PitchBook News - European VC valuations unbowed

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The Daily Pitch: VC

February 21, 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:

Pre-money valuations are still growing across most stages in Europe

Only two of Europe's 10 most valuable startups have confirmed profits

Encouraging economic indicators signal private market investors may soon be out of the woods

Today's Top Stories

European VC valuations largely survive corrections

Europe's venture market saw many valuation corrections last year, but the median pre-money valuation still increased year-over-year across most stages. Only the seed and venture-growth stages suffered declines, according to our 2023 Annual European VC Valuations Report, and only venture growth registered a lower median deal value in 2023.

While valuations aren't expected to rebound to 2021 levels any time soon, there are indications that Europe may have reached the low point of the valuation dip. Changes in interest rates will likely determine the extent of recovery in VC valuations going forward.

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Signs point to an improving climate for US private markets

The private markets were mired in a slower deal and exit environment last year. Deal volume of buyouts, growth equity and VC investments dropped by 47.8%, 44.9% and 61.8%, respectively, in Q4 from the high-water marks set in Q4 2021.

But encouraging economic indicators, improving credit conditions and the upturn in public market performance signal that private market investors may soon be out of the woods, according to our Q1 2024 Quantitative Perspectives: US Market Insights report.

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2 of top 10 most valuable startups in Europe known to be profitable

(NurPhoto/Getty Images)

At a time when investors are emphasizing profitability, just two of Europe's 10 most valuable VC-backed companies—fintech unicorns Revolut and SumUp—have confirmed profits.

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VC Deals

Chinese generative AI startup Moonshot AI has raised more than $1 billion from Alibaba and HongShan, according to reports.

Monzo is targeting a £4 billion valuation, the Financial Times reported. The London-based challenger bank is looking to raise as much as £350 million in a deal expected to close in the coming weeks.

Massachusetts-based Ascend Elements, which specializes in battery materials for electric vehicles, has secured $162 million from Clearvision Ventures, Just Climate and Irongrey.

Recogni, a San Jose-based AI hardware startup, has raised a $102 million Series C co-led by Celesta Capital and GreatPoint Ventures.

France's Planity has received a €45 million Series C led by InfraVia Capital Partners for its booking platform for the beauty industry.

Reprieve Cardiovascular, a Massachusetts-based developer of treatments for heart failure, has emerged from stealth with a $42 million Series A co-led by Lightstone Ventures and Sante Ventures.

France-based Bioptimus has emerged from stealth with a $35 million seed round led by Sofinnova Partners.

Techtaka, a South Korean ecommerce fulfillment startup, has raised a $9.5 million Series B from Altos Ventures.

German fintech startup Monite has added $6 million from Valar Ventures and Third Prime to its seed round, which now totals $16 million.

Juniper, a UK-based provider of reproductive health insurance, has raised €1.7 million led by Insurtech Gateway.

Singapore's Xalts, a financial infrastructure SaaS company backed by Accel and Citi Ventures, has acquired peer Contour Network.

PE Deals

Truist Financial agreed to sell its insurance unit to an investor group led by Stone Point Capital and Clayton, Dubilier & Rice for approximately $15.5 billion.

TPG has emerged as the highest bidder for Permira-backed Alter Domus in a deal that could value the fund administrator at around €4.5 billion, Bloomberg reported.

Centerpoint Energy sold its Louisiana and Mississippi natural gas assets to Bernhard Capital Partners for $1.2 billion.

Vestas Wind Systems sold a 12.5% stake in Lake Turkana Wind Power, Africa's biggest wind farm, to BlackRock.

The Carlyle Group has proposed a recapitalization plan for London Southend Airport, partly funded by hedge fund Cyrus Capital Partners, that would see Carlyle take majority ownership of the business. Current majority owner, UK infrastructure firm Esken, has until March 4 to respond.

Paris-based Omnes Capital acquired a majority stake in German energy solutions developer Erneuerbare Energien Fabrik.

Chicago-based PE firm Kinzie Capital Partners agreed to acquire Stoic Holdings-backed Arctic Industries, a manufacturer of walk-in coolers and freezers.

Main Capital Partners-backed Qics bought Danish project management software provider ProjectFlow.

Fundraising

Keystone Capital Management has held a final close on $630 million for Keystone Fund III.

Corporate M&A

Capital One Financial agreed to acquire Discover Financial Services in a $35.3 billion all-stock transaction that would bring together two of the US' largest credit card providers.

Chart of the Day

"Our data shows that the number of down rounds as a percentage of total VC rounds increased from 2022 to 2023. In 2023, 12.7% of all fintech VC rounds were down rounds, 75.2% were up rounds, and 12.1% were flat rounds. Comparatively, only 5.4% of VC rounds were down rounds in 2022, with up rounds and flat rounds representing 90.6% and 4.0% of deals, respectively."

Source: Financial Fusion: Fintech's M&A Landscape Unveiled

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PitchBook News - European VC valuations unbowed

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