Private debt ranks 2nd in returns, fundraising

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The Daily Pitch: VC

March 21, 2024

Presented by SRS Acquiom

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

Private credit ranked second place for annual performance and fundraising

Reddit's IPO is the second-largest exit from Sam Altman's angel investment portfolio

Astera Labs kicks off AI company IPOs for 2024

Why VCs are targeting Southeast Asia's B2C startups

Today's Top Stories

Solid returns bolster private debt fundraising

Private debt funds have delivered a strong performance, producing an estimated net return of 8.2% for the 12-month period that ended in Q3 2023. This makes it the second-best-performing private market strategy during that span, according to our 2023 Annual Global Private Debt Report, sponsored by the American Investment Council, which explores the latest trends shaping the asset class.

Private debt was also the second-largest fundraising strategy of the year, overtaking VC. When the final numbers are in, the total value of private debt funds closed in 2023 will likely exceed $200 billion for the fourth consecutive year.

read the report

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Reddit's $6.4B IPO ranks near the top of Sam Altman's angel wins

(Lionel Bonaventure/Getty Images)

Social media company Reddit priced at $34 per share in its IPO on the NYSE, giving the company a fully diluted market capitalization of $6.37 billion and raising $748 million.

The listing ranks as the second-largest exit from OpenAI founder Sam Altman's angel investment portfolio, according to PitchBook data. The former Y Combinator chief, who led Reddit's $50 million Series B in 2014, controls shares worth $413 million at the IPO price.

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A message from SRS Acquiom

How to right-size an M&A PPA working capital special escrow

The new 2024
SRS Acquiom M&A Working Capital Purchase Price Adjustment Study shows that the median amount escrowed for PPAs has steadily increased, reaching 1% of transaction value in the past year. It's just one powerful data point in the study, which also reveals:

Customized PPA provisions tailored to deal specifics and the target's financial statements are on the rise.
More "two-way" PPAs mean that seller-favorable surpluses are now present in 2 in 5 deals, up from 1 in 4 a decade ago.

Download the study for key insights from the M&A experts at SRS Acquiom who have resolved 2,400+ PPAs, plus drafting considerations, to help you ensure that working capital provisions work as intended on your next deal.

Don't Miss the Study

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VCs target Southeast Asia's B2C startups

(Richard A. Brooks/Getty Images)

B2C startups accounted for the largest share of VC deal value in Southeast Asia last year. Increasing smartphone adoption and rising consumer spending boosted the sector's allure for VC investors.

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AI cloud startup Astera Labs rockets 72% in Nasdaq debut

Astera Labs' leadership rings the bell on the company's
first day of trading yesterday. (Courtesy of Nasdaq)

The year's first AI IPO is here, making a blockbuster debut. Astera Labs, a cloud infrastructure specialist and chipmaker, has gone public, pricing above its target range after a continuous ramp-up in the days following the IPO. Astera's success might not signal a resurgence in listings, though.

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Firms ready to fight for private credit talent

(Photographer3431/Getty Images)

Earlier this week, US asset manager Barings launched a lawsuit against former executives and Corinthia Global Management after the upstart lured away some key players.

The case shows just how fierce the competition for specialized investing talent may become as asset managers and banks build out their private credit units.

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A topsy-turvy year for climate tech

For climate-tech startups, 2023 was a year of highs and lows. VC investment fell 14.5% year-over-year, reaching a quarterly low of $7.1 billion in Q4. But there are plenty of tailwinds paving the way for a stellar 2024: favorable regulation and policy, high energy prices and consumer demand, to name a few.

Low-carbon mobility, industry and grid infrastructure are attracting particular attention from investors. PitchBook's John MacDonagh dives into the nooks and crannies of the wide-ranging world of climate startups in our recent analyst note.

read the preview

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Since yesterday, the PitchBook Platform added:

7

VC valuations

2196

People

746

Companies

15

Funds

See what our data software can do

The Daily Benchmark:
2018 Vintage Global Funds-of-Funds

Median IRR

20.37%

Top Quartile IRR

24.47%

0.22x

Median DPI

Select top performers

Top Tier Venture Velocity Fund 2

HarbourVest Partners XI-Micro Buyout

Industry Ventures Partnership Holdings V

*IRR: net of fees

41 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

People

Early-stage VC firm DN Capital has hired Gülsah Wilke as partner and head of its German office in Berlin.

