PitchBook News - Big deals prop up enterprise SaaS

Which universities produce the most female founders?; VCs lend hand to new space programs; down rounds rising but lag earlier downturns
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The Daily Pitch: VC
September 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:
  • We've ranked the top colleges by successful female startup founders

  • Behind the luster of two star-studded deals, VC investing in enterprise SaaS is on the decline

  • Countries with nascent space agencies are ripe for VC investment in space tech

  • The rate of down rounds has surpassed 10% of US venture-backed deals

  • Distressed debt funds may sound attractive in a rough economy, but they are hurting, too
Today's Top Stories  
Enterprise SaaS sags overall despite blockbuster deals
The enterprise SaaS vertical has hit some of its lowest deal values since 2020, with Q1 generating $8.2 billion in deal value (down more than 60% from Q1 2022) and Q2 hitting $9 billion (down 50% year-over-year), according to our latest Emerging Tech Research. This, however, excludes the outsized influence of two huge deals within the vertical this year: OpenAI's $10 billion Microsoft deal and the $6.9 billion Stripe round.
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PitchBook Universities: Female founders edition
Female startup founders face well-documented challenges as entrepreneurs. For some, attending a university with a strong network of venture-backed founders can improve the odds of success.

As part of our annual university rankings, PitchBook has compared schools by the number of female founder alumnae who have raised venture capital in the last decade. The rankings are broken down by undergraduate, graduate and MBA programs.
see the rankings
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A message from Allvue Systems  
Find direction in your ESG monitoring: 80+ KPIs by industry
Whether your firm is looking to improve its KPI tracking abilities or starting to track ESG KPIs for the first time, understanding what metrics filter into your ESG goals is a foundational step. The next step is mastering a way to collect and report on that data.

Check out all the KPIs that Allvue's Fund Performance and Portfolio Monitoring solution can track by downloading a comprehensive list of ESG KPIs by industry.
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Industry Ventures rides secondaries wave with $1.7B across 2 funds
(Abstract Aerial Art/Getty Images)
Industry Ventures, one of the largest and oldest secondary VC investors, now has a lot more capital to provide liquidity for VC fund managers and their LPs, many of whom are eager to realize returns amid the slow exit environment.

The firm has raised a $1.45 billion 10th flagship secondary fund and a $250 million second tech buyout fund, a strategy that helps VC-backed companies sell to small buyout shops.
read more
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VCs orbit countries with growing space agencies
(Michael Dunning/Getty Images)
VCs are looking toward the stars, eyeing the next opportunities in space tech.

Many think those opportunities exist in countries with new or emerging space agencies that are giving rise to startup ecosystems. Investors are ready to capitalize on relaxing foreign investment laws, more government investment and an appetite for commercial partnerships.
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Down rounds rising but lag earlier downturns
Down rounds are the talk of the town in VC right now, ensnaring startups large and small. Take Ramp, a finance automation specialist that swallowed a 30% cut to its last valuation in its $300 million funding raise last month.

Nearly 11% of venture-backed deals this year have been at a discount to the previous round, PitchBook data shows. This rate represents a sharp reversal from recent lows but remains well shy of prior downturns, and indicates more dominoes could fall if fundraising conditions don't improve.
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Distressed debt funds suffer serious fundraising slump
(Ray Massey/Getty Images)
At a time when many businesses are feeling the pinch, distressed debt funds may seem well-placed to pitch to investors. But they are also struggling with the tight economic environment.

Only a small handful of distressed debt funds have closed this year, in contrast to other private debt strategies that have attracted far more capital.
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Recommended Reads
Binance, the world's biggest crypto exchange, is melting down. [The Wall Street Journal]

The Federal Trade Commission alleges secret projects and manipulative pricing at Amazon. [The Information]

Eddy Cue, a longtime executive at Apple, says the company's multibillion-dollar deals with Google were driven by quality, not money. [The New York Times]
Since yesterday, the PitchBook Platform added:
VC valuations
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The Daily Benchmark:
2017 Vintage European Real Assets Funds
Median IRR
Top Quartile IRR
Median DPI
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Infracapital Greenfield Partners I
iCON Infrastructure Partners III
Deutsche Bank Pan-European Investment Fund II
*IRR: net of fees
13 Funds in Benchmark »
Check out the latest version of PitchBook Benchmarks
Temasek-backed 65 Equity Partners has hired Pascal Heberling from BC Partners to head its major European regions and Leon Bruijs, formerly of Palladium Equity Partners, to lead its East Coast operations.
VC Deals  
Kneron, an AI chipmaker, has secured an additional $49 million for its Series B from investors including Foxconn and Alltek, bringing the round's total to $97 million.

Acesion Pharma, a Copenhagen-based developer of therapies for atrial fibrillation, has secured a €45 million Series B led by Canaan and Alpha Wave.

Zurich-based Pexapark, which offers a renewable energy investment platform, has raised a €20 million Series C led by Telstra Ventures.

AI testing startup Kolena has raised a $15 million Series A led by Lobby Capital.

Cybersecurity startup Vali Cyber has raised a $15 million seed round co-led by Grotech Ventures and the 412 Venture Fund.

Austria-based Kern Tec has raised a €12 million Series A from investors including Telos Impact and PeakBridge VC. The startup turns wasted fruit pits and seeds into ingredients for plant-based dairy products.

QT Medical, a cardiac care technology startup, has raised a $12 million Series B led by CDIB Capital and Taiwania Capital.

Mintago, the developer of a financial well-being platform, has secured a $4.75 million Series A from investors including Love Ventures and Cur8 Capital.
What to expect at SXSW Pitch 2024
Venture capital may be in the midst of a tepid market, but the nine categories featured in SXSW Pitch 2024 show a lot of promise, according to our analysts.

Download our new report to discover what kinds of companies may join the ranks of Pitch alumni such as Siri, Tango, and Klout and to find out why the competition's fast-growing spaces hold so much potential.

Download now
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PE Deals  
Arlington Capital Partners has agreed to acquire Exostar, which offers business collaboration software for highly regulated industries, from Thoma Bravo.

Audax Private Equity and the management of Oakbridge Insurance have acquired stakes in the insurance brokerage from Corsair Capital, which backed the company during its founding in 2020.

Tern Capital has acquired UK retail space planner CA Design Services from Boskalis, a Netherlands-based maritime services company.

Manna Capital Partners' beverage industry-focused investing arm has said it intends to acquire contract packager Nor-Cal Beverage.
Exit & IPOs  
CVC Capital Partners is considering selling its 60% stake in Indian cancer care specialist HealthCare Global Enterprises, which is worth about $345 million, Bloomberg reported.

Restaurant franchising company Fat Brands has acquired the Smokey Bones barbecue chain, which has 61 locations in 16 states, from Sun Capital Partners for $30 million.
Paine Schwartz Partners has held the final close of Paine Schwartz Food Chain Fund VI, which invests in the food and agribusiness sectors, on $1.7 billion. The fund has invested in companies including AgroFresh Solutions, Costa Group and Elemental Enzymes.

ECI Partners has closed its 12th buyout fund on £1 billion, exceeding its target of £900 million.

Oakley Capital has closed its second lower-middle-market fund on its hard cap of €750 million.

Amsterdam-based Set Ventures has launched a €200 million fourth fund targeting early-stage energy transition startups.
Chart of the Day  
Source: PitchBook's H1 2023 Private Debt Report
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