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The Daily Pitch: VC

July 27, 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:

The cash piles available for M&A deals are at odds with high interest rates

All good PE deals should come to an exit—and the US pipeline picked up in Q2

European VC deal sizes are trending up as investors target late-stage rounds

Today's Top Stories

Towering cash piles encourage global M&A growth

Between PE sponsors and corporations, trillions of dollars of dry powder and cash on hand—near all-time highs—are primed for spending on M&A. Ready capital has kept the M&A deal count close to last year's levels, while the value of those deals is falling much faster.

Our Q2 2023 Global M&A Report, sponsored by Liberty GTS and RBC Capital Markets, explains the tug-of-war between the dry powder and cash reserves ready to strike M&A deals and the interest rates making them expensive, with deal multiples broken down by region and sector.

read the report

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Europe's median VC round swells as investors target larger deals

(alfexe/Getty Images)

The median European VC deal size has continued to grow as late-stage rounds account for a larger share of deal activity.

As overall VC funding has declined, investors are focusing their capital on follow-on rounds for more mature startups.

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Since yesterday, the PitchBook Platform added:

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Funds

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The Daily Benchmark:
2016 Vintage Global Funds-of-Funds

Median IRR

19.58%

Top Quartile IRR

24.73%

0.50x

Median DPI

Select top performers

Spectra Investments III

Adams Street Venture Innovation Fund

SVB Strategic Investors Fund VIII

*IRR: net of fees

43 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

VC Deals

Headspace has secured $105 million in debt from Oxford Finance. The company develops a mental health wellness app.

Biotech startup Nexo Therapeutics has emerged from stealth with a $60 million Series A led by Versant Ventures.

Protect AI, which provides security for AI and machine learning systems, has raised a $35 million Series A led by Evolution Equity Partners. Salesforce Ventures also participated.

Collaborative Robotics has raised a $30 million Series A led by Sequoia.

Octave Bioscience, which specializes in treatments for multiple sclerosis, has extended its Series B with $30 million from investors including Novartis, Hikma Ventures and Intermountain Ventures.

London-based AutogenAI has raised $22.3 million from Blossom Capital. The startup uses large language models to help companies write bids and tenders for contracts.

iotaMotion has raised a $12 million Series A led by RCT to develop robotic assistance for cochlear implant surgeries.

Zurich-based Nezasa, which offers a travel booking platform, has secured $4.7 million from investors including Alpana Ventures and Liquid Partners.

Mobilo, based in Amsterdam, has received €3.7 million from investors including DeepWork Capital and TMT Investments for its smart business card.

PE Deals

An investment group led by Haveli Investments and joined by General Atlantic has agreed to buy Advent International-backed Certinia, a B2B software company. The deal valued the vendor at nearly $1 billion with debt, Reuters reported.

Bain Capital Tech Opportunities and Valeas Capital Partners have led an investment in Ren, a third-party company that administers charitable giving of nonliquid assets.

The Carlyle Group has extended a $200 million loan to iRobot, the maker of Roomba vacuums, as it awaits regulatory approval of Amazon's takeover of the company.

Jio Financial Services, the financial services arm of billionaire Mukesh Ambani's business empire, has inked a deal with BlackRock to launch an asset manager for Indian investors, called Jio BlackRock. BlackRock and Jio will each invest up to $150 million in the joint venture.

General Atlantic has announced a $160 million strategic growth investment in MAC Hospitals, one of Mexico's largest hospital providers.

Qatar's sovereign wealth fund, the Qatar Investment Authority, is considering a minority stake in billionaire Mukesh Ambani's Reliance Retail Ventures, the Financial Times reported.

Rcapital has completed its acquisition of UK elevator maintenance business Temple Lifts from Japanese conglomerate Hitachi.

KSL Capital has acquired luxury hotel chain Sereno, which has resorts on Lake Como in Italy and Saint Barthelemy island in the Caribbean.

Craftable, a SaaS platform for the hospitality industry, has received a strategic investment from Gauge Capital.

Exit & IPOs

Agilitas Private Equity has sold Hydro International, an industrial wastewater services and products specialist based in the Irish Republic, to Oldcastle Infrastructure.

Summa Equity is selling Norwegian energy efficiency software platform Kiona to Carel, an Italian energy efficiency components maker.

Fundraising

Consumer-focused PE firm, Bansk Group, has closed its inaugural fund on $800 million.

CenterGate Capital has closed its second fund on more than $375 million, Buyouts Insider reported. The fund will focus on buyouts in the lower middle market.

Chart of the Day

"Another source of credit for add-ons is net asset value (NAV) financing. Instead of using an individual company as collateral, these lenders use the NAV across a portfolio of companies held by a fund. This further explains why add-on dealmaking is so frenzied, as it is seen by sponsors as a way to fix up portfolios in advance of selling these platform companies further down the road, and every bit of leverage counts."

Source: PitchBook's Q2 2023 US PE Breakdown

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PitchBook News - M&A gallop fettered by high rates

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