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The Daily Pitch: VC

December 12, 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 latest analyst note covers the potential of the carbon capture space

Andreessen Horowitz's AI strategy touches every part of the value chain

As private credit lenders get back in the deal game, competition has changed the playing field

Europe's female founders are ending 2023 with a flourish

Payments startup SumUp secures a big cash infusion

Today's Top Stories

Carbon utilization as a sustainable investing opportunity

As carbon capture gains traction in the climate-tech world, the question of how captured carbon dioxide can be re-used is more relevant than ever. Carbon utilization technology, which serves as the primary alternative in the industry to carbon sequestration, has the potential to create new and valuable products, from cement to fuel, using captured CO2.

Our latest analyst note examines the potential positive environmental impact and returns in this space. It also covers how factors such as the proliferation of government funding and corporate sustainability commitments may be giving carbon utilizers an edge.

read it now

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Andreessen Horowitz's $415M Mistral investment rounds out AI strategy

Andreessen Horowitz co-founder Marc Andreessen
(Chip Somodevilla/Getty Images)

Andreessen Horowitz has a new motto: "AI will save the world." With the firm leading a €385 million (roughly $415 million) Series A for open-source large language model developer Mistral AI, it is rounding out its comprehensive strategy to cover every part of the AI value chain.

Explore a16z's AI portfolio and what it means for the generative AI space as a whole.

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A message from Litera

2023 in review

Global M&A is set for a significant decline in 2023 after two historically high years of activity. Inflationary pressures, increasing interest rates, and the prospect of a recession all loom large in today's landscape.

Drawing on PitchBook data, Litera has released its 2023 Year-end Global M&A Activity Report, with commentary by Frank Aquila, Senior M&A Partner at Sullivan & Cromwell. While M&A has had an off year, there was some notable momentum at the high end of the market. Microsoft's $75 billion acquisition of Activision was finalized in October, Chevron and ExxonMobil both signed acquisition agreements valued over $50 billion each, and there are rumors that Cigna and Humana will merge. Massive acquisitions in three distinct sectors could bode well for the overall M&A market in 2024.

To download the report, click here.

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Q4 looks to be strongest of the year for Europe's female founders

Europe's female founders are ending 2023 with a flourish, with Q4 on track to account for the most VC investment of any quarter this year, according to our European VC female founders dashboard.

European startups with at least one female founder have garnered €2.4 billion over 289 deals, already matching Q1 for most capital raised with one month left to go in the quarter.

Notable deals in Q4 include a roughly €324 million Series E for fresh dog food specialist Butternut Box and a €129 million Series A for biotech company VectorY Therapeutics.

explore the dashboard

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What fintech slowdown? SumUp secures $306.5M round

(SOPA Images/Getty Images)

London-based point-of-sale payments startup SumUp has secured a $306.5 million round led by Sixth Street Growth.

This latest infusion, which comes despite a slowdown in European fintech financing, is the fourth-largest in the sector this year.

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Private credit lenders yield some ground as competition increases

(Le Club Symphonie/Getty Images)

Private credit lenders who sat on the sidelines earlier this year are returning to the deal market, as they project more confidence about the prospects for the economy and seek to deploy their dry powder.

But as the competition among lenders has accelerated, spreads and upfront fees on recently issued private credit loans have narrowed, market participants said.

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PE talent isn't going anywhere, for now

(Drew Sanders/PitchBook News)

Despite fundraising woes, private equity is managing to hold on to its talent—for the time being. While recruiters don't expect an impending flight from the industry, the persistence of fundraising headwinds could lead to a migration of talent away from underperforming firms.

Faced with a challenging year in dealmaking, fundraising and exits, PE executive search firms have identified a slowdown in hiring in 2023, leaving a large pool of qualified candidates.

The deceleration in hiring is a symptom of the troubling fundraising environment in the private markets. From H1 2022 to H1 2023, PE and VC fundraising fell 16.6% and 47%, respectively—a product of a restricted LP capital supply, elevated interest rates and a pullback in bank lending.

