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The Daily Pitch: VC

March 11, 2024

Presented by SRS Acquiom

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

Our inaugural MENA Private Capital Breakdown unpacks private market trends in the Middle East and North Africa

Accounting for generative AI's risks is crucial when adapting it for HR tech solution

Our market map breaks down the enterprise fintech startups developing tools for CFOs

Investors eye annuities to give the insurtech sector a jolt

PE fundraising rebounded in last year's second half

Today's Top Stories

MENA PE picks up as VC market slows down

Unlike many other global regions, the Middle East and North Africa's PE market saw a boost in both deal value and count in 2023. Exit value and volume were also on the up and up. The only dim spot was fundraising, which fell significantly from 2022's record highs, according to our inaugural H2 2023 MENA Private Capital Breakdown.

While venture dealmaking in the region slowed, 2023 still registered the second-highest annual total for VC deal value. Between 2018 and 2022, the region's VC market grew sixfold as it continues to mature.

read the report

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Can HR tech reap the rewards of AI—without the risk?

The current limitations of generative AI make deployment tricky in human resources technology, but solutions that play to its strengths are expected to shepherd the sector's evolution through 2024. Our latest analyst note plots out the solutions up next for HR tech.

Generative AI: Models trained on a company's existing policies, documentation or marketing can multiply HR capacity with rapid generation of internal or external content.

Virtual assistants: These streamline communication with employees while also lowering legal and compliance risks.

Machine learning: The wealth of data generated through HR work can be mined for insights and strategies.

read it now

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A message from SRS Acquiom

Ignoring working capital on M&A deals can mean leaving money on the table

Stay ahead of the latest M&A Purchase Price Adjustment insights and trends to help ensure that working capital works as intended on your next deal. The new 2024 SRS Acquiom M&A Working Capital PPA Study features exclusive data as well as insights and drafting considerations gleaned from over 2,400 PPAs resolved by the SRS Acquiom team of M&A experts. Learn about:

Increasingly customized PPA provisions: Tailored to deal specifics and the target's financial statements
Bigger special escrows for PPAs: Median sizes reaching 1% of the transaction value
More "two-way" PPAs: Resulting in a seller-favorable surplus on approximately 2 in 5 deals, up from 1 in 4 a decade ago

Get the Study Now

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Market Map: The startups helping CFOs manage their businesses

(The Good Brigade/Getty Images)

In recent years, chief financial officers have struggled to reconcile data across different systems, manage cashflows and develop new strategies based on vast amounts of information.

Our latest market map dives into the enterprise fintech startups working within the CFO stack. These companies create tools to help finance teams manage budgets, accounting, payroll and more.

explore the market map

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Investors eye annuities to give insurtech a jolt

In Q4 2023, insurtech startups generated $1.3 billion across 102 deals, representing declines of 22.3% and 15.7% from Q3.

Annuities saw record sales of $385 billion in 2023. Solutions that startups offer for annuity advisors include assisting with marketing and modernizing annuity management. PitchBook's latest Emerging Tech Research provides an overview of the space while touching on the key trends, data and startups that investors need to know.

read the preview

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Slowdown? PE fundraising shows surprising strength

(Sakchai Vongsasiripat/Getty Images)

Private equity fundraising remained surprisingly resilient last year, despite the market's concern that a lack of exits and a slower distribution pace might make it more difficult for GPs to raise new capital.

Worldwide, PE funds hauled in $554 billion in 2023, almost on par with the previous year. That was supported by a strong rebound in the back half of 2023, when GPs wrapped up a crop of mega-funds.

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Since yesterday, the PitchBook Platform added:

28

People

27

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See what our data software can do

The Daily Benchmark:
2014 Vintage Global Funds-of-Funds

Median IRR

18.45%

Top Quartile IRR

21.86%

0.92x

Median DPI

Select top performers

Pantheon USA Select 2014

Union Grove Partners Direct Venture Fund

Spectra Private Equity II

*IRR: net of fees

64 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

VC Deals

San Diego-based biotech company Rakuten Medical raised a $119 million Series E from investors including Hikma Pharmaceuticals and SBI Group.

The Ayurveda Experience, an Indian beauty and health brand, secured $27 million in a round led by Jungle Ventures.

Reach Security raised $20 million in a round led by Ballistic Ventures for its AI security operations platform.

Biobot, a Singapore-based robotic surgery startup, raised an $18 million Series B from angel investor Tony Tan.

Efficient Computer, a Pittsburg-based startup developing energy-efficient semiconductors, emerged from stealth with $16 million in seed funding from Eclipse VC.

Italian space-tech startup Kurs Orbital raised a €3.7 million seed round led by OTB Ventures.

PitchBook webinar: Net asset value loans

Net asset value loans have emerged in recent years as a solution to support portfolio companies in maintaining liquidity through turbulent conditions. In this on-demand webinar, our panel of experts debates the benefits and drawbacks of NAV loans from both a GP and LP perspective—covering potential tensions around alignment, interest rates and more. Key topics include:

What GPs, LPs and lenders think about use cases for NAV loan proceeds.

What GPs should know when deliberating using a NAV facility.

Questions LPs should prepare when GPs are contemplating these loans.

Improving transparency around NAV loans.

Watch the webinar.

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PE Deals

Nasdaq-listed Brazilian investment firm Vinci Partners Investments has agreed to combine with Chilean asset manager Compass, forming a $50 billion AUM firm, The Wall Street Journal reported.

Iberdrola has offered to buy out the minority shareholders in its US green power unit, Avangrid, for $2.5 billion, Bloomberg reported.

Sixth Street and Silver Lake have led a $1.8 billion strategic investment for high-end gym chain Equinox Fitness.

The Canada Pension Plan Investment Board is acquiring a 17.5% stake in the fixed line network of Telecom Italia for up to €2 billion.

Keensight Capital has acquired Dublin-based software company SoftCo for approximately €100 million.

BlackRock has agreed to acquire SpiderRock Advisors, a company that offers personalized separately managed accounts.

Pollen Street Capital has agreed to buy Mattioli Woods, a UK-listed wealth adviser with £15 billion AUM, in a £432 million deal.

Bregal Milestone has picked a majority stake in Evli Alexander Incentives, the former equity plan design and administration arm of Nordic wealth manager Evli Group.

Exits & IPOs

ADQ is exploring an IPO of Gulf hub airline carrier Etihad Airways, Bloomberg reported.

Fundraising

Infrastructure and real estate investor Stonepeak raised $3.3 billion for its Asia Infrastructure Fund.

EQT held the final close of its Future Fund on €3 billion.

Mirova, a sustainable finance-focused unit of Natixis Investment Managers, is targeting €200 million for its new growth equity fund.

The Artemis Fund raised $36 million for its second fund to invest in startups led by underrepresented founders.

Chart of the Day

Source: 2023 Annual European VC Valuations Report

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