3 VC sectors feel extra pressure for returns

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The Daily Pitch: VC

January 8, 2024

The Daily Pitch is powered by PitchBook’s industry-defining research and best-in-class data

In today's Daily Pitch, you'll find:

An IPO comeback would unlock liquidity in SaaS, AI and machine learning, and fintech

PE firms have turned to creative solutions to raise cash. Will it be more of the same in 2024?

Analysts cover the potential of the carbon capture space

Today's Top Stories

Unlocking liquidity in SaaS, AI, fintech

Public listings of VC-backed companies in the US earned investors only $28.2 billion in the first three quarters of 2023, down 94% from the same period in 2021. The resulting liquidity crunch has left the VC ecosystem in desperate need of an IPO comeback.

But some sectors, particularly those that received significant investment, are facing disproportionate pressure to provide returns. Our latest analyst note dives into three segments—SaaS, AI and machine learning, and fintech—poised to benefit from a reopened IPO window.

read the analyst note

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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 recent 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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A message from PitchBook

2024 PitchBook Media Kit released

Volatility is on the rise, everywhere. Dealmakers are looking for insights, services and tools to navigate challenging, complex market environments—and you can help them. By partnering with PitchBook Media, you can reach over two million industry professionals spanning the C-suite to flagship GP offices. Customize a unique array of options from the brand-new 2024 PitchBook Media Kit, including:

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Fundraising forecast: Will European PE have easier access to capital in 2024?

(Yinjia Pan/Getty Images)

Amid bumpy market conditions, many European PE funds needed to think creatively in 2023 to generate liquidity and raise capital.

While big-name firms continued to fundraise with relative ease, it was a very different story for the rest of the market. Will 2024 unlock more capital-raising opportunities or will PE firms need to continue to pursue alternative means of creating liquidity? We spoke to several market watchers to get their expert takes.

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The Daily Benchmark:
2019 Vintage Global Real Assets Funds

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13.56%

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The National Investment and Infrastructure Fund Limited, India's quasi-sovereign wealth fund, has chosen Sanjiv Aggarwal as its new CEO. He takes over from Rajiv Dhar, who had been interim CEO since his predecessor Sujoy Bose resigned in May.

VC Deals

Vico Therapeutics, a Dutch developer of therapies for severe neurological diseases, completed a $60 million Series B led by Ackermans & van Haaren.

Ohio-based Clarametyx Biosciences, a clinical-stage biologic therapies startup, raised a $33 million Series A led by the Ohio Innovation Fund.

Nabla raised $24 million led by Cathay Innovation. The Paris-based healthcare startup is developing AI-powered technology to automate clinician notetaking.

Digital media startup The Messenger is pitching investors in a bid to raise $20 million in VC funding, Axios reported.

KuCoin Labs invested in decentralized mixed reality infrastructure network DeMR.

PitchBook webinar: Biopharma VC in flux

Though multiple biotech sub-industries showed initial promise, setbacks have pushed VC capital toward new therapeutic applications. PitchBook senior analyst Kazi Helal, who covers biotech, and a panel of biotech VC investors will unpack findings from our newly launched biopharma Emerging Tech Research and discuss key themes expected for 2024.

Remaining opportunities for investors amid the craze for weight-loss drugs.

Why gene therapies have under-delivered—and where investors are looking next.

What it will take for AI to transform drug discovery.

Register now to secure your spot.

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PE Deals

M Group Services, a UK infrastructure services group backed by PAI Partners, acquired AgilityEco, a company specializing in fuel efficiency services.

Macquarie Capital is leading a consortium to take private Swedish IT firm Byggfakta for around $1 billion.

Elevance Health is acquiring Paragon Infusion, a Peak Rock Capital-backed drug infusion services provider, for over $1 billion, Axios reported.

Kenco, a logistics company backed by Pritzker Private Capital, acquired The Shippers Group, a Dallas-based third-party warehousing company.

Blackstone agreed to buy Sony Payment Services, the payment services unit of Sony Bank, a subsidiary of Japan's Sony. Sony Bank will continue to be a minority investor in the business.

Sporting Lisbon, a Portuguese football club, is weighing a sale of a minority stake in the club and has held talks with potential investors, Bloomberg reported.

Exits & IPOs

Finnish sporting equipment company Amer Sports filed to go public on the NYSE. A consortium including Anta Sports Products, Tencent and FountainVest Partners bought Amer in 2019 for €5.6 billion.

Indian payments startup MobiKwik is looking to raise around $84.2 million in an IPO. The company is backed by investors including Peak XV and the Abu Dhabi Investment Authority.

BGF sold its stake in Kick ICT, an IT managed service provider based in Scotland, to LDC. BGF first backed the company in 2021.

Fundraising

Banner Ridge Partners reached a final close of its fifth flagship secondaries fund on $2.15 billion.

Goldman Sachs Asset Management held a $650 million final close of West Street Life Sciences I.

Palo Alto-based life sciences investment firm TCG Crossover closed its second fund on $1 billion.

Early-stage firm Exponent Founders Capital emerged from stealth with $75 million from LPs, including $50 million for its first fund in November 2021, TechCrunch reported.

Chart of the Day

"Generative AI (GenAI) tools like ChatGPT have made it easier to provide personalized nutrition tools that are more engaging and valuable. The convergence of these trends has led to a growing market for personalized nutrition tools, which we expect to attract more investor activity and improve investor sentiment in the industry."

Source: 2024 Consumer Technology Outlook

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3 VC sectors feel extra pressure for returns

2024 PitchBook Media Kit released

Older messages

PE needs to get creative in 2024

A first look at 2023 VC data

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A preview of VC's final 2023 data

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