PitchBook News - VC looks for sunnier skies

Female founders' strong finish to 2023; semiconductors ride a generative AI wave; auto commerce returns lead public mobility tech
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The Daily Pitch: VC
January 11, 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:
 
Today's Top Stories  
VC looks for sunnier skies amid the clouds
Venture capital has had a tough 12 months. But despite a $71.6 billion drop in funding for the asset class compared to 2022—more than $88 billion if you leave out OpenAI and Anthropic's behemoth rounds—sunnier skies may be ahead.

VC deal count was still higher in Q4 2023 than in any quarter in the pre-2020 days, while public markets finished up for the year, according to the latest PitchBook-NVCA Venture Monitor, sponsored by J.P. Morgan, Dentons and Deloitte.

On the one hand, the IPO backlog keeps lengthening. On the other, the market is awash with dry powder, and many expect that economic uncertainty will lessen, bringing the market back into a stable state.
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3 takeaways from VC funding for female founders
(Joey Schaffer/PitchBook News)
Female founders ended 2023 on a strong note as the year closed with the third-highest amount of venture capital raised for female-founded or co-founded startups on record, according to PitchBook's US VC Female Founders Dashboard.

Companies with at least one female founder raised about $32.7 billion in VC funding across 3,230 rounds in 2023, while startups with exclusively female founders garnered $2.8 billion over 867 deals. But a disparity exists, with more capital going to mixed-founder teams than those founded solely by women.
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Mood on healthcare PE deals muted at JP Morgan conference
(Christoph Burgstedt/Getty Images)
PitchBook lead healthcare analyst Rebecca Springer reports that the mood around private equity deals has been muted at JP Morgan's healthcare conference.

Our analysts have predicted that PE healthcare dealmaking will not return in earnest until the Federal Reserve materially cuts rates. Cocktail-hour conversations support this thesis.

Although a few platform companies are being shopped, many are using the conference to test the waters with potential buyers, looking at a late 2024 or 2025 transaction. When larger deals do resume, platforms may trade at EBITDA multiples significantly below 2021 rates.

For a full recap of the key announcements and themes at this week’s conference, register for our recap webinar at 11 a.m. PST/2 p.m. EST today.
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Semiconductor companies taking generative AI cake
As the use of generative AI rippled out in 2023, infrastructure companies outperformed their peers in the public AI and machine learning cohort. AI semiconductor companies, especially, benefited from the new trend, with median share price increases of 71% for the year.

Our Q4 2023 Artificial Intelligence & Machine Learning Public Comp Sheet and Valuation Guide tracks stock performance, valuations, market caps, revenue and EBITDA data for key publicly traded companies.
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Auto commerce's stellar returns lead for public mobility tech companies
Performance of public companies in the electric vehicle industry slowed overall in Q4, but fortunes differed across other segments of the mobility tech sector. In total for 2023, Carvana's shares rocketed up 1,090%, leading the way for overall auto commerce returns to shoot up 149%.

Our Q4 2023 Mobility Tech Public Comp Sheet and Valuation Guide tracks stock performance, valuations and market caps—as well as forecasts for revenue, EBITDA and earnings per share—for key publicly traded companies.
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Creativity will be key to PE's success in 2024
(Joey Schaffer/PitchBook News)
Ingenuity and adaptability have always been in private equity's DNA. But 2023 was a year when the paradigm shifted dramatically, and PE had little option but to change up its approach.

The coming year is likely to bring greater stability, but there is little indication that dramatic changes in market conditions are in the offing. Creative approaches will be key.

So which of 2023's nascent trends should we watch this year? Secondaries, NAV financing, growth investing and carveout deals are just a few things to keep an eye on.
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Since yesterday, the PitchBook Platform added:
12
VC valuations
2185
People
832
Companies
29
Funds
See what our data software can do
 
The Daily Benchmark:
2016 Vintage US PE Funds
Median IRR
21.53%
Top Quartile IRR
27.33%
0.91x
Median DPI
Select top performers
Francisco Agility Fund
Renovus Capital Partners II
Gemspring Capital Fund I
*IRR: net of fees
88 Funds in Benchmark »
Check out the latest version of PitchBook Benchmarks
 
VC Deals  
Amsterdam-based online grocer Picnic has raised €355 million from investors including The Bill and Melinda Gates Foundation and Edeka.

Ji Xing Pharmaceuticals, a Shanghai-based clinical-stage biotech company, has raised $162 million from Bayer, which invested $35 million, and RTW Investments, which invested $127 million.

Digital blogging and social media company Quora has raised $75 million from Andreessen Horowitz to accelerate its AI chatbot development.

Nalu Medical, a medtech device company for chronic neuropathic pain, has raised a $65 million Series E led by Novo Holdings.

French AI-powered image editing company PhotoRoom is nearing a deal for between $50 and $60 million led by Balderton Capital, TechCrunch reported.

Milan-based Contents.com has secured an $18 million Series B led by Alkemia Capital and Thomson Reuters Ventures for its AI content generation platform.

Sqim, an Italian developer of natural materials using mycelium, has secured €11 million from investors including CDP Venture Capital, Kering Ventures, and ECBF VC.

Berlin-based micromobility startup Tier has agreed to combine operations with Amsterdam-based peer Dott. The deal is led by Tier backer Mubadala and Dott investor Sofina, which will invest €60 million in the joint business.
 
PitchBook webinar: J.P. Morgan Healthcare 2024 recap
Join PitchBook's healthcare analyst team live in San Francisco for a recap of the J.P. Morgan Healthcare Conference and a look at what's in store for the year ahead. Our team will dive deep into the most important takeaways from private company presentations, conference floor discussions, and the industry context behind the conference's biggest press releases. Topics include:
  • Private companies to watch in 2024.

  • Can't-miss announcements and what they mean for the healthcare private markets ecosystem.

  • Key emerging trends across the industry, from services to digital health to biopharma.
Register now to secure your spot.
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PE Deals  
CVC Capital Partners is nearing a deal to acquire German vitamin and supplement company Sunday Natural, valuing it at around €900 million, Bloomberg reported.

Battery storage developer NineDot Energy secured a $225 million commitment from Manulife Investment Management and existing investor The Carlyle Group. Manulife committed $135 million and acquired an equity interest in the company.

Strategic Value Partners acquired the remaining 40% of fintech specialist IPC Systems that it did not already own.

Aquiline Capital Partners made a growth investment in LeaseCrunch, a North American lease accounting and management software company.

TA Associates made a strategic investment in CSI, a financial software and technology company.

Ambienta acquired The Rent Company. The Netherlands-based business loans out laptops and other devices to students.
 
Exits & IPOs  
UK-based firm Bluegem sold Dr. Vranjes Firenze, a home fragrance brand, to L'Occitane Group.
 
Fundraising  
EIB Global committed $30 million to Seedstars Africa Ventures' debut fund. The vehicle has a target of between $80 million and $100 million and will be used for early-stage investments.
 
Chart of the Day  
"We believe that a substantial rate-cutting cycle will be the key impetus for the resumption of platform trades. Valuations have already come down a few turns (if not more) in most healthcare services categories, and sellers need to believe that they are exiting into the best market they can reasonably hope for."

Source: PitchBook's 2024 Healthcare Outlook
 
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