A new wave of buy now, pay later startups

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The Daily Pitch: VC

March 8, 2024

Presented by SRS Acquiom

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

A new crop of buy now, pay later startups are poised to energize retail fintech

The Nordic region had a mixed year in terms of total deal values, with PE up and VC down

From SaaS to gaming, what will be the next big thing in VC?

A look at Germany's VC ecosystem across dealmaking, fundraising and exits

Today's Top Stories

How buy now, pay later will propel retail fintech forward

Retail fintech saw slight growth in Q4 with deal value ticking up to $2.6 billion, a 5% increase from the previous quarter. While deal count declined to 148 deals—a 10.8% decrease from Q3—a new crop of buy now, pay later startups are poised to energize the space.

The Q4 2023 Retail Fintech Report dives into the new wave of BNPL startups, with financial analysis of the major players and trends investors need to know.

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Deals for European female founders grow at twice the rate of all-male teams

Funding for European female founders showed resilience in a down year, according to the latest All In: Female Founders in the VC Ecosystem report sponsored by UBS, Shoosmiths and Enterprise Ireland.

Female founders captured 25.8% of deal count and 20.5% of deal value in 2023—both records, although investment fell in absolute terms.

Deals for European female-founded companies grew more than twice as fast as deals for all-male-founded teams over the past decade.

Just 15.2% of decision-makers at large European VC firms are women. However, healthcare-focused investors tend to have better representation.

A US edition of the All In report, sponsored by Deloitte, Pivotal Ventures and Wilson Sonsini, is also available for download.

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A message from SRS Acquiom

M&A working capital adjustments are evolving: Do you know the latest?

The new 2024
SRS Acquiom M&A Working Capital Purchase Price Adjustment Study shows that two-way PPAs are increasingly common, resulting in a seller-favorable surplus on 40% of transactions—up from 25% a decade ago. The study also shows that:

Customized PPA provisions tailored to deal specifics and the target's financial statements are increasingly used by dealmakers.
PPA special escrows are growing, with the median size reaching 1% of transaction value.

Download the data-rich, insight-packed study to uncover all the trends you need to know to efficiently navigate the post-closing process on your next deal. You can also review drafting considerations from the M&A experts at SRS Acquiom who have resolved 2,400+ PPAs.

Explore the Study

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Nordic region sees PE values surge, VC declines

The Nordic PE market recorded its second-best year for total deal value in 2023, defying the slump that has become widespread across Europe. Up 3.7% year-over-year, it was driven by a record year for take-private deal value, according to our 2024 Nordic Private Capital Breakdown.

The region's venture market was not so lucky, with total deal value falling 47.1% YoY to stand at €5.9 billion (about $6.46 billion). Sweden has historically been the driving force behind the Nordic VC ecosystem, and Stockholm ranked as the third-largest hotspot for all of Europe in terms of deal value last year, a status it hasn't held since 2016.

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Declining fortunes: Mapping Germany's VC ecosystem

(Stadtratte/Getty Images)

Last year, Berlin failed to make the top three European cities by deal value for the first time since 2016—one sign of Germany's lackluster year for VC dealmaking.

Take a look at some of the key trends defining Germany's VC ecosystem.

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Charting the next hot thing in VC

AI might be the hot-button topic of today, but what about in a year from now? Our recent quantitative report begins a new series: VC Emerging Opportunities.

Our analysis covers everything from SaaS to gaming to climate tech—and includes our proprietary predictions on future returns on investment. Using PitchBook's VC Exit Predictor, our quantitative team charts the course of the next generation of startups and calculates payout expectations for early investors.

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Since yesterday, the PitchBook Platform added:

11

VC valuations

2160

People

582

Companies

43

Funds

See what our data software can do

The Daily Benchmark:
2016 Vintage Global Secondaries Funds

Median IRR

17.99%

Top Quartile IRR

24.37%

0.81x

Median DPI

Select top performers

LTO Fund

Industry Ventures Special Opportunities Fund III

Ashbridge Transformational Secondaries Fund I

*IRR: net of fees

28 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

VC Deals

Zama, a Paris-based open-source cryptography startup, has closed a $73 million Series A led by Multicoin Capital and Protocol Labs.

Denver-based Todyl, a cybersecurity startup, has raised a $50 million Series B led by Base10 Partners.

Colorado-based Defense Unicorns, which develops software for the defense industry, has raised a $34 million Series A led by Sapphire Ventures and Ansa Capital.

Data management and directory software startup Cayosoft, which is based in Ohio, has raised a $22.5 million investment from Centana Growth Partners.

Neural Propulsion Systems, a radar software startup based in California, has raised a $17.5 million Series B from Cota Capital, GM Ventures and RTX Ventures.

German direct air capture startup Greenlyte Carbon Technologies has raised a €10.5 million pre-Series A from investors including Earlybird Venture Capital and Carbon Removal Partners.

UK-based biotech startup Wobble Genomics has secured €9.9 million in a round led by Mercia Ventures and BGF.

London-based Cogna has received £3.76 million led by Hoxton Ventures for its AI-driven SaaS platform.

PE Deals

The Carlyle Group and KKR are eyeing a potential takeover of Hong Kong-listed luggage maker Samsonite International, Bloomberg reported. Bain Capital and CVC Capital Partners are also said to be suitors.

KKR is in early talks with German renewable energy producer Encavis regarding a possible acquisition.

Apollo Global Management is interested in exploring a bid for Nasdaq-listed travel information website TripAdvisor, Bloomberg reported.

Carousel Capital recapitalized North Carolina-based OR Colan Associates, a land management solutions provider.

Advent International and The Carlyle Group are both weighing bids for Sanecum, the German operator of a chain of medical centers, that could be valued at up to €1.5 billion, Bloomberg reported.

Ardian agreed to acquire CampusParc, a parking services provider backed by QIC, for over $850 million including debt, Bloomberg reported.

Portfolio Companies

Triton is combining two portfolio companies, Sweden-based Assemblin and Finland-based Caverion, to form Assemblin Caverion Group. Both specialize in designing and maintaining technical systems for air, energy and water.

VC-backed French banking company Qonto bought Regate, an accounting and automation startup, TechCrunch reported.

Exits & IPOs

Nasdaq-listed Bruker acquired Investnet-backed laboratory research and development specialist Chemspeed Technologies.

Multinational company Sugar Foods acquired food products retailer Concord Foods from Arbor Investments.

ReachFive, a VC-backed customer identity specialist, has been acquired by French fintech company Purse.

NYSE-listed Cloudflare has purchased Nefeli Networks, a VC-backed cloud networking startup.

Healthy Together acquired Kinsa Health, the VC-backed developer of an early warning system intended to help stop the spread of infectious illness.

Zapier, a workflow automation specialist, purchased VC-backed video conferencing startup Vowel.

Fundraising

Andreessen Horowitz is raising nearly $7 billion for several funds, including a flagship fund and several industry-specific vehicles, according to reports.

Limerston Capital, a UK-based middle-market PE firm, closed its second fund on £245 million.

Early-stage proptech investor Prudence closed its third fund on $80 million.

Corporate M&A

The UK's Nationwide Building Society has agreed to terms for the purchase of Virgin Money in a £2.9 billion deal. The transaction would reportedly create the UK's second-largest mortgage and savings group.

Chart of the Day

Source: 2023 Annual Global Private Market Fundraising Report

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