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The Research Pitch |
December 9, 2023 
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Presented by Masterworks |
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Impact investing performance: Our latest analyst note on the oft-misunderstood strategy delves deeper into Impact investing than ever, breaking fund data down by category and exploring returns. Read it here.
Global Market Snapshot: How were November returns? Our report features the latest trends in the equity, debt, and commodities markets, tracking performance across a variety of indexes and sectors. Download it here.
Insurtech's bump: The insurtech vertical saw a surge in VC funding in Q3, according to our latest research, and PE investors are getting more involved in the space. For a preview of our premium report, click here. |
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A message from Masterworks
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Picasso’s $139 million sale reveals unexpected investment opportunity
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Just last month, an iconic Picasso painting shattered expectations when it sold for $139 million at auction. Impressive, considering it was purchased for around $1 million in the late 1960’s.
But there’s a surprising group of investors also celebrating this sale: 61,000 everyday users of one investment platform.
Why? Because that platform, called Masterworks, enables anyone to invest in blue-chip paintings by artists like Picasso and Banksy for just a fraction of the cost. This way, not only the billionaires of the world can benefit from the art market. To date, Masterworks investors have enjoyed 16 sales out of its portfolio, each of them profitable.
Best of all, as a special partner, PitchBook readers can skip the waitlist to join here.
Investing involves risk and past performance is not indicative of future returns. See important Reg A disclosures and aggregate advisory performance masterworks.com/cd. |
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Biopharma: Spearheading innovation in healthcare
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Biopharma stands at the forefront of healthcare innovation, shaping the future with its advanced drug developments.
From breakthroughs in gene and cell therapy to advancements in biologics, biopharma is revolutionizing treatment methods and patient care.
This week, we launched our flagship biopharma report. This quarterly publication delves deep into VC trends within the sector, highlighting over $18 billion invested across 634 transactions this year through Q3.
PitchBook clients can access the complete Biopharma Report, while non-clients can
preview key highlights.
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| PitchBook clients can access a full market map. |
The report also provides clients with differentiated tools to dissect the biopharma industry, segmenting data by both drug modality (e.g., biologics, gene therapy) and therapeutic focus (e.g., oncology, neurology).
This dual approach, complemented by an Excel tool accessible in our analyst workspace, enables precise identification of companies aligning with specific criteria, such as those utilizing gene therapy in cancer treatment.
Key takeaways from the report:
1. Deal Activity and Exit Trends: Although we have seen a moderate rise in deal activity over 2024, with cumulative deal volume projected to surpass $24 billion by year-end, exit activity (acquisitions and IPOs) is diminishing, moving away from the heightened levels seen during 2020-2022.
2. Shift Toward Pre-pandemic Investment Patterns: The sector is reverting to pre-pandemic investment norms, signifying a strategic shift toward fewer, yet larger and more robust investments. This reflects a cautious and meticulous approach amidst economic downturns and evolving market scenarios.
3. Strategic Focus: Investors are exhibiting strategic patience, centering on long-term results and larger ventures. The burgeoning potential of the obesity drug market is reigniting interest in biology-based investments. Concurrently, there is a palpable interest in pioneering platforms capable of introducing new modalities and uncovering novel pathways.
For more on these and other key trends, download a free preview of our
Biopharma Report.
Please contact us with any queries or for further information on the report's data and insights.
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Fossil fuels and climate adaptation—9 days into COP28
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Over a week into COP28, the event has generated its share of positives—though there have also been some controversies.
In addition to the record attendance, there has also been record attendance from oil and gas delegates, which prompted concerns that the event would favor a fossil fuel agenda regardless of the optimal climate mitigation pathway.
Indeed, while the first week of the conference included significant support for decarbonization pledges, it contained little in the way of specific support for a phase-out or phase-down of fossil fuels, with oil and gas-producing countries continuing to position these fuels as critical elements of the green transition.
