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| In today's Daily Pitch, you'll find:
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Examining US investments in China
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Over the last two decades, US investment has played an active role in propelling the growth of the Chinese venture market. Our latest analyst note unpacks the history of this market and the impact of escalating US-China tensions on American investors going forward.
- VC funds denominated in US dollars in China have a history of backing some of the most successful tech startups in the country, including ByteDance, Baidu and Shein.
- US LP commitments to such funds have waned in recent years, hitting a six-year low of 31 commitments in 2022.
- The pullback of US investors may not lead to as significant a void in China's VC market as expected, and some Chinese GPs have already been looking elsewhere for capital.
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Arm's $54.5B IPO delivers SoftBank nearly $5B windfall
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| (Alexander Spatari/Getty Images) |
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Arm cracked the IPO window open yesterday, pricing at $51 a share—at the top of its initial pricing range—valuing the company at $54.5 billion.
But the IPO of the 33-year-old, well-established, profitable company is a weak guide for what to expect from VC-backed offerings such as Instacart and Klaviyo, which have already filed their offerings, or the hundreds of others waiting in the wings. |
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Navigate market shifts with Ansarada's 2023 Deal Indicators report
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In today's unpredictable market, certainty is paramount. Ansarada presents the 2023 Deal Indicators report. Derived from Ansarada's proprietary Data Room data, the report provides a snapshot of emerging trends, empowering dealmakers to make informed decisions.
Highlights:
- M&A is stabilizing to pre-COVID-19 growth levels, driven in part by sustainability initiatives and transformative AI technologies.
- Rising bankruptcy and insolvency transactions underscore the urgent need for adaptability.
- Deals are taking nearly three months longer to complete than last year, reflecting market uncertainty.
- Corporates are spending more time validating deal decisions in the cautious environment.
Uncover forward-facing data on transactional & industry trends, ESG factors, and more—including a limited-time offer for annual subscription plans to build certainty in the current climate.
Download the Deal Indicators report |
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PitchBook IPO insights: A first look at Klaviyo's S1
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| (SOPA Images/Getty Images) |
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Marketing tech company Klaviyo's upcoming IPO is further proof that the IPO market is open for high-quality companies.
The listing reaffirms two things. First, fast-growth startups have better IPO prospects because they’ve grown into their valuations, making their investors more likely to push for an IPO. Second, investors want a credible path to profitability.
PitchBook analysts James Ulan and Derek Hernandez take a look at Klaviyo's financials and what they say about current valuations. |
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CalSTRS partners with Sapphire to fund emerging VC managers
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| (PictureLake/Getty Images) |
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CalSTRS has reaffirmed its commitment to emerging managers with a new partnership to invest in early-stage VCs.
The California State Teachers' Retirement System announced yesterday it has partnered with Sapphire Partners, the LP arm of tech investment firm Sapphire Ventures, to continue its emerging manager program.
Through the partnership, Sapphire Partners will manage five of CalSTRS existing funds dedicated to investing with new and emerging VC and PE managers. |
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India VC activity pulls back to pre-pandemic levels
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| (Tuul & Bruno Morandi/Getty Images) |
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India has seen a significant decline in VC deals this year due to continued market uncertainty.
Take a look at our snapshot of India's venture ecosystem to see key trends across venture dealmaking, fundraising and exits this year. |
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Perpetual capital fuels largest PE managers' growth
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| (Photo by Mike Kline (notkalvin)/Getty Images) |
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Some of the largest private investment firms managed to fuel their asset and revenue growth by tapping into perpetual capital when the industry hit a speed bump.
Holdings in perpetual capital helped PE managers defy a fundraising slump, accelerate asset growth and retain steady fee-related earnings. This funding source doesn't limit GPs to some of the features that characterize traditional private funds, including drawdowns, exit deadlines and repetitive fundraising efforts.
As a result, scores of investment firms have been scaling up their efforts to grow this type of asset in recent years. |
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Ranking the most active lenders in PE
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Eight lenders took part in at least 25 deals each for US PE-backed companies in the second quarter, with the most active six tallying at least 30 apiece.
