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The Daily Pitch: VC

October 5, 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:

Sam Bankman-Fried's trial tests a common Silicon Valley defense for when things go wrong at a startup

GPs now find that more factors are at play when determining a fund's size

Tikehau Capital on the state of private debt

Understanding FedNow and the future of real-time payments

Billion-dollar valuations are hard to come by, but cleantech startups are claiming their fair share

Today's Top Stories

'Built on lies': Case against FTX founder Sam Bankman-Fried kicks off

(LEONARDO MUNOZ/Getty Images)

"One year ago, it looked like Sam Bankman-Fried was on top of the world."

And so began the prosecution's opening remarks Wednesday in its case against Sam Bankman-Fried, founder and former CEO of crypto exchange FTX, who faces decades in prison if he is convicted of crimes including wire fraud and conspiracy to commit money laundering.

At stake is not only Bankman-Fried's future but the public perception and credibility of the cryptocurrency industry and its players—including investors like Sequoia, SoftBank and Insight Partners, which were allegedly "lied to" by Bankman-Fried even as they propelled FTX to a $32 billion valuation before its collapse.

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For VC funds, bigger isn't always better

Landing on the right size for a new VC fund isn't like how it used to be, where GPs made the rounds with LPs and raised the most they could. Sizing nowadays involves using more predictive modeling tools, strategizing on portfolio diversification and weighing up due diligence, according to our latest analyst note. As deal sizes shrink, larger fund managers may even have to recalibrate their 2024 vintage funds downward.

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A message from Ontra

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Most private equity firms and their outside counsels rely on outdated and disorganized processes to manage legal entities for their funds and portfolio companies. The manual processes waste time and money, invite mistakes, and generally frustrate legal, investment, operations, and fundraising teams.

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Watch Ontra leaders discuss this new solution in their on-demand webinar, Introducing Ontra Atlas: Modern Entity Management Built for Private Equity. Learn how Ontra's purpose-built solution can address your pain points and save you time and money.

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Breaking down FedNow and its implications for US payments

An increasingly digital world demands faster payments, and money-movement infrastructure is catching up. In July, the US Federal Reserve launched its instant payment rail, dubbed FedNow, which operates 24/7, 365 days a year and facilitates transfers within seconds.

Will this new system supplement or supplant existing rails? Our analyst note breaks down FedNow and its implications for US payments, including key features and challenges, the significant opportunities it opens up for the fintech industry, and more.

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Meet the cleantech unicorns of 2023

Billion-dollar valuations are harder to come by this year, but startups focused on clean technology have proven surprisingly robust, according to our unicorn tracker. Of the 68 companies that have crossed this threshold this year, 14 are cleantech startups.

Some of the new unicorns to know: Newlight, the maker of a biodegradable plastic replacement, Chinese battery-maker Hithium, and German solar panel manufacturer Enpal.

Hithium became a unicorn this summer after a $629 million Series C and has the highest valuation of any cleantech startup minted in 2023 at a reported $4.2 billion.

explore the tracker

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Q&A: Golden age for private debt? Tikehau Capital co-founder thinks so

Tikehau Capital co-founder Mathieu Chabran
(PATRICK T. FALLON/Getty Images)

Many investors may be lamenting the end of cheap borrowing, but Tikehau Capital co-founder, Mathieu Chabran, is not one of them. He believes the more normal interest rate environment is a gift for serious investors.

While leveraged buyouts may have had their day for now, he suggests we are on the cusp of a golden age for private credit and private equity growth investment.

Recommended Reads

The vast majority of trade is conducted using paper documents, but fraud is fueling a clamor to digitize the system. [Bloomberg]

How Apollo Global Management led private equity's swift move into the insurance industry. [The New York Times]

VCs share 11 of Europe's drug discovery startups to watch. [Sifted]

Since yesterday, the PitchBook Platform added:

9

VC valuations

2415

People

627

Companies

33

Funds

See what our data software can do

The Daily Benchmark:
2014 Vintage Global Secondaries Funds

Median IRR

14.00%

Top Quartile IRR

18.49%

1.10x

Median DPI

Select top performers

LPE Astraeus

Glouston Private Equity Opportunities V

NewQuest Asia Fund II

*IRR: net of fees

18 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

VC Deals

Generative AI startup Anthropic is in discussions to raise $2 billion from existing investor Alphabet and others, The Information reported. Last month, Amazon took a $1.25 billion stake as part of a deal to invest up to $4 billion in the company.

Anduril, a defense-tech company, is in talks to raise up to $500 million at a valuation of up to $10 billion, Bloomberg reported.

Clearco, which provides capital to ecommerce companies, raised a $60 million Series D led by Inovia Capital and Founders Circle Capital as part of a larger recapitalization.

Swedish fintech startup Brite Payments has raised $60 million led by Dawn Capital.

Auto finance platform Lendbuzz raised $45 million in equity led by Group 1001, in addition to $300 million in the form of a forward flow facility.

Habyt, a platform for medium-term housing rentals, raised a €40 million Series C led by Korelya Capital and Deutsche Invest.

Microsure, a Dutch robot-assisted microsurgery specialist, has raised a €38 million Series B2 from investors including European Innovation Council, Kineo and Invest-NL.

US and Ireland-based drugmaker Shorla Oncology raised $35 million in Series B funding led by Kurma Partners.

FlexSea, a developer of seaweed-based bioplastics, has raised £3 million in a seed round led by Indico Capital Partners.

PE Deals

Partners Group has agreed to invest up to €1 billion in Exus, a third-party manager and developer of utility-scale renewable power projects in Europe and North America.

I Squared Capital will acquire up to 95% of Absolute Energy and invest up to €400 million in the investor's renewable power development plans in Italy.

Blackstone, EQT and THL aim to acquire German power electronics company EA Elektro-Automatik, Reuters reported.

Ascend Capital Partners has acquired a majority stake in Seoul Medical Group, an independent physician association that serves Korean-American patients in the US.

SK Capital Partners has purchased a controlling stake in Milestone Environmental Services, a waste management and carbon capture services company, from Amberjack Capital Partners.

Milton Street Capital has acquired Purge Rite, a provider of flushing and filtration services for HVAC and geothermal systems.

Genstar Capital-backed European financial services company Apex Group has completed its purchase of sector peer MJ Hudson's business outsourcing division.

Exit & IPOs

Identity management company Okta has acquired Andreessen Horowitz-backed password security startup Uno for an undisclosed amount, TechCrunch reported. The purchase will support the launch of a consumer-facing service called Okta Personal.

Fundraising

VC firm Greylock Partners has raised $1 billion of early-stage fund Greylock 17, which invests in AI-first companies at the pre-seed, seed and Series A stages.

Leonid Capital Partners has closed its first private credit special situations fund on roughly $240 million. The vehicle targets investments in US federal contractors focused on national security.

Hong Kong-based VC firm CMCC Global has raised a $100 million fund to invest in Web3 and blockchain fintech startups.

Investors

Motive Partners has partnered with Dutch bank ABN AMRO. Its Motive Ventures arm will manage the ABN AMRO Ventures Fund, and ABN AMRO will become a significant investor in Motive-managed funds.

Chart of the Day

Source: H1 2023 Private Debt Report

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PitchBook News - VC's stake in the FTX trial

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