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The Daily Pitch: VC

January 25, 2024

Presented by Affinity

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

A handful of investors are turning overlooked VC-backed companies into PE-ready assets

Q&A: What factors might push secondaries to new highs in 2024?

Chinese semiconductor startups dominated VC funding in the space in 2023

An SEC vote to increase SPAC disclosures spurs debate over the future of blank-check companies

Our Q4 valuations data for public companies in the medtech and healthcare services sectors

Today's Top Stories

Q&A: How to make struggling startups 'PE ready'

(MirageC/Getty Images)

A lack of VC funding has led to a new wave of investors buying up startups that have been overlooked by venture firms.

We spoke to Resurge Growth Partners' Eyal Malinger about how the firm is taking a PE approach to turn around struggling startups.

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Jefferies dealmaker expects secondary market volume to hit record

(Art Wager/Getty Images)

We asked Todd Miller, a managing director and co-head of the private capital advisory group at Jefferies, for his insights on how secondaries may evolve this year.

Miller is optimistic that the asset class's market volume can achieve a record level, pointing to the huge pile of dry powder held by secondary investors, an expanding buyer universe, the growing liquidity needs from LPs and improvements in pricing levels.

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A message from Affinity

What's driving VC in 2024

It's not just Affinity—people are feeling optimistic about investing for the first time in a while. Read Affinity's 2024 Private Capital Investment Predictions Report to find out why 700+ investors anticipate higher deal volume and better network building in 2024. Download the report to find out what's possible for the coming year.

Learn more

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China outpaces US in backing chip startups

(Narumon Bowonkitwanchai/Getty Images)

China has taken the lead in funding semiconductor startups, according to PitchBook data, surpassing the US by a wide margin. Chinese startups attracted 75% of all VC investment into chip companies in 2023 as the US struggles to keep up, despite an AI-driven frenzy spurring more interest in chips.

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SEC votes to ramp up SPAC regulation

SEC chair Gary Gensler
(Drew Angerer/Getty Images)

In a vote yesterday, the SEC approved a set of sweeping rules and amendments that will increase disclosure requirements for SPAC sponsors in an effort to protect investors.

But some industry players believe the ruling will have a stifling effect on the already-shrunken pipeline of blank-check companies taking private firms to the public market.

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Medtech stocks rise as worries of weight loss drug disruption recede

Shares in medtech companies swooped up from a stretch of underperformance in recent years to notch low-double-digit performance in Q4. In recent months, investors have become less concerned about the effects of weight loss drugs, such as Ozempic and Wegovy, on surgical device and glucose monitor manufacturers. Instead, there may be positives in combining the drugs with these technologies.

Our Q4 2023 Medtech 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.

see the data

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Public value-based care companies struggle to lift off

Most segments of the public healthcare services sector underperformed major indexes in Q4, especially value-based care companies, many of which remain unprofitable. PE-backed healthcare provider groups have their eyes on KKR's BrightSpring after its January IPO, as public listings are not the typical exit strategy for this subsector but may become more common going forward.

Our Q4 2023 Healthcare Services 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.

see the data

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Since yesterday, the PitchBook Platform added:

15

VC valuations

2026

People

882

Companies

25

Funds

See what our data software can do

The Daily Benchmark:
2016 Vintage Global Funds-of-Funds

Median IRR

18.73%

Top Quartile IRR

22.08%

0.53x

Median DPI

Select top performers

Spectra Investments III

SVB Strategic Investors Fund VIII

Glouston Ohio Midwest Fund III

*IRR: net of fees

42 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

VC Deals

Arizona-based Sion Power, an electric vehicle battery startup, raised a $75 million Series A led by LG Technology Ventures.

CheckSammy, a cleantech startup based in Dallas, secured a $45 million investment led by I Squared Capital.

Germany's Kittl received a $36 million Series B led by IVP for its design platform.

Palo Alto-based Anomalo, an enterprise SaaS startup, raised a $33 million Series B led by SignalFire.

Latitude has raised $30 million from investors including Kima Ventures, Blast.Club and Credit Mutuel Innovation. The French company designs light space launchers.

Packmatic, a Berlin-based digital packing specialist, raised a €15 million Series A led by EQT Ventures.

Aniai, a New York-based startup creating robotic cooking equipment, raised a $12 million pre-Series A round led by InterVest.

IMU Biosciences, a London-based startup using AI to map the human immune system, secured an £11.5 million Series A led by Molten Ventures.

DigiTx Partners led a $10 million Series A for CardioSignal, a Finnish developer of technology for the early detection of heart disease.

London-based conversational AI company OpenDialog raised more than $8 million in a Series A led by AlbionVC.

Germany's Deeploi, which provides an IT management platform, raised €6 million in seed funding led by Atomico.

London-based Metris secured a £2 million pre-seed investment ked by Octopus Ventures and Aenu for its AI-powered solar energy platform.

Don't miss our upcoming webinar

Given the strong public equities rebound back to 2021 highs, investors are wondering when PE will demonstrate similar results. Returns were uncharacteristically low in 2023, and deal activity ran at half speed.

In this webinar, our analysts will examine recent trends and look ahead to explore if this is the end of an era or a pause that will eventually revive the market. Key topics include:

How PE can kickstart the exit engine and return money to investors.

The effects of "higher for longer" interest rates.

How technology and healthcare are set up for PE outperformance.

Register now to secure your spot.

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PE Deals

BlackRock is investing $500 million in Canadian Solar's Recurrent Energy unit, the first transaction by BlackRock's fourth climate infrastructure fund.

Agricultural equipment, food, and energy supplier CPM Holdings received a $400 million strategic equity investment from Koch Equity Development.

Apollo Global Management agreed to buy a €300 million stake in Applus Services, a Spanish certifications company, Bloomberg reported.

The Carlyle Group agreed to acquire a $415 million student loan portfolio. The firm also made a strategic investment in student loan specialist Monogram.

Kain Capital made a follow-on investment in My Dr Now, an Arizona-based primary care group.

London-listed payments specialist Equals Group extended take-private talks with potential buyer Madison Dearborn Partners. The firm, which first entered talks in November, has until Feb. 21 to make an offer.

Melbourne's Ultra Violette, which makes sunscreen products, raised $15 million from Aria Growth Partners.

Consumer-focused PE firm Vendis Capital invested in Skins Cosmetics, a Netherlands-based omnichannel luxury cosmetics retailer.

Fundraising

Spanish PE firm Asterion Industrial Partners is preparing to launch a €2 billion fund, Bloomberg reported.

Chart of the Day

Source: Q4 2023 PitchBook-NVCA Venture Monitor

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PitchBook News - Helping startups get PE-ready

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