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The Daily Pitch: VC

August 29, 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 space-tech sector is seeking avenues for broader consumer usage

As distributable earnings shrink, public US PE firms watch AUM continue to pile up

Which private market strategies are still raking in LP commitments?

Today's Top Stories

Can any space-tech startup thrive in SpaceX's shadow?

While trips to Mars may be far out on the horizon, VC is still betting on the space-tech sector. In a field dominated by SpaceX, can any startup break out and make a splash?

Our latest Emerging Tech Research covers the key players and areas for potential growth and competition. These include startups working toward pharmaceutical development in space to those working on launching more satellites. Broader consumer usage of space tech may still seem like a moonshot, but VCs have their eyes on the stars.

read the preview

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Global fundraising data shows LPs' shifting appetite

Private capital fundraising has been declining since Q4 2021, a trend that started accelerating at the end of last year, our latest Global Private Market Fundraising Report shows.

An arrested exit environment may be hindering LPs' ability to fund new investments from distributions of existing funds, but GPs are also easing demand for cash by ratcheting back on capital calls.

Despite the decline, allocators continue to make commitments because a down market has historically resulted in the best-performing funds. So far this year, private debt funds have made gains relative to other strategies, while VC and real assets have fallen from favor.

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A message from Ontra

Exclusive event: Navigating the private markets' legal transformation

Ready or not, AI has arrived.

The private markets are changing rapidly, and the industry's legal professionals are grappling with new expectations and technologies.

This evolution will be addressed at the Ontra Leadership Forum: an exclusive event for senior legal professionals in the private markets. Industry experts will delve into the challenges that in-house legal teams face and discuss opportunities and strategies to drive value and innovation with AI and other legal tech.

Register now for the virtual event

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Ranking the most active investors of Q2

Our interactive Global League Tables are now available for Q2 2023, covering the full range of private market activity. The tables break down the most active investors by region, industry, deal type and more, along with ranking advisers, acquirers and law firms. Who led the way?

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Empires grow as earnings fall

Among public PE firms turned multistrategy asset managers, distributed earnings took a hit from the slow exit pace in Q2 while AUM figures continued their perpetual march upward. Firms like Blackstone, which reached a milestone $1 trillion in AUM while its distributed earnings dropped more than 40% year-over-year, epitomize the industry's growing pains.

Our US PE earnings dashboard tracks all the key performance indicators for the big public firms that set the industry's agenda.

explore the dashboard

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Trends in AI: Private investment in a new technology wave

Growth of AI applications has skyrocketed with VC investment hitting a peak in 2021, followed by a correction in 2022.

Now, investment is on the rise again, including $11 billion in backing from Microsoft in OpenAI. PE deals drove competition, notably in the healthcare space, where AI is raising concerns about privacy even as it's expected to boost drug discovery.

Explore this report that details industry trends, Big Tech's role, and a look ahead at transformational change and AI anxiety.

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VC Deals

Databricks is in talks with T. Rowe Price to raise new funding that would value the company at $43 billion, Bloomberg reported.

Generative AI video startup Tavus has raised an $18 million Series A at an $80 million valuation, The Information reported.

Moxie, which helps independent practitioners launch and manage medical spas, has raised $15.7 million in a round led by SignalFire and Boulton & Watt.

Qualiti.ai, a software testing automation startup, has raised a $6.5 million seed round led by Sierra Ventures and joined by Epic Ventures.

PE Deals

PIF-backed AviLease has agreed to purchase Standard Chartered's global aviation finance leasing business for roughly $3.6 billion. The Dublin-based business owns more than 120 aircraft and offers related financial services.

KSL Capital Partners has agreed to acquire NYSE-traded hotel REIT Hersha Hospitality for $10 per share, or $1.4 billion, in a take-private deal. The real estate trust owns and operates 25 hotels in the US.

United Arab Emirates-based PureHealth, backed by ADQ, has agreed to acquire UK hospital operator Circle Health Group from Centene for $1.2 billion, including debt.

L Catterton has agreed to take Nasdaq-traded supplement maker Thorne HealthTech private for $680 million at $10.20 per share.

Intrepid Financial Partners has invested in Energy Spectrum Capital-backed Tivoli Midstream, funding the company's purchase of a north Texas crude oil pipeline system from Phillips 66 and providing Tivoli with growth capital.

Family office Dunes Point Capital has acquired Warshaw in a debt and equity transaction. Warshaw supplies electrical products for various industries.

FFL Partners has staked JCCT, which provides clinical research services to biotech companies and contract research organizations.

Fundraising

Fvlcrum Partners has closed its latest fund on $302 million. The lower-middle-market PE firm targets impact investments that address the US racial wealth gap.

Greencode Ventures has completed a first close on a €40 million fund that will invest in startups working on green transitions and technologies.

PE firm Trustar Capital plans to raise a continuation fund for its 42% stake in McDonald's China, Reuters reported. Hong Kong-based Trustar is targeting a $10 billion valuation for the business.

Corporate M&A

Laboratory equipment maker Danaher has agreed to acquire UK-based Abcam, which supplies antibodies and proteins to the life sciences industry, for roughly $5.7 billion.

Chart of the Day

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

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