PitchBook News - VC's looming deficit

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The Daily Pitch: VC

August 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:

Growing debt costs drag healthcare services dealmaking into an unexpected slump

PE firms' healthcare fundraising boost is sticking around

How today's VC market is shouldering overcapitalization from 2021

Corporate desire for security is shoring up exits for infosec startups

In Europe: fewer startup bankruptcies, fewer new ventures

Today's Top Stories

The looming venture capital deficit

PitchBook's capital-demand-to-supply model illustrates how the immense amount of capital that entered the market in 2020 and 2021 impacted the dynamics of VC. Startups had previously come back to market on a regular schedule to raise new rounds, even as deal sizes increased.

As the market shifts to efficiency, startups have stretched themselves further between rounds. Our latest analyst note lays out how to account for these mechanics in this new investment environment and how the era of market overcapitalization is over—for now.

read it now

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Debt costs drag on healthcare services dealmaking

PE dealmaking for healthcare services companies slowed further in Q2 as some heavily leveraged platforms strain under the growing cost of debt and impending maturity walls.

But as healthcare specialist firms continue successfully fundraising and the broadly syndicated loan market cracks open, PitchBook analysts expect deal activity to gradually recover in coming quarters.

Our latest industry research breaks down PE trends and investment strategies in healthcare services, with spotlights on mental health services and medical spas, two of the sector's hottest investment categories.

read the report

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A message from PitchBook

PitchBook's 2023 Media Kit released

With uncertainty across the private and public markets likely to continue, strong and insightful thought leadership is critical to your clients and prospects.

By partnering with PitchBook Media, you will have daily opportunities to reach 1.5M+ industry professionals in our newsletter, and you can broaden exposure of your brand through our core industry reports. We also help clients create custom research to share data-driven insights on the market.

Our 2023 Media Kit contains all the details to help your firm position itself in front of a VC or PE audience.

Click here to download it today or to speak to someone on the media team.

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LPs seek recession hedge with PE healthcare funds

(picture alliance/Getty Images

"We moved from a recession to a pandemic to another potential recession," and those forces have boosted interest in specialty PE healthcare investors, says PitchBook analyst Rebecca Springer.

That's evident in the fundraising data, as healthcare specialists avoid the slump that faces other PE firms in 2023.

Recommended Reads

An "iconic" Andreessen Horowitz investor is turning heads in the defense tech sector. [The Information]

Before a bot steals your job, it will steal your name. [The Atlantic]

When researchers claimed to discover a room-temperature superconductor, it set off a brief but intense hype cycle among investors and entrepreneurs. [The Washington Post]

Since yesterday, the PitchBook Platform added:

1

VC valuations

99

People

24

Companies

See what our data software can do

The Daily Benchmark:
2017 Vintage Global Real Assets Funds

Median IRR

12.50%

Top Quartile IRR

18.43%

0.29x

Median DPI

Select top performers

Ridgemont Equity Partners Energy Opportunity Fund

EIV Capital Fund III

Waterous Energy Fund

*IRR: net of fees

44 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

VC Deals

Climate-tech startup Persefoni has raised a $50 million Series C1 round led by TPG Rise.

Tracer, a data intelligence specialist, has raised an $18.1 million Series A co-led by NewRoad Capital Partners, Progress Ventures and BDMI.

Atmosfy has raised a $12 million seed round led by Redpoint Ventures for its restaurant review video platform.

Germany's Neotaste, which makes a restaurant-finding app, has closed a €5.9 million Series A led by Burda Principal Investments.

Olis Robotics has secured $4.1 million led by PSL Ventures to design industrial-grade robots.

Saeki Robotics, a Swiss developer of robotic digital manufacturing units, has raised $2.3 million led by Wingman Ventures.

PitchBook webinar: Improving behavioral health outcomes

The demand for behavioral healthcare has never been greater. Providers and payers are turning to measurement-based care to capture and manage clinical outcomes to improve the delivery of behavioral healthcare and generate financial ROI.

In this webinar, PitchBook lead healthcare analyst Rebecca Springer will speak with representatives from Aurora Mental Health & Recovery, Colorado Access, and Owl Health about the transformation of treatment and business models in the behavioral health industry.

Register now to secure your spot.

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PE Deals

The Italian government has signed a preliminary agreement with KKR to take up to a 20% stake in Telecom Italia's landline network as the firm prepares to make a €23 billion binding offer for the business.

General Atlantic and Dragoneer Investment Group have agreed to buy Arco Platform in a deal that values the Brazilian-listed education software company at $1.5 billion.

Oakley Capital will purchase Flemming Dental, Excent, and Artinorway Group from European Dental Group.

Exit & IPOs

Forward Air will acquire Omni Logistics, a freight forwarding company backed by Ridgemont Equity Partners and EVE Partners, for Forward Air stock and $150 million in cash. Omni's sellers plan to retain some ownership.

Fundraising

CVC Capital Partners has raised more than $4.45 billion of a $6 billion target for its sixth Asia-focused fund, Reuters reported.

Corporate M&A

FC Barcelona has agreed to sell its content creation platform Barca Media to Nasdaq-listed Mountain & Co. I Acquisition Corp. in a SPAC deal that gives the business an enterprise value of $1 billion.

Chart of the Day

"Smaller venture funds have outperformed their larger counterparts during recent periods. A reason for this outperformance is that those funds have focused on the earlier stages of the venture lifecycle, where valuations have held up relatively well throughout the slowdown."

Source: 2023 Global Fund Performance Report (as of Q4 2022 with preliminary Q1 2023 data)

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PitchBook News - VC's looming deficit

Older messages

Mixed signals for private markets

Down rounds are way up

Founders selling shares? Not just yet

Introducing our healthcare funds coverage

Banks' venture debt rebound

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