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A message from Apex Group

The Growth and Evolution of Private Markets—Research Report

The finance industry is undergoing a significant transformation. Several major trends are reshaping the space and opening new possibilities for investors and companies.

Get ahead of the trends with Apex's latest insights report, supported by PitchBook data. Apex experts explore how these new dynamics will impact investors and the market, giving you the facts, and insights, you need to navigate challenges and opportunities for your firm.

What insights can you expect from the report?

Exploring fundraising challenges
Ways to unlock opportunities
Trends in changing investor bases
ESG, fintech and new asset classes
Practical takeaways for fund management
Data insights from the numbers

To find out more, download the Apex Research report on the Apex Group website here.

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VC Deals

Carro, which operates an automotive marketplace, is in talks to raise over $100 million ahead of a US IPO in the next 18 months, DealStreetAsia reported.

Satellite connectivity and edge computing provider Armada Systems emerged from stealth with $55 million in seed and Series A funding. Investors include Founders Fund, Lux Capital, Shield Capital and 8090 Industries.

London-based GFO-X, a trading venue for digital asset derivatives, raised a $30 million Series B led by M&G Investments.

Medefy Health raised a $10 million Series A led by Mercury Fund for its mobile-first healthcare benefits platform.

Mulberri, the developer of an embedded insurance platform for small and medium-sized businesses, secured $6.75 million in a seed round led by Eos Venture Partners, Axios reported.

Helicity Space, a commercial space company using fusion power, raised $5 million in a seed round with participation from investors including Airbus Ventures, Urania Ventures and Gaingels.

Montamo, a Berlin-based startup that offers training in construction skills for the green energy sector, raised €2.1 million in a pre-seed round led by Project A Ventures.

Paris' Kleep raised €1.8 million from investors including Campus Fund. Kleep's product discovery platform helps ecommerce fashion brands reduce size-related returns.

Copenhagen-based farming robotics startup Seasony secured €1.5 million in a round led by North Ventures and the Export and Investment Fund of Denmark.

PE Deals

Arkhouse and Brigade Capital Management made a $5.8 billion offer for department store chain Macy's, The Wall Street Journal reported.

Investcorp acquired 50% of New York-based Corsair Capital's infrastructure investing division, which has $4.8 billion in AUM.

TPG is in talks to acquire UK-based Outcomes First Group for about $1 billion—with Investcorp taking a stake—from Stirling Square. Outcomes First offers specialist education for children, including schools under the Acorn Education brand.

General Atlantic and Stone Point Capital proposed buying out Nashville-based background check provider HireRight for $12.75 per share.

Blue Sage Capital acquired Pennsylvania's Geo-Solutions, which offers geotechnical and environmental remediation services to industrial end-markets.

Abris Capital Partners agreed to sell its stake in Velvet Care, a Poland-based manufacturer of hygiene paper products, to Partners Group.

Permira agreed to buy Frankfurt-based GGW Group, which offers an insurance brokerage platform, from Hg.

Cinven agreed to sell its stake in UK independent specialty insurance and reinsurance broker Miller to Singapore's sovereign wealth fund GIC. Cinven and GIC bought Miller from Willis Towers Watson in 2021.

Portfolio Companies

VC-backed Docker acquired AtomicJar, an early-stage startup developing open-source software testing tools.

Exits & IPOs

Occidental Petroleum agreed to acquire Lime Rock Resources-backed CrownRock, an oil and gas exploration and production company operating in the Permian Basin, for $10.8 billion.

Fundraising

BlackRock held a €774 million first close of its Europe Property Fund VI. The vehicle will focus on assets related to demographic shifts, digital disruption and decarbonization.

AnaCap closed a continuation fund on around €300 million. The vehicle will reinvest in German insurance broker MRH Trowe and tax services software provider Gestión Tributaria Territorial, both of which AnaCap partially exited earlier this year.

Chart of the Day

Source: 2023 DACH Private Capital Breakdown

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PitchBook News - What to do with CO2

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