PitchBook News - Retail fintech holds its ground

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The Daily Pitch: VC

November 28, 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:

Q3 retail fintech deal value holds its own in 2023, despite a year-over-year drop

VCs find their checks stretching to larger stakes in a downturn silver lining

The VC slowdown in supply chain tech is especially apparent in last-mile delivery

Today's Top Stories

Retail fintech VC investment shows uptick in deal value

VC deal value for the retail fintech sector rose 53.2% in Q3 compared to Q2, with companies bringing in $2.4 billion across 149 deals, according to PitchBook's latest Emerging Tech Research. While that total is down 53.5% from Q3 2022, the sector is still holding its own. We've laid out the key trends, deals and emerging opportunities for investors to keep their eyes on.

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VCs chow down more equity in recent financing rounds

(Ivan Bajic/Getty Images)

One of the rare positives for VC investors in the current downturn is that they can acquire larger stakes in companies.

As valuations decrease, the same check size can now buy a bigger portion. For the most mature startups, the median share acquired in a round has grown from 11.3% in 2021 during the pandemic boom to 14.9% this year.

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VC Deals

ZeroAvia, a California-based hydrogen-electric aircraft developer, raised a $116 million Series C co-led by Airbus, Barclays Sustainable Impact Capital and Neom.

Neuralink, a company founded by Elon Musk that is developing a brain implant device, raised $43 million. The funding was led by Founders Fund, TechCrunch reported.

Cradle, a Dutch startup using generative AI to help scientists design and engineer proteins, closed a $24 million Series A led by Index Ventures.

Mozaic, a payments-splitting app for creators, raised a $20 million Series A from Volition Capital.

Milan-based WeRoad secured an €18 million Series B led by H14 for its adventure travel platform.

Relay, a last-mile ecommerce delivery startup, raised $10 million in seed funding led by Project A Ventures and Prologis Ventures.

Munich-based quantum sensing startup QuantumDiamonds secured a €7 million seed investment led by IQ Capital and Earlybird Venture Capital.

Scottish drug delivery device developer 1nhaler raised £2 million in a round led by Archangels.

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PE Deals

KKR acquired St. Louis-based Potter Global Technologies, a provider of fire safety and emergency communication products, from Gryphon Investors.

Siris agreed to acquire Texas-based mobile radio system provider BearCom from Bertram Capital.

Ardian agreed to acquire Reykjavik-based northern European data center company Verne Global from Digital 9 Infrastructure.

London-based Development Partners International and Verod Capital invested in Nigerian telecom infrastructure company Pan African Towers.

Lightyear Capital agreed to invest in BHMS Investments-backed Inszone Insurance Services, a full-service brokerage based in Sacramento.

Norwest Equity Partners acquired California-based United Sports Brands from Bregal Partners. USB's portfolio includes Shock Doctor, McDavid and more.

Paceline Equity Partners invested $50 million in Phoenix-based Kelso Industries, which installs and maintains HVAC and refrigeration systems. Kelso is also backed by Oxbow Equity Partners and Peterson Partners.

Godspeed Capital formed Crimson Phoenix, a digital, data and intelligence analysis and solutions platform designed to support the US Intelligence community's overseas missions.

Exits & IPOs

Chinese fast-fashion giant Shein filed confidentially for an IPO in the US that could happen in 2024, The Wall Street Journal reported. The Singapore-based online retailer was reportedly valued at $66 billion earlier this year.

LDC plans to auction UK online travel agency Iglu.com, seeking up to £100 million.

NVM Private Equity sold its stake in UK facilities services company Pareto FM to Pictet Alternative Advisors.

Veev, previously backed by VCs including Khosla Ventures, Brookfield Growth and Zeev Ventures, is shutting down, Calcalist reported. The company manufactures walls for modular-home construction.

Fundraising

Florida-based PE firm DigitalBridge, which invests in digital infrastructure, closed its first credit fund on $1.1 billion. The fund targets current income-based returns in first lien term loans, second lien term loans, and junior debt.

India's True North raised over 10 billion rupees (around $120 million) for its first private credit fund focused on mid-market companies.

YFM Equity Partners held the final close of its third buyout fund on £95.5 million.

Helsinki-based Failup Ventures held a €30 million first close of its new early-stage fund, which has a target of €50 million.

Investors

London-listed VC firm Molten Ventures agreed to buy UK-based early-stage investor Forward Partners at a £41.4 million valuation.

Chart of the Day

Source: Q3 2023 US VC Valuations Report

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PitchBook News - Retail fintech holds its ground

The Growth and Evolution of Private Markets—Research Report

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