Which firms led the way? See our Q2 2023 PE Lending League Tables, sponsored by Twin Brook Capital Partners. The interactive tables can be sorted by deal type, geography, sector and more. |
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Some of the world's largest law firms are launching dedicated space law practices to support startups facing an uncertain legal landscape. [Financial Times]
Is this really a turning point for geothermal energy, or just more hype? [Vox]
Can Yahoo be saved? How Apollo is rebuilding an internet icon. [The Information] |
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Since yesterday, the PitchBook Platform added:
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15
VC valuations
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2887
People
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652
Companies
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16
Funds
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The Daily Benchmark:
2011 Vintage European VC Funds
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A message from Allied Advisers
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Navigating M&A in uncertain markets—2H 2023 update
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Allied Advisers' report highlights key trends that have emerged in the current M&A markets, which have changed significantly in terms of deal volume and valuation. It is however encouraging to see recent improvements to a more rational and sustainable market. Also, the impending reemergence of the technology IPO market featuring growing and profitable companies will create M&A currency and is expected to further stimulate deal flow.
The question of "are the market conditions right" remains in the minds of investors and executives interested in exploring M&A. We address this question by sharing our perspectives on how to achieve a successful M&A outcome. Our recommendations are based on Allied Advisers' deep experience in advising clients on their exit to both Fortune-500 and mid-market strategic buyers, as well as a diversity of PE funds.
Read the full report |
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Vista Credit Partners has led a $150 million Series G for adtech company VideoAmp.
Tarana Wireless, which makes fixed wireless access technology for internet providers, has raised $50 million in a round led by Digital Alpha Advisors.
Paris-based embedded finance startup Swan has secured a €37 million Series B led by Lakestar.
Mac and cheese brand Goodles has raised $13 million in a Series A led by L Catterton.
Barcelona-based healthcare data startup Iomed has secured a €10 million Series A led by Philips Ventures and XTX Ventures.
Deduce, which offers a platform designed to prevent AI-generated identity fraud, has raised $9 million led by Freestyle Capital.
Raylo, which offers a tech subscription platform, has raised £5 million in a round led by Macquarie Group and Channel 4 Ventures.
Q-Bot, a UK-based startup that uses robots to install underfloor insulation, has raised over £3.5 million from investors including EMV, Wealth Club and Adjuvo.
AI forest mapping specialist Treefera has secured a $2.2 million pre-seed investment led by Concept Ventures.
Roam, which offers a home buying platform, has raised $1.25 million in a seed round led by Founders Fund. |
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Don't miss our upcoming webinar
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Given shaky investor sentiment and prolonged regulatory tightening, many industry players wonder what's ahead for US PE in Q4. While banks have been slow to commit to new loans, syndicated LBOs picked up steam in H1 and are forecast to continue in Q4. PitchBook analysts will revisit forecasts made at the beginning of the year with updates from our 2023 US Private Equity Outlook: H1 Follow-Up. Key topics include:
- PE exits remain muted but the bid-ask spread has narrowed, and pressure is building for an M&A recovery.
- PE returns have underperformed public market returns year-to-date.
- Take-private activity, contingent on debt availability, has seen deal sizes shrink.
Resister now to secure your spot. |
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L Catterton-backed German footwear brand Birkenstock has filed for an IPO in the US. After the offering, the PE firm will retain a majority stake in the company, whose other backers include Singapore's GIC and LVMH.
South Korea's Shinhan Asset Management, 3i Infrastructure and DWS will sell their combined stake in Dutch waste treatment company Attero to Ardian for roughly 1.2 trillion won (around $902.6 million), The Korea Economic Daily reported. |
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Vertex Ventures Southeast Asia and India has closed its fifth fund on $541 million, surpassing its target of $450 million.
Electric Capital is targeting $300 million for its third fund, according to an SEC filing. The crypto-focused VC firm raised $1 billion across a pair of funds in 2022.
Hong Kong-based C Capital has closed its third fund on over $250 million, its largest PE fund so far.
UK direct lender RiverRock has reached a €153 million first close of its Senior Loan Fund II.
The International Finance Corporation will invest up to €15 million in the maiden fund of Ivory Coast-based firm Joliba Capital, which will target small and medium-sized enterprises in West and Central Africa. |
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| Early-stage venture firm BlueRun Ventures China, which has offices in offices in Beijing and Singapore, is rebranding as Lanchi Ventures. |
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