Introducing our Japan Private Capital Breakdown

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The Daily Pitch: VC

December 6, 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 inaugural Japan Private Capital Breakdown covers the state of PE and VC in the world's third-largest economy

AllianceBernstein's new business will offer NAV loans to private market fund managers

Explore untapped opportunities in AI agents, code automation and ambient AI

We look at areas in which Europe's serial founders have an advantage over first-timers

Analysts zoom in on the French public and private markets

Today's Top Stories

Converging tailwinds set stage for Japan's private markets to expand

Our first-ever Japan Private Capital Breakdown, available in English and Japanese, unpacks the state of PE and VC dealmaking in the world's third-largest economy, where private markets may be entering a period of high growth.

The largely stable PE dealmaking environment got a boost this year with the nearly $15 billion buyout of Toshiba. PE firms have also been snapping up smaller companies whose aging leaders often lack succession plans.

VC has experienced steady growth in recent years, thanks in part to support from the government and large domestic corporations.

At a macro level, foreign investors may be attracted by the weakening yen and low interest rates—which make deals cheaper—as they look for opportunities in the Asia-Pacific region outside of China.

read the report

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AI agents poised to disrupt SaaS

Despite the VC downturn, generative AI remained strong in Q3, according to our latest Emerging Tech Research. While much of the excitement was fueled by Big Tech giants pouring billions into generative AI startups, PitchBook tracked 1,650 VC deals worth $21.1 billion in AI and machine learning in Q3.

And there are still untapped opportunities within the vertical, including coding automation and AI hardware.

read the preview

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A message from West Monroe

Maximizing acquisitions amid tech slowdown

Tech companies, once avid acquirers in times of easy financing, now face a significant M&A slowdown. Previously, their focus was swift expansion, but they're now challenged to extract value from recent investments and meet ambitious revenue targets. Complicating matters, they grapple with impediments like fragmented technology and suboptimal products when expanding into new markets.

Without a clear post-acquisition strategy, these firms risk falling short of synergies. This article explores common post-acquisition pitfalls and advocates for a product strategy framework to overcome them. These pitfalls include:

Neglecting market segment assessments
Underestimating customer migration complexities
Overlooking operational model shifts
Underestimating the intricacies of migrating customer data

Read more for deeper dive into these challenges and practical solutions.

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AllianceBernstein launches NAV lending initiative

(Luis Alvarez/Getty Images)

AllianceBernstein has launched a new business focused on providing net asset value-backed loans to private market fund managers.

The initiative, which received a $500 million anchor investment from AllianceBernstein's majority owner, underscores investor interest in capitalizing on PE managers' surging demand for creative portfolio management tools.

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VC tops the table in France, with growth deals holding the line for PE

A dearth of large transactions pushed French PE deal value lower in Q3. The biggest three deals in Q3 were all PE growth investments, with the largest buyout trailing at just €100 million (about $107.9 million), according to our latest France Market Snapshot.

The picture is slightly better for VC in the country. Q3 deal value was broadly in line with Q2 when excluding one particularly large transaction: battery-maker Verkor's €1.5 billion round. Meanwhile, Paris has comfortably retained its title as Europe's second city, after London, in private-market activity metrics.

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How big is the advantage for Europe's repeat founders?

(AndreyPopov/Getty Images)

Raising VC funding as a European founder is particularly challenging at the moment as investors remain more risk-averse than in previous years.

In this market, do Europe's serial entrepreneurs have an advantage over first-time founders? We've analyzed VC dealmaking trends to find out.

see the data

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Since yesterday, the PitchBook Platform added:

1769

People

567

Companies

29

Funds

See what our data software can do

The Daily Benchmark:
2017 Vintage North American PE Funds

Median IRR

19.37%

Top Quartile IRR

28.43%

0.49x

Median DPI

Select top performers

Spectrum Discretionary Overage Program

SSC Partners Cantium

Great Hill Equity Partners VI

*IRR: net of fees

93 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

A message from COMPLY

Are new SEC, FINRA and DOL rules impacting private investment strategies?

