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The Daily Pitch: VC

November 1, 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:

Our Healthcare Services Overview gets to the heart of PE healthcare investing

The head of Microsoft's venture arm weighs in on its new strategic focus and OpenAI

Thinking about raising a debut VC fund? We gathered tips from emerging managers

Climate-tech startups have defied expectations of slow growth, according to our Q3 2023 Carbon & Emissions Tech Report

These are some of the ingredients to help a VC hub thrive

Today's Top Stories

Green mining clinches VC deal record

Startups focusing on green mining and energy-efficient buildings both set records in the third quarter for VC deal value, at nearly $395 million and $639 million, respectively. Across deal stages, climate-tech startups have bucked trends and defied expectations of slow growth, according to our Q3 2023 Carbon & Emissions Tech Report.

Dive into the blockbuster funding rounds like H2 Green Steel ($1.6B) and Redwood Materials ($997M), which defined the quarter and will help to scale up new production facilities. The report also covers emerging technologies being piloted in direct air capture and mining decarbonization.

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The building blocks of PE healthcare investment

Private equity's influence on the practice of medicine is undeniable: Roughly 10% of all PE deals each year take place in healthcare services.

But the strategy behind creating value in ambulatory surgical centers can differ vastly from—for example—home-based care. And both of these are separate from the heart of healthcare services investing: the physician practice management company roll-up.

Our Healthcare Services Overview provides the essentials for understanding investment drivers for these and other businesses, with five new categories in the taxonomy update. It's the key to unlocking the most value from our quarterly Healthcare Services reports.

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A message from the American Investment Council

The critical role PE plays in America's energy transition

Private equity has a long history in the energy sector, and today's investors are at the forefront of America's energy transition. Sponsors are investing in wind and solar farms at record levels—but beyond that, PE firms can help all their portfolio companies decarbonize. In other cases, sponsors can spur green-to-brown initiatives and upend traditional playbooks for how energy is produced in the US.

In conjunction with PitchBook, the American Investment Council has released The Critical Role Private Equity Plays in America's Energy Transition. Beyond the data, PE can help improve the world by implementing environmental initiatives for several portfolio companies at the same time.

To download the report and learn more, click here

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How-to guide: Raising your first VC fund

(Alan Schein/Getty Images)

VC fundraising is only getting more challenging during this market downturn, but it's the first-time managers facing the biggest hurdles.

So, what's a new GP to do? We spoke to several emerging VCs with recent experience to get their pro tips for raising an inaugural fund.

Recommended Reads

The money has stopped flowing in commercial real estate. The decline in construction loans has been particularly severe. [The Wall Street Journal]

America's economy is booming. Why aren't its bosses happier? [The Economist]

Here's the truth behind the biggest (and dumbest) battery myths. [Wired]

Since yesterday, the PitchBook Platform added:

9

VC valuations

2393

People

701

Companies

29

Funds

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The Daily Benchmark:
2013 Vintage Global Funds-of-Funds

Median IRR

16.10%

Top Quartile IRR

21.72%

1.04x

Median DPI

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Glouston Ohio Midwest Fund II

Bay Hills Emerging Partners III

Ironsides Partnership Fund III

*IRR: net of fees

53 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

VC Deals

Defense tech startup Shield AI raised a $200 million Series F led by US Innovative Technology Fund and Riot Ventures.

SkyCell, a Zurich-based provider of smart temperature-controlled shipping containers for pharmaceuticals, raised $57 million from M&G Investments.

Charlie, a banking services company for retirees, raised a $23 million Series A led by TTV Capital.

Wirepas, a Finnish developer of low-cost IoT networks, secured $22 million in a round led by Highland Europe.

Connectly, which offers an AI-powered platform for customer conversation, raised a $7.85 million Series A led by Volpe Capital.

Tvarit, a Frankfurt-based startup developing technology to eliminate waste from metal manufacturing, closed a €6.5 million Series A led by Momenta and Futury Capital.

PE Deals

KKR completed its acquisition of US-based publishing company Simon & Schuster for $1.62 billion from media conglomerate Paramount Global.

PE firm Rhone Capital has taken a 40% stake in Orkla Food Ingredients, a Norwegian supplier of bakery and ice cream ingredients, for an implied enterprise value of 15.5 billion Norwegian kroner (around $1.3 billion).

Blackstone and Vista Equity Partners agreed to acquire Salt Lake City-based Energy Exemplar, an energy market simulation software, from Riverside Company. The deal is worth at least $1 billion, Reuters reported.

Inflexion and Endicott Capital plan to stake UK-based law firm Allen & Overy's legal tech business, Aosphere, valuing the company at over £200 million, the Financial Times reported.

Morgan Stanley invested in UK-based Huel, a producer of plant-based nutritional powders and meal-replacement shakes that has raised $82.5 million in VC funding, The Wall Street Journal reported.

The Carlyle Group said it has created a Milan-based platform of global irrigation providers called Farmfront Group, which comprises earlier acquisitions of Ocmis Group and Irrimec, both based in Italy, and RKD, based in Spain.

DIF Capital Partners and EDF Invest agreed to acquire Fjord1, Norway's largest ferry operator, from Vision Ridge Partners and Havila Holding.

Exits & IPOs

Palo Alto Networks has acquired cybersecurity startup Dig. The deal valued the company at around $400 million, TechCrunch reported.

Fundraising

London-based VC firm Flashpoint has partnered with growth investor Roman Ivaniuk to launch a joint fund targeting $150 million to make direct secondary investments in European growth-stage companies.

Chart of the Day

Source: PitchBook's Q3 2023 European Venture Report

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PitchBook News - Climate-tech startups buck trends

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