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The Daily Pitch: VC

August 11, 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:

Our Quantitative Perspectives report weighs the macroeconomics affecting private markets

For PE and VC investors, Biden's China tech ban was a long time coming

Generative AI innovators' lack of revenue growth is frustrating investors

VC-backed IPOs are trailing the Nasdaq as they continue their ascent

Today's Top Stories

Partly sunny skies for private investing in Q3

Mixed signals abound: Most indicators show the economy on firmer footing, but our model finds it's still likely the US will enter a recession by 2025. Venture capital funds produce some of the strongest quarterly returns, but their performance is also the most volatile, and the ecosystem is struggling with unfavorable exit conditions.

With 50-plus pages of charts, our Q3 2023 Quantitative Perspectives: US Market Insights peers into PE, VC, real estate, real assets and debt through a macroeconomic lens.

read it now

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PE, VC investors on Biden's China tech ban: We're ready

(sefa ozel/Getty Images)

President Joe Biden signed an executive order banning new American investments in certain technology sectors critical to national security, part of steadily escalating tensions between the two countries. But it doesn't come as a surprise to PE and VC investors.

Recommended Reads

This startup is working to make Nikola Tesla's dream of generating electricity out of thin air a reality. [Sifted]

Can Uber and Lyft ever make real money? [The Economist]

Robots, computers and algorithms are hunting for potential new therapies in ways humans can't. [Wired]

Since yesterday, the PitchBook Platform added:

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People

597

Companies

29

Funds

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The Daily Benchmark:
2016 Vintage Global VC Funds with more than $250M

Median IRR

23.35%

Top Quartile IRR

30.65%

0.43x

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Battery Ventures XI Side Fund

Sofinnova Venture Partners X

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VC Deals

Data visualization startup Virtualitics has raised a $37 million Series C led by Smith Point Capital.

Wint, a water management and leak prevention startup, has raised a $35 million Series C co-led by Inven Capital and Insight Partners.

Real estate software startup Flueid has closed its Series B1 round at $32.5 million led by Aquiline Technology Growth.

Trove, a resale and trade-in startup, has raised a $30 million Series E co-led by ArcTern Ventures and Wellington Management.

Osano, a privacy management software startup, has raised a $25 million Series B led by Baird Capital.

Stabl Energy, a Munich-based developer of battery storage systems, has raised €15 million from investors including Nordic Alpha Partners and the European Innovation Council.

S2G Ventures and Soundwaves have led a $10 million Series A in Matter, a UK-based startup focused on capturing, harvesting and recycling microplastics.

Mable Therapy, a UK-based platform for children's speech and language therapy and counseling services, has secured £3.1 million from Gresham House Ventures.

Oslo-based cybersecurity startup Pistachio has raised €3.25 million in a round led by Signals Venture Capital.

PE Deals

STG will acquire US-listed media and entertainment technology provider Avid for around $1.4 billion.

A group led by QIC has invested $450 million in Renewa, a Houston-based company that acquires and leases out land beneath renewable energy projects in the US.

WindRose Health Investors-backed Healthmap Solutions, a population health management company focused on kidney disease, has raised $100 million from its investors.

Warburg Pincus and TA Associates have agreed to buy Epassi, a Finnish employee benefits platform, from Bregal Milestone.

MML has invested in UK-based prefabricated building specialist Premier Modular.

Portfolio Companies

CVC Capital Partners has been considering selling a Kenyan tea plantation owned by its portfolio company Ekaterra, the Financial Times reported, after a BBC documentary showed abuse and exploitation at the site under its prior owner, Unilever.

Exit & IPOs

Permira is among those interested in buying London-based IT services company Options Technology as Abry Partners looks to exit, Unquote reported.

Fundraising

Blackstone has held the final close of Blackstone Green Private Credit Fund III on $7.1 billion, in what the firm says is the biggest energy transition-focused private credit fund ever raised.

Princeton Equity Group, which makes control investments in franchisor and multi-unit companies, has closed on $575 million for its second flagship fund.

Corporate M&A

Tapestry—which owns brands including Coach, Kate Spade and Stuart Weitzman—has agreed to acquire fashion group Capri Holdings, owner of Versace, Jimmy Choo and Michael Kors, for $8.5 billion.

Chart of the Day

"Sponsors are always on the lookout for recession-proof companies that have the ability to pass inflation costs onto their customers or scale up whilst improving margins, especially in times of stubbornly high inflation in Europe. For example, French sneakers retailer Courir was sold by PE firm Equistone Partners Europe in Q2 after a holding period of just four years. Given that sneakers are a consumer discretionary item, Courir may struggle to grow financially in the current environment, and this could be a potential reason the sponsor exited the company to larger sports chain JD Sports Fashion."

Source: PitchBook's Q2 2023 European PE Breakdown

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PitchBook News - Mixed signals for private markets

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