In 2022, PE deals with IA and Broker-Dealer involvement broke records, with $61.8 billion valued across 210 deals. That same year, firms contended with the compliance date of the SEC's New Marketing Rule.

The takeaway: Heightened pressure from increased regulatory activity has culminated in shifting M&A strategies.

During this live webinar, COMPLY and PitchBook experts will analyze market trend data, overlaying key regulatory knowledge to assess the impact of increased regulatory activity on M&A strategy.

Join the webinar Tuesday, Dec. 12 at 2 p.m. ET to learn more about:

What private investment trends reveal about industry dynamics
The implications of private investments on firms' compliance practices
An analysis of macroeconomic conditions related to regulatory schema

Register here

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People

Warburg Pincus named Vishal Mahadevia as head of Asia private equity. Narendra Ostawal will take over Mahadevia's previous role as the firm's lead of India PE.

VC Deals

French generative AI startup Mistral AI is finalizing a €450 million round led by Andreessen Horowitz at a $2 billion valuation, Bloomberg reported.

Boston-based Odyssey Therapeutics has raised a $101 million Series C led by Ascenta Capital for its precision medicine.

Pittsburgh-based defense-tech company Gecko Robotics has extended its Series C with $100 million from investors including US Innovative Technology Fund and Founders Fund.

Fortellix, a self-driving safety startup, has raised an $85 million Series C led by 83North.

Fantuan has raised a $40 million Series C led by Celtic House Asia. The Vancouver-based company has a delivery platform for authentic Chinese food.

Eligo Bioscience, a Paris-based gene-editing startup, has closed a $30 million Series B led by Sanofi Ventures.

EnCharge, an AI chips startup, has raised $22.6 million with participation from the VentureTech Alliance, ACVC Partners and Silicon Catalyst Angels.

France's Wakeo, which provides a transport intelligence platform, has secured €18 million led by Statkraft Ventures.

London-based Hurr has received $10 million from investors including Praetura Ventures, D4 Ventures and Octopus Ventures for its fashion rental platform.

Sunsave has raised a £5.4 million seed round led by Norrsken VC. The UK-based startup offers solar-energy setups via a subscription service.

PE Deals

The shareholders of Australia-based Origin Energy rejected a proposed $11 billion acquisition by Brookfield Asset Management and EIG-backed MidOcean Energy, which was announced in November 2022.

UK-based travel bookings company Travelport Worldwide has raised $570 million. Travelport's investors include Elliott Investment Management, Davidson Kempner Capital Management, Canyon Partners and Siris Capital.

Three Hills Capital Partners made a follow-on investment in French budget hotel group Castellet Hospitality of around €30 million, increasing its total funding for the company to over €90 million.

Blackstone acquired Power Grid Components, an Alabama-based manufacturer that supplies components to electric utilities, from Shorehill Capital.

Hudson Hill Capital acquired a majority stake in Dallas-based MarketTime, which offers a software platform to facilitates wholesale retail commerce.

Impel Capital made an investment in Texas-based IT and managed services specialist Sky Communications.

Exits & IPOs

Equistone Partners Europe sold French tourism group Karavel to ADNEC Group.

Fundraising

Fund-of-funds Horsley Bridge Partners closed a $1.45 billion venture vehicle, according to a regulatory filing.

Summa Equity closed a €550 million continuation fund for NG Group, a Norwegian environmental services company.

Munich-based Vanagon Ventures held a first close of its debut €30 million fund. The vehicle will target early-stage investments in B2B climate software startups.

Investors

Swedish pension fund AP3 and Wafra formed a PE co-investment platform called Covalent, which has $1.05 billion to invest in mid-market buyouts and growth deals in Europe and North America.

Boston-based OpenView Venture Partners, a VC firm that closed its seventh flagship fund on $570 million in March, is winding down its operations and will not make new investments, The Information reported.

Chart of the Day

Source: Q3 2023 Global Private Market Fundraising Report

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Introducing our Japan Private Capital Breakdown

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