

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The Daily Benchmark:
2014 Vintage Global Debt Funds

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Top Quartile IRR

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GoldenTree Distressed Fund II

Strategic Value Special Situations Fund III

GS Mezzanine Partners VI

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VC Deals

Generative AI startup Inflection AI has secured a $1.3 billion investment led by investors including Microsoft, Nvidia, and Reid Hoffman.

Typeface, a generative AI platform for enterprise content creation, has raised $100 million at a $1 billion valuation. The Series B was led by Salesforce Ventures.

Cyware has raised a $30 million Series C led by Ten Eleven Ventures for its an AI-powered cybersecurity platform.

Material Evolution, a UK company that makes low-carbon cement from industrial waste, has closed a £15 million Series A led by Kompas VC.

Quandri a Canadian insurtech automation company, has raised an $8.5 million Series A led by Fuse, TechCrunch reported.

Madrid-based insurtech startup Bdeo has secured €7.5 million from investors including Armilar, Íope Ventures and K Fund.

Settly, an Amsterdam-based digital relocation platform, has raised a €6 million seed investment led by 2050 and Mediahuis Ventures.

Bitkraft Ventures has led a $5.7 million seed investment in London-based Scriptic. The startup uses generative AI to develop phone-first interactive shows.

Kidovo, which offers a learning platform for kids, has raised a $1.2 million seed round from investors including Venture Highway, Amplify PCC, and Good Capital.

PE Deals

General Atlantic has invested an additional $500 million in Authentic Brands Group, bringing its total commitment to just under $2 billion. CVC Capital Partners, Brookfield, HPS Investment Partners, Leonard Green & Partners and BlackRock are among Authentic's other backers.

Author Health has received a $115 million investment led by General Atlantic, with Flare Capital Partners also participating in the round. The newly launched platform will treat Medicare Advantage recipients with mental illness or substance use disorders.

Inflexion has completed its investment in TC Group, a UK-based accountancy and tax services company serving small and medium enterprises. The investment came via its Enterprise Fund V.

Astorg-backed European investor services company IQ-EQ is to acquire Asian consulting companies ComplianceAsia and Lymon.

Thompson Street Capital Partners-backed US telecom services provider BCM One has acquired London-headquartered business voice services company Pure IP.

MidEuropa has sold Polish payroll software solutions provider Symfonia to Accel-KKR.

Exit & IPOs

Visa has agreed to acquire Pismo, a Brazil-based fintech startup, for $1 billion in cash. Redpoint eventures, SoftBank and Accel are among Pismo's previous backers.

Fundraising

Prolific accelerator Techstars is raising $150 million for a new accelerator fund, according to SEC filings found by TechCrunch.

Fuel Ventures has launched a £100 million fund to back early-stage tech startups in the UK.

Life sciences investor Vesalius Biocapital has raised over €95 million in the first close of its fourth fund targeting drug development and digital health startups.

Investors

The Alberta government has severed a partnership with the Can-China Global Resource Fund, a Hong Kong-based PE firm devoted to investment in North America, Reuters reported.

Chart of the Day

Source: 2023 European Private Capital Outlook: H1 Follow-Up

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PitchBook News - VCs put AI breakthroughs before basics

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