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The Daily Pitch: VC

July 14, 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:

PitchBook Benchmarks offers the latest fund performance data across PE, VC, and more

Private market asset managers are grabbing talent to reach private fundraising channels

VC's earliest stages have seen the sharpest drops in lending

Add-ons have helped Antares Capital keep the deals flowing

Which sectors are proving resilient amid Europe's VC downturn?

Today's Top Stories

PitchBook Benchmarks for PE, VC, and more

Now more than ever, allocators need clear-cut data to help guide their decision-making. But in the opaque world of private capital, finding transparent fund performance figures can be a challenge.

Enter PitchBook Benchmarks, which offer the latest data for closed-end fund returns across strategies and vintage years. The new edition is now available, updated through Q4 2022 with preliminary data for Q1 2023. It features downloadable XLS tables, data visualizations and PDFs that break down the numbers by strategy and geography.

see the data

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Venture debt deals decline 38%, led by SVB's core market

(Joey Schaffer/PitchBook News)

A slowdown is taking hold across the venture debt landscape, as lenders impose higher underwriting standards and startups with uncertain financial prospects fail to qualify for new loans. Loans to early-stage companies are taking the hardest hit, due in part to the failure of Silicon Valley Bank, which catered to this niche market.

Venture debt lenders are taking advantage of the opportunity to make less-risky loans to top-tier companies—all while charging higher interest rates.

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A message from Silicon Valley Bank

We're still your team. You're still our priority.

When you bank with us, you get 30 years of fund banking experience and the largest dedicated team in the market.

Learn more

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Asset managers tap top talent to reach private wealth channel

(ADragan/Shutterstock)

Private market asset managers and service providers are pushing into private wealth's fundraising channels through strategic talent initiatives.

The most active recruiters of private wealth capital-raising talent last year were Apollo, Blackstone, Ares, KKR and EQT, according to data from Jensen Partners, an executive search firm. The data also showed a 115% year-over-year increase in the hiring of capital-raising private wealth sector professionals at alternative asset managers from 2021 to 2022.

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Add-ons help fuel Antares' pipeline for loan deals

(Pavel Kubarkov/Shutterstock)

Giant credit manager Antares Capital keeps its deal pipeline packed by funding add-ons and chipping away market share from the broadly syndicated loan market.

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Energy, healthcare prove resilient amid Europe's VC downturn

(fokke baarssen/Shutterstock)

The number of European venture rounds fell across all sectors in the first half of the year, but some, including energy and healthcare, have fared better than others.

Less recession-proof sectors like B2C have racked up significant declines in deal count.

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Recommended Reads

VC's latest foe in the race for AI startup deals is buyout offers from corporations. [The Information]

VCs are showing greater interest in neurological diseases as successes emerge in a field that has long thwarted drugmakers. [The Wall Street Journal]

As the maker of the most popular variety of Sriracha continues to face production issues, other hot sauce makers seize the moment. [The New York Times]

Since yesterday, the PitchBook Platform added:

19

VC valuations

2121

People

649

Companies

25

Funds

See what our data software can do

The Daily Benchmark:
2013 Vintage Global VC Funds with more than $250M

Median IRR

22.00%

Top Quartile IRR

27.95%

1.26x

Median DPI

Select top performers

OrbiMed Private Investments V

Frazier Healthcare VII

Scale Venture Partners IV

*IRR: net of fees

13 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

People

Tim Franks, KKR's head of private equity in the UK and Ireland, has left the firm, Bloomberg reported. Franks joined KKR from Advent International in 2017.

VC Deals

Direct air carbon capture startup Avnos has secured $80 million in the form of funding and partnerships with ConocoPhillips, JetBlue Ventures and Shell Ventures.

The UK's Tenpoint Therapeutics, a developer of cell-based therapeutics that aim to reverse vision loss, has received a $70 million Series A from investors including British Patient Capital, Eight Roads and Sofinnova Partners.

Causaly has secured a $60 million Series B led by Iconiq Growth. The London-based company uses generative AI to manage data in biomedical research.

Secure Code Warrior has raised a $50 million Series C led by Paladin Capital for its software security learning platform for developers.

Radar, which uses RFID and computer vision to track in-store inventory, has raised a $30 million Series A led by Align Ventures.

Simbe Robotics, a maker of AI robotics for retailers, has landed a $28 million Series B led by Eclipse.

CarePredict, which makes preventative care wearables and software for older adults, has secured $29 million co-led by SV Health Investors and Aspire Healthtech Partners.

MerQube, a provider of indexing and rules-based investing technology, has raised a $22 million Series B led by Intel Capital.

Open-source generative AI startup Nomic has raised a $17 million Series A led by Coatue.

Amsterdam-based NFT ticketing startup Get Protocol has secured $4.5 million in a round led by Flow Ventures.

PE Deals

CapVest Partners has agreed to acquire Kerridge Commercial Systems, a UK-based enterprise resource planning software company, from Accel-KKR. The deal values Kerridge at around €800 million, Bloomberg reported.

Wellington Management has been in talks to lead a new round of funding for Skims, the Kim Kardashian-owned clothing retailer, which could be the company's last before filing for an IPO, Reuters reported.

TPG's Integrated Media Company has agreed to acquire Montreal-based software provider Toon Boom Animation from Nelvana, a subsidiary of Corus Entertainment, for C$147.5 million (about $112.5 million).

Exponent has agreed to back Dutch software testing specialist TestingCo.

London-listed Caledonia Investments is looking to shed its wealth management division 7IM through a sales process largely targeting PE investors, Reuters reported.

Falx Capital and other investors have agreed to acquire Integrity Data Solutions, which provides supply chain and automated data collection tools.

Portfolio Companies

Ripple Labs won a partial but significant victory in a case brought by the SEC that alleged the company had violated securities law in the sale of its crypto token, XRP. The price of XRP rose more than 70% following the decision.

Exit & IPOs

The Carlyle Group and Trustar Capital are looking to raise $4 billion via a partial exit from their stakes in McDonald's China, Bloomberg reported.

Advent-backed UK defense company Cobham has sold its aerospace communication systems division to French manufacturing firm Thales.

Fundraising

Industry Ventures has raised $1.4 billion for its 10th VC secondaries fund, according to a regulatory filling. The firm's prior secondaries fund closed in 2021 with $850 million.

Early-stage investor VC Wing has closed a $600 million fund to invest in AI startups. The firm's portfolio includes cloud companies Snowflake and Cohesity.

Netherlands-based BioGeneration Ventures has closed its latest fund, BGV V, on €150 million. LPs in the fund include Eli Lilly, Novo Holdings and Bristol Myers Squibb.

Distributed Ventures has raised $100 million to invest in seed to Series A startups in the insurtech, healthtech and fintech sectors. The firm was previously known as NFP Ventures.

Corporate M&A

Exxon Mobil has agreed to acquire Denbury, a US oil and gas producer with extensive carbon dioxide sequestration infrastructure, for $4.9 billion in an all-stock deal, Reuters reported.

Gen II Fund Services has agreed to buy London-headquartered fund administrator Crestbridge's private equity and real estate fund administration business.

Chart of the Day

"PE managers have had to adjust to make deals happen and keep the sputtering LBO machine from stalling. Deals have gotten smaller, making them more digestible and easier to finance. Many are add-ons, which have taken on outsized importance in the current environment ... and now account for nearly eight out of every 10 buyouts."

Source: PitchBook's Q2 2023 US PE Breakdown

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PitchBook News - A glimpse into fund performance

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