PitchBook News - A new era in aviation?

Also: January performance led by invigorated credit markets; New carbon & emissions tech, information security, and agtech research; Disruption in CRM
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The Research Pitch
February 3, 2024
Presented by Citizens
January performance: The new year has seen invigorated credit markets. Our report breaks down trends in the equity, debt, and commodities markets, tracking returns across a range of indexes. Read it here.

Taking on Salesforce: Our analysts Derek Hernandez and James Ulan will chat with founders from YC's newest crop of CRM startups about how they're taking on incumbents, leveraging AI, and more. Register here.

We're hiring! If you or anyone in your network are looking for private equity news or data opportunities, check out these new job postings:
 
A message from Citizens  
Confidence in a 2024 M&A resurgence is on the rise
In the 2024 Citizens M&A Outlook survey, 400 US middle-market CEOs, CFOs, and private equity principals shared that—despite some lingering challenges—optimism shines bright.

Solid expectations for the US economy, an easing of market headwinds, and some unexpected factors underpin positive sentiment, especially among potential buyers.

Explore the 2024 M&A Outlook
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The blended-wing-body dream may soon become aviation reality
There are no easy answers to decarbonizing the aerospace industry.

Today, aviation is responsible for 2% of global carbon dioxide emissions, an amount that has grown at a faster rate than that of road, rail, and shipping.

The challenge to curtail emissions boils down to simple physics. Gravity is a bigger factor in aerospace than in most other forms of transportation.

Fuel can account for as much as 40% of takeoff weight in a commercial aircraft but is used up over the course of the flight improving lift and range.

Jet A fuel performs the task well but generates a lot of emissions. Batteries and electric motors are appealing from a low-carbon standpoint—depending on where the energy used to charge them came from—but they're heavy and that weight is a burden for the entire trip.

Hydrogen is attractive as emissions are mostly water and it actually beats Jet A significantly in energy per kilogram, but the gas is diffuse and even in liquified form requires a lot more volume than Jet A.
 
New blended-wing-body designs offer many benefits.

For the near to medium term, the industry is focused on blending in sustainable aviation fuel (SAF), which is similar to biodiesel. The trouble with SAF is cost—it's more than 2x that of Jet A.

Fuel cost is significant for airlines and doubling it would destroy profitability or likely curtail demand if the increase was passed to customers.

Instead of focusing on fuels and power plants, however, new aircraft design may prove the more attractive path. The efficiency of the all-wing aircraft has been a dream of going back to the beginning of the aerospace industry, but stability and control issues plagued designers.

New materials and control systems have resolved some problems and a blended wing body (BWB), which extends lifting surfaces across the entire aircraft, promises sizable efficiency gains. Greater interior volume offers more space for passengers or cargo, potentially boosting revenue.

Industry incumbents have had BWB projects and prototypes percolating in R&D labs for decades, but recently a couple of startups have taken up the charge, attracted capital, and are aggressively scaling prototypes with plans to get planes in the air in a few short years.

With increased efficiency and revenue opportunities, BWB designs may be key to profitably achieving industry goals of net zero by 2050.

For further details, check out our free analyst note: Blended-Wing-Body Aircraft
 
Best,

Jonathan Geurkink
Senior Analyst, Emerging Technology
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Industry & Tech Research  
 
Climate tech funding in 2023 reached $16.5 billion across 1,025 deals, setting new annual records for activity.

The industry segment—e.g., low-carbon manufacturing, chemical production, recycling, mining—topped the vertical in deal value ($8.5 billion) and deal count (344).

Our new Carbon & Emissions Tech Report unpacks the data and dives into emerging opportunities in areas like soil carbon tech and building heat management:
read a free preview
 
 
The infosec industry is expanding to defend against AI-generated disinformation ahead of the 2024 elections.

Indeed, despite a decline in VC funding for the sector since early 2022, opportunities still exist, according to our new Information Security Report.

The research provides an overview of VC activity, market maps, and analysis of emerging opportunities:
read a free preview
 
 
Despite a slow Q4 for agtech, agribusiness marketplaces, drone specialists, and imagery startups showed strength—especially those focusing on generative AI applications.

Labor shortages, supply chain disruptions, and climate change will require economic transformations that agtech specialists can facilitate, per our new Agtech Report.

From precision farming to optimized crop management, there's much in store for the industry in 2024:
read a free preview
 
 
Webinars & Events  

A reminder of our upcoming events:

Feb. 5-8: Join our analysts at BVCA's European Private Capital Conference series in New York and San Francisco. The half-day conferences are for institutional investors only and are designed to connect European GPs with North American LPs and investment consultants. Register here.

Feb. 15: Dwindling cash runways coupled with a stagnant exit environment have created intense challenges for the US VC ecosystem. Our quarterly Venture Monitor webinar will feature key highlights from the report and discuss the trends investors need to be aware of. Register here.
 
 
In the News  

Our insights and data featured in the press:
  • US VCs have deployed just half of the $435 billion they raised during the pandemic-era boom between 2020 and 2022. [FT]

  • Since 2021, Europe-based AI startups have raised $44 billion in VC funding, equal to the total in China but just a quarter of their peers in the US. [WSJ]

  • Placements of new loan and bond deals soared in January, after dropping sharply in 2022 and see-sawing in 2023. [Axios]

  • Crypto CVCs are being outpaced by other investors when it comes to backing blockchain startups. [Bloomberg Crypto]

  • In 2023, the US's share of semiconductor startup funding was 11%, versus 75% for China. [Quartz]
If you're a journalist interested in interviewing our analysts or requesting data, contact our PR team.
 
 
ICYMI  

More of our recent research (* - report preview):

Market updates
Thematic research
Industry & tech research
Credit research
Coming next week (subject to change)
  • US VC Valuations Report
  • Global Fund Performance Report
  • PitchBook Private Capital Indexes
  • Healthcare Services Report
  • Enterprise Fintech Report
  • US VC Fundraising from an LP Perspective
 

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