PitchBook News - Generative AI dealmaking ebbs

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The Daily Pitch: VC

October 9, 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:

After capturing the attention of VCs and the public, momentum for generative AI is waning

Our Q3 valuations data for public companies in the healthcare services and gaming sectors

Another executive has left crypto investor Pantera Capital

Today's Top Stories

Generating less momentum? Generative AI deal count dips in Q3

(Marina Inoue/Getty Images)

Generative AI continues to elicit considerable investment from VCs and tech giants, but there are signs that enthusiasm is waning. Deal count declined in the most recent quarter and deal value was on a similar track before Amazon's mammoth commitment of up to $4 billion to Anthropic last month.

Investors acknowledge the technology's promise but say they are reassessing the utility of generative AI applications and threats posed by larger players.

Recommended Reads

AI chatbots threaten their own best sources of data. They will have to find new kinds of knowledge. [The New Yorker]

How a Washington state startup is destroying "forever chemicals." [GeekWire]

Of Europe's 20 most valuable unicorns, only four have confirmed they're profitable. [Sifted]

Since yesterday, the PitchBook Platform added:

26

People

1

Companies

See what our data software can do

The Daily Benchmark:
2013 Vintage Global VC Funds with more than $250M

Median IRR

20.00%

Top Quartile IRR

25.24%

1.24x

Median DPI

Select top performers

OrbiMed Private Investments V

Frazier Healthcare VII

Social Capital Partnership II

*IRR: net of fees

12 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

VC Deals

Washington-based Stoke raised a $100 million Series B led by Industrious Ventures for its reusable space rockets.

San Francisco-based robotaxi startup Glydways has raised a $56 million Series B led by New Science Ventures, The Information reported.

Observe, a Dallas-based observability B2B data storage startup, has raised a $50 million Series A3 led by Sutter Hill Ventures.

Bay Area-based Gradient has raised $10 million in seed funding led by Wing VC for its AI development platform.

Purpose raised €3.3 million in a pre-seed round led by Speedinvest and Atlantic Labs. The Berlin-based company provides an ESG metrics platform for the property sector.

France's Scnd raised €4 million from investors including 42Cap and Partech. Scnd develops SaaS solutions for service providers.

German medtech startup Inovedis raised a $4 million Series A from investors including High-Tech Gründerfonds, MBG Baden-Württemberg and Volksbank Albstadt ChancenKapital.

Zurich cloud computing startup Helio raised €4.9 million in seed funding led by QBIT Capital.

PE Deals

The Blackstone Real Estate Income Trust is in talks to sell a 20% stake of Phoenix Tower International, a Florida-based telecom tower operator, for about $1.3 billion to a consortium that includes BlackRock and Grain Management, Bloomberg reported.

The Abu Dhabi Investment Authority has agreed to acquire a 0.59% stake in India's Reliance Retail for 49.6 billion rupees (about $596 million).

Aurelius Group, Elliott Management and Epiris are looking to acquire beauty retailer The Body Shop but are concerned with the £400 million to £500 million valuation set by owner Natura, RetailWeek reported.

Shareholders in music rights holder Hipgnosis could block its sale of a portfolio to Blackstone—which also backs the company—for $440 million, the Financial Times reported.

Ash Investment Partners has invested in ImagineX, an Atlanta-based digital services consultant that specializes in software development and cybersecurity.

Portfolio Companies

VC-backed crypto company Yuga Labs announced a restructuring that will result in layoffs.

Exit & IPOs

Triton is considering selling All4Labels Global Packaging Group, a German self-adhesive label manufacturer, at a valuation of about €2 billion, Bloomberg reported.

Triton-backed German gearbox supplier Renk has canceled its planned IPO, citing market conditions.

EQT plans to sell German shopping mall Allee Center, CoStar reported.

Fundraising

Digital health-focused firm 7wireVentures launched a $217 million Growth & Opportunity Fund that will target later-stage startups.

Investors

Dutch pension fund KPN is looking to allocate up to 7% of its €10 billion in AUM to infrastructure, corporate and real estate debt by 2026, Investments & Pensions Europe reported.

Chart of the Day

"Banks are retreating from commercial real estate lending in the current climate. ... As bank lending has dried up, there are some private players that are stepping in to fill the void by providing debt in real estate transactions. Through the first half of the year, nine real estate debt funds raised $8.7 billion, representing 13.0% of overall real estate capital raised. Debt funds can capitalize on floating rates and lend to borrowers on incredibly attractive terms, generating high levels of income on lower-risk assets."

Source: H1 2023 Global Real Estate Report

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PitchBook News - Generative AI dealmaking ebbs

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