VC Deals

San Diego-based biotech startup Capstan Therapeutics raised $175 million in a Series B led by RA Capital Management.

Clasp Therapeutics, a biotech startup focused on immuno-oncology, launched with $150 million in financing led by Catalio Capital Management, Third Rock Ventures and Novo Holdings.

India's Pocket FM, which offers an audio streaming platform, raised $103 million in a Series D led by Lightspeed.

Colombian buy now, pay later startup Addi raised $36 million in equity from investors including Andreessen Horowitz and Union Square Ventures and $50 million in debt from Goldman Sachs.

Canadian healthtech startup PocketHealth raised a $33 million Series B backed by Round13 Capital, Deloitte Ventures and Samsung Next, among others.

Ohio-based insurtech startup Coterie secured a $27 million investment from Hiscox, Intact Ventures, RPM Ventures and others.

Cure51 completed a €15 million seed investment led by Sofinnova Partners. The Paris-based company is developing a database for oncology research.

The CareVoice, the provider of a healthcare operating system for insurers, raised nearly $10 million for its Series B led by Apis Partners.

Don't miss our upcoming webinar

In 2023, the European VC deal value and deal count generated by female-founded companies reached record totals, with their proportion of deal value growing by 36%. And while they represented a growing proportion of annual deal counts over the past decade, our data shows there is still progress to be made.

In this webinar, a panel of expert speakers will share insights from our inaugural European edition of the All In report, sponsored by UBS Wealth Management, Shoosmiths, and Enterprise Ireland. The discussion will analyze the current landscape for European female entrepreneurs, focusing on how female founders have fared in these challenging times. Key topics include:

Activity for female-founded companies followed a similar trend compared to the broader VC environment in 2023, slowing for the second year in a row but remaining elevated when compared to the past decade.

Women represent 15% of all European decision-makers at VC firms with $25 million or more in AUM.

Register now to secure your spot.

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PE Deals

Apollo Global Management has made an $11 billion offer to buy film and TV entertainment company Paramount Global, The Wall Street Journal reported.

R1 RCM, a financial SaaS company for health systems, has told New Mountain Capital and TCP-ASC, a vehicle owned by Ascension Health Alliance and TowerBrook Capital Partners, to terminate buyout talks that would value the company at more than $5.7 billion.

BPEA EQT and ChrysCapital have purchased HDFC Bank's stake in HDFC Credila, its education finance arm, for 95.5 billion Indian rupees (about $1.15 billion).

Montagu Private Equity is purchasing the medical device components unit of London-listed Johnson Matthey for $700 million.

Actis is in talks to buy Swiftnet, Telkom SA's mast and tower business, valued at as much as 6.3 billion South African rand (about $332 million), Bloomberg reported.

Californian medical company Heritage Provider Network has reached out to several PE firms about a sale, while managed healthcare company Humana has indicated interest in taking a minority stake, Bloomberg reported.

Canadian clothing brand Gildan Activewear, which owns the American Apparel brand, is in talks with Sycamore Partners about a potential deal, Bloomberg reported.

Exits & IPOs

Butterfly Equity and CFT Capital Partners are exploring a sale of Chosen Foods that would value the avocado-based food products provider at around $600 million, Reuters reported.

Israeli cybersecurity firm Cato Networks is preparing for an IPO in early 2025, Reuters reported.

Fundraising

King River Capital, Immutable and Polygon Labs are joining to launch the Inevitable Games Fund with $100 million to invest in Web3 gaming startups.

San Francisco-based Zero Prime Ventures has raised $48 million for its second flagship fund, which will back early-stage AI and data startups.

Investors

Linden Capital Partners, a healthcare-focused PE firm based in Chicago, is exploring a minority stake sale, Bloomberg reported.

Chart of the Day

Source: 2024 Southeast Asia Private Capital Breakdown

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Private debt ranks 2nd in returns, fundraising

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