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The Daily Pitch: VC

March 22, 2024

Presented by SRS Acquiom

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

Our analysts outline the state of ESG and impact investing in the private markets

Which startups are driving change in automotive manufacturing?

Investors tap into geothermal energy as the technology evolves

Dive into the data on female founders and investors in the VC ecosystem in the US and European editions of our All In report

The current state of ESG and impact

After extreme backlash against ESG in the US, some asset managers have been reconsidering their allocations to funds using the framework. Various investors have backed away, while others have leaned in.

In the impact investment arena, LPs are considering different approaches with commitments dedicated to either broad mandates or individualized missions. Our latest analyst note outlines the risks and opportunities still present under these umbrellas.

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Mobility's manufacturing moment arrives

Electric vehicle growth is slowing. Autonomous taxi operators are scaling back. At an inflection point for automotive tech, VC investors are hot on solutions that promise to power the next generation of manufacturing capabilities, our latest Mobility Tech Report explains.

The trend is helped by intense international competition and significant US investment in domestic production. Notable deals in the automotive manufacturing segment include Divergent, which raised $230 million in the quarter to build out its digital production system for industrial manufacturing. Electric motor maker Infinitum raised $200 million to scale its own manufacturing efforts.

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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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A VC strategy for transatlantic expansion

(Richard Drury/Getty Images)

Expanding internationally can often be a fraught journey for startups, but a Dublin-based VC firm hopes to ease the process with its recent fundraise.

Frontline Ventures has secured $200 million across its seed and growth funds targeting B2B software startups aiming to make it on either side of the Atlantic.

The benefits of transatlantic expansion are significant, but the process is far from easy. Startups face numerous challenges, including regulation, competition and cost.

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US female founders grab record share of VC dollars

Female founders increased their share of US VC capital raised in 2023, according to the latest All In: Female Founders in the VC Ecosystem report sponsored by Deloitte, Pivotal Ventures and Wilson Sonsini.

Female founders and co-founders secured 27.8% of deal value last year. That figure drops to 22.8% if you exclude OpenAI's $10 billion raise, but it still marks a record high.

In absolute terms, deal activity fell along with the broader venture market, with female founders securing 25% fewer deals.

At the GP level, the share of female check-writers at the largest VC firms grew slightly to 17.4%.

A European edition of the All In report, sponsored by UBS, Shoosmiths and Enterprise Ireland, is also available for download.

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Geothermal market heats up

Investors are tapping into the geothermal energy market as technological advances in the binary cycle and dry rock fracturing drive innovation, according to our recent Emerging Space Brief. With novel applications in agriculture and industry, geothermal energy is particularly exciting: It's isolated from external conditions and, unlike wind and solar, offers consistent base-load energy.

For novel electricity sources like geothermal, both scalability and regulatory issues can pose roadblocks. But the US Inflation Reduction Act could also hold the keys to the technology's future.

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Since yesterday, the PitchBook Platform added:

7

VC valuations

2163

People

790

Companies

22

Funds

See what our data software can do

The Daily Benchmark:
2016 Vintage European VC Funds

Median IRR

23.31%

Top Quartile IRR

40.83%

1.79x

Median DPI

Select top performers

Medicxi Ventures 1

BY Capital 1

Synthetic Fund I

*IRR: net of fees

10 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

VC Deals

Form Energy, a battery duration developer, is in talks to raise $500 million for its Series F, which it plans to close in the second half of the year, Axios reported.

New York's Coast, a fleet management startup, raised $25 million in equity from investors including Accel, Avid Ventures and Insight Partners and a $67 million debt facility from Silicon Valley Bank and TriplePoint Capital.

AI cloud startup Foundry, which is based in Palo Alto, raised $80 million in seed and Series A funding led by Lightspeed and Sequoia.

New York-based carbon accounting startup Greenly closed a $52 million Series B led by Fidelity International Strategic Ventures.

Loyal, a San Francisco-based biotech startup focused on longevity for dogs, raised a $45 million Series B led by Bain Capital Ventures.

Indian smart ring developer Ultrahuman raised a $35 million Series B from investors including Blume Ventures, Steadview Capital and Nexus Venture Partners.

Crypto infrastructure startup Espresso Systems raised a $28 million Series B led by Andreessen Horowitz.

HR startup Borderless emerged from stealth with a $27 million seed round led by Susquehanna and Aglaé Ventures.

German fintech company NX Technologies completed a €22 million Series B led by PayPal Ventures.

Fuel Me, a fuel procurement and management startup based in Chicago, raised an $18 million Series A led by Pritzker Group Venture Capital and Tribeca Venture Partners.

Paris' Pelikan Mobility secured €4 million from investors including Pale Blue Dot, Frst and Seedcamp for its commercial fleet platform.

PE Deals

KKR agreed to purchase a majority stake in EIG-backed renewable energy company Avantus.

Investment firm Vitruvian Partners is exploring a minority stake sale and has held discussions with Blue Owl Capital and Blackstone, Bloomberg reported.

HIG Capital agreed to acquire Alight's payroll and professional services business for up to $1.2 billion.

Hg made a significant investment in automated regulatory intelligence company Cube.

Industrials-focused PE firm Allied Industrial Partners made a strategic investment in entertainment transportation and logistics provider Celebrity Coaches.

Exits & IPOs

Synopsys acquired semiconductor design startup Intrinsic ID.

Clarivate purchased MotionHall, an AI life sciences startup.

Social media company Reddit saw its stock price grow 48% in its first day of trading after opening at $47 per share.

Fundraising

Amsterdam-based deep-tech investor OTB Ventures closed its second fund on $185 million.

Chart of the Day

Source: 2023 Annual Global Private Debt Report

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