PitchBook News - AI courts internet-of-things sector

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The Daily Pitch: VC

September 29, 2023

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Today's Top Stories

A shifting landscape for IoT funding

Can AI energize the internet-of-things market? Our latest Emerging Tech Research on the space covers potential growth areas for investors and key product segments, including connected buildings and industrial IoT.

Despite a shifting VC funding landscape, large market opportunities for IoT startups remain, while generative AI has the potential to accelerate growth in the industry.

read the preview

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AI startups still snag huge valuations despite lack of revenue

Panelists speak Sept. 20 at the TechCrunch Disrupt conference.
(Courtesy of TechCrunch)

AI startups are grabbing valuations in the hundreds of millions, despite having hardly any revenues to speak of. Investors say it is too early to expect meaningful revenues from generative AI startups, and they are willing to pay high prices for future potential.

Since 2022, 74 AI companies closed rounds with post-valuations of $100 million or more. Tomasz Tunguz, founder of Theory Ventures, estimates that 95% of these companies are making less than $5 million in annual recurring revenue.

Recommended Reads

In Canada, $67 billion of rare minerals is buried under one of the world's biggest carbon sinks. [The Wall Street Journal]

VCs are dangling AI chips to woo founders. [The Information]

Google user data has become a favorite police shortcut for solving crimes. [Bloomberg]

Since yesterday, the PitchBook Platform added:

14

VC valuations

2479

People

547

Companies

25

Funds

See what our data software can do

The Daily Benchmark:
2021 Vintage North American Debt Funds

Median IRR

9.09%

Top Quartile IRR

13.45%

0.09x

Median DPI

Select top performers

GoldenTree Distressed Fund IV

BDCM Opportunity Fund V

SVB Innovation Credit Fund VIII

*IRR: net of fees

68 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

VC Deals

Enflame, a Chinese AI semiconductor startup, has raised 2 billion yuan (about $274 million) co-led by Shanghai International Group with participation from Tencent, Reuters reported.

AlphaSense, a market intelligence platform, has raised a $150 million Series E at a $2.5 billion valuation led by Bond.

Cardata has raised $100 million in a growth round led by Wavecrest Growth Partners. The company provides mileage reimbursement software for companies.

Lithuanian VPN provider Nord Security has raised $100 million in a round led by Warburg Pincus.

Transfr has raised a $40 million Series C led by ABS Capital for its virtual reality career-training platform.

Women's professional volleyball league League One Volleyball has raised a $35 million Series B led by Left Lane Capital, Bloomberg reported.

Sitryx Therapeutics, a UK-based developer of therapies for chronic autoimmune and inflammatory diseases, has secured $39 million from investors including Oxford Science Enterprises, SV Health Investors and Sofinnova Partners.

London-based payments and accounting platform Apron has received a $15 million Series A led by Index Ventures.

Laverock Therapeutics, a UK-based provider of cell therapies, has received £13.5 million in a round led by Calculus Capital.

Women's health startup Evvy has raised a $14 million Series A led by Left Lane Capital.

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PitchBook Emerging Tech Research analysts will be joined by a few Y Combinator-backed founders to investigate how AI is changing fintech and financial services. Key topics include:

The new AI-first fintech companies that are offering advanced services with novel functionality.

How AI will change fintech and financial services forever, with predictions on the winners and losers in today's AI race.

How customers view and use AI-first fintech offerings.

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PE Deals

Sycamore Partners has agreed to take Chico's FAS private for $1 billion in cash. The clothing retailer owns women's clothing brands Chico's, White House Black Market and Soma.

Dynasty Equity has purchased a minority stake in Liverpool Football Club. The transaction cost at least $100 million, the Financial Times reported.

Qualium Investissement has led a €90 million investment in French data processing company ChapsVision, with participation from Geneo, Tikehau Capital and Bpifrance.

CapVest Partners-backed Second Nature Brands has agreed to acquire fruit and nut mix brand Sahale Snacks from The JM Smucker Co. for roughly $34 million.

Susquehanna Private Capital has invested in environmental, health and safety management solutions provider US Compliance.

BGF has opposed Archimed's takeover offer for UK-listed Instem Life Science. BGF is the company's second-largest shareholder.

Portfolio Companies

SoftBank is in advanced talks to invest more than $1 billion in OpenAI's plans to launch an AI-powered hardware device in collaboration with former Apple Chief Design Officer Jony Ive, the Financial Times reported.

Exit & IPOs

EIG-backed MidOcean Energy has agreed to sell a minority stake in its business to Saudi Aramco for $500 million. MidOcean previously agreed to acquire stakes in liquefied natural gas businesses in Australia.

UPS has agreed to acquire MNX Global Logistics, which specializes in medical, time-sensitive and temperature-controlled shipping and logistics, from Quad-C Management.

Fundraising

Temasek-backed True Light Capital has closed its China-focused True Light Fund I on $3.3 billion.

Varde Partners has raised almost $1.5 billion for The Varde Asset Lending Fund II and related investment vehicles.

TXV Partners is raising its latest fund, which will invest in late-stage startups, sports teams and other sports industry-related businesses, with a target of $500 million, The Wall Street Journal reported.

DCVC is raising for a $400 million DCVC Bio III, according to a regulatory filing.

Early-stage venture firm Mercury Fund has raised $160 million for its Fund V.

VC firm Redstone has launched a 50 million Swiss franc (around $54.6 million) fund targeting early-stage quantum technology startups.

FemHealth Ventures, a new women's health-focused firm, has raised $32 million for its debut fund, The Wall Street Journal reported.

Investors

Placement agent MVision has entered administration, Private Equity International reported. The firm recently ceased operations in Hong Kong as part of a repositioning of its Asia-Pacific business.

Chart of the Day

Source: H1 2023 Global Real Estate Report

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PitchBook News - AI courts internet-of-things sector

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