Public fintechs strive for profitability

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The Daily Pitch: VC

July 7, 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:

Newly public fintech companies ride a stock rebound

PitchBook analysts revisit their US PE predictions from the beginning of 2023

Outlooks for public agtech companies diverge

Emerging managers' struggles put pressure on already cash-hungry startups

Today's Top Stories

Fintech stock rebound favors profitable business models

Share prices for recently public fintech companies have been rebounding faster than the wider market. Still, investors are prioritizing profitability, as traditional IPOs have outperformed SPACs. Neobanks, insurtech, proptech and high-growth payments companies are all working to turn a profit, whereas well-funded incumbents are pursuing M&A. A reset almost always favors the strong.

Our Q2 2023 Fintech & Payments Public Comp Sheet and Valuation Guide tracks stock performance, valuations and market caps—as well as forecasts for revenue, EBITDA and earnings per share—for key publicly traded companies. This quarter's guide also includes data from PitchBook's VC Exit Predictor, a tool that forecasts which private companies are most likely to go public or be acquired.

see the data

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Emerging managers' fundraising slump is a blow to smaller VC ecosystems

(Mara Potter/PitchBook News)

Emerging managers in the US are on track to see their annual fundraising slump below $20 billion for the first time in seven years, as economic volatility pushes LPs to stick with more established managers.

For the startup ecosystem, emerging managers' challenges mean less cash available outside of major metropolitan areas and fewer niche investors on the hunt for innovative companies.

Recommended Reads

One author considers whether we can really mine our way to a greener future. [The New Yorker]

How AI could change how blind people see the world. [Wired]

The more complex the fund name, the worse it does, according to a professor who ran the numbers—but the reason isn't clear. [The Wall Street Journal]

Since yesterday, the PitchBook Platform added:

9

VC valuations

2119

People

659

Companies

61

Funds

See what our data software can do

The Daily Benchmark:
2020 Vintage Global PE Funds with more than $1B

Median IRR

20.10%

Top Quartile IRR

35.08%

0.02x

Median DPI

Select top performers

ICON Software Partners

Centerbridge Capital Partners IV

New Mountain Partners VI

*IRR: net of fees

83 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

People

Paul Zuber, former head of Thoma Bravo's technology group, has joined Hg as operating partner, North American lead.

VC Deals

Clair, has raised $175 million: $150 million from Pathward bank and $25 million in equity funding led by Thrive Capital. The fintech startup offers on-demand wage advances.

Japanese robotics startup Telexistence has raised a $170 million Series B from investors including SoftBank, Monoful Venture Partners and Airbus Ventures.

Brussels-based insurtech startup Qover has closed a $30 million Series C from investors including Alven, Anthemis and Kreos Capital.

Hardt Hyperloop, a Dutch developer of hyperloop technology, has secured €12 million from investors including the European Innovation Council Fund and InnovationQuarter.

Internet-of-things startup Nami has raised a $10.5 million Series A from investors including Verizon Ventures, Amavi Capital and INSPiRE.

Numarics, a Swiss automated accounting specialist, has secured €10.2 million in a round led by UBS Next and FiveT Fintech.

London-based clinical research company uMed has received £9.8 million from investors including Delin Ventures, AlbionVC and Playfair Capital.

Twitter rival Bluesky has raised an $8 million seed round led by Neo.

Optiversal, a generative AI content provider for large companies, has raised a $4.2 million seed round led by Bling Capital.

ChipFlow, a UK-based developer of an open-source semiconductor chip design platform, has raised £1.2 million in a round led by Fontinalis Partners.

London-based Renewabl, a climate-tech software startup, has secured £1.1 million from investors including South Pole, QVentures and PortfoLion.

Don't miss our upcoming webinar

With soaring interest rates and investors weighing the possibility of a recession, the credit markets have slowed precipitously in 2023. In our upcoming webinar, LCD experts will examine recent trends, along with what lies ahead. Key topics include:

Loan issuance is down across the board, prompting investors such as CLOs to scramble for assets.

Leveraged loan defaults are emerging at a pace not seen since the COVID-19 pandemic onset, due to rising rates.

Signs of stress have emerged as the private credit sector—which still commands a large slice of the lending market—has not proven immune to challenging economic conditions.

Register now to secure your spot.

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PE Deals

PAI Partners has agreed to acquire a majority stake in European network infrastructure services provider Infra Group, joining current investors ICG and Andera Partners.

SHS Capital has agreed to acquire a majority stake in Dutch pharmaceutical company Cam Bioceramics. ING Corporate Investments also took part in the deal alongside other co-investors.

WM Partners has acquired Allergy Research Group, a hypoallergenic supplement retailer founded in 1979, from Kikkoman subsidiary KI Nutricare.

Shore Capital Partners has invested in newly formed Empower Aesthetics, an Austin-based medical aesthetics platform.

Exit & IPOs

Audax Group has agreed to sell CorEvitas, a provider of patient health outcomes data for pharmaceutical and biotechnology companies, to Thermo Fisher Scientific for $912.5 million in cash.

Helios Investment Partners-backed CAB Payments raised up to £335 million in its London IPO, valuing the fintech company at around £851 million, according to reports.

Fundraising

London-based early-stage VC firm Notion Capital has closed its fifth fund on €300 million.

Insight Partners has raised $118 million for Insight Vision Capital II, the software investor's fund-of-funds that will invest in early-stage funds with managers from underrepresented groups.

Investors

London-listed asset manager Man Group has agreed to buy US middle-market private credit manager Varagon Capital Partners.

Chart of the Day

Source: 2023 Sustainable Investment Survey

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