The last few days of the conference have focused more on this issue, with a draft agreement emerging Friday that includes several options for phasing out fossil fuel usage, varying in the strength of the commitment and possible exemptions—discussion is ongoing and will likely be seen as one of the most important outcomes of the conference.
Despite the aforementioned issues, there have been some significant positive climate outcomes in the form of a combination of pledges for UN climate funds, agreements from countries and companies to reduce emissions, and the establishment of new climate finance.
A key example of this new climate finance is the formation of the new $30 billion Alterra Fund, announced by the UAE and designed to support the energy transition, including $5 billion specifically to support developing countries.
Pledges from COP28 have been extremely wide-reaching, including substantial financial pledges for climate adaptation funds, funds to address loss and damage from climate change, and funds to support developing countries that face significant challenges from climate change.
A week into the conference, there is still a substantial amount of uncertainty over its outcomes. Even following the close of the event on December 12, it will take some time to see the extent to which certain pledges and agreements that have been made will translate to real-world action, rather than simply acting as a showcase for future ambitions.
To read my latest research, non-clients can access previews of our Clean Energy Report and Carbon & Emissions Tech Report.
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There are clear winners and losers in the competition to raise capital for investing in the private markets.
New capital for VC and real assets funds, for instance, plummeted in the 12 months ending in Q3.
In this less-than-generous environment, our latest Global Private Market Fundraising Report captures the story of which strategies are thriving and which are out of favor: |
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Our first-ever Japan Private Capital Breakdown, also available in 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 PE environment has been largely stable, as firms have been snapping up smaller companies whose aging leaders often lack succession plans.
VC has experienced steady growth, thanks in part to support from the government and domestic corporations: |
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Despite the VC downturn, generative AI interest has remained strong.
While much of the excitement was fueled by Big Tech pouring billions into generative AI, we 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, according to our new AI & Machine Learning Report, including coding automation and AI hardware: |
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Enterprise SaaS investment in Q3 was weaker than our analysts expected, hitting its lowest point in five years.
Amid that backdrop, our latest Enterprise SaaS Report explores the data and looks at an emerging area of interest for VC investors: composable applications.
This modular design allows products to be packaged as part of a customer-friendly suite of software solutions: |
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PitchBook at JPM 2024
Join us! Our healthcare analyst team will be on-site in San Francisco for the J.P. Morgan Healthcare Conference, which runs from Jan. 8-11.
For PitchBook clients, we're hosting an investor lounge on Jan. 9 where you can network, recharge, refuel, and connect with our analysts for in-person discussions around healthcare services and digital health. More details here.
We're also hosting a pair of webinars that are open to all:
Jan. 9: Though multiple biotech subindustries showed promise, setbacks have pushed VC toward new therapeutic applications. Our analyst Kazi Helal will discuss it all with a panel of VC biotech investors. Register here.
Jan. 11: Our team will recap JPM 2024 and share our most important takeaways from the private company-related presentations and discussions. Register here.
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Our insights and data featured in the press:
- An estimated 3,200 US VC-backed companies, which had raised a collective $27.2 billion, have gone out of business this year. [NYT]
- Mega-deals could be inflating overall AI funding figures [TechCrunch+]
- All parts of biopharma are feeling the impact of challenging VC fundraising conditions: "No one was spared. Everyone took a bit of a hit." [Fierce Biotech]
- VC data suggests biopharma investors are shifting toward fewer but bigger deals. [BioPharma Dive]
- Private debt fundraising hits a low, secondary markets rise in Q3. [Delano]
If you're a journalist interested in interviewing our analysts or requesting data, contact our PR team.
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More of our recent research (* - report preview):
Market updates
Thematic research
Industry & tech research
Credit research
Coming next week (subject to change)
- US PE Middle Market Report
- Real Assets Report
- Healthcare IT Report*
- Digital Health Report*
- Mobility Tech Report*
- NAV Facilities Primer
- Emerging Sustainable Investing Opportunities: Carbon Utilization
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Since yesterday, the PitchBook Platform added:
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1828
People
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476
Companies
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37
Funds
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