PitchBook News - Q&A: Investing in enterprise AI

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The Daily Pitch: VC

March 26, 2024

Presented by CIBC Innovation Banking

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

Our latest Country Snapshot unpacks PE and VC dealmaking in France

Tola Capital's managing director talks investing in AI and the Microsoft-to-VC pipeline

Our analysts look beyond distributions to cash flows in weighing fund outlooks

Improvement in earnings growth reinvigorates credit markets

Today's Top Stories

Former Microsoft enterprise IT exec on AI investing and her new $230M fund

Sheila Gulati (Courtesy of Tola Capital)

Sheila Gulati, managing director of Seattle's Tola Capital, knows a thing about enterprise software. At Microsoft, she led the enterprise IT strategy and launched the Azure cloud platform. Now, her firm has raised $230 million for its third flagship fund.

Gulati spoke to PitchBook about why more of her former Microsoft peers are jumping into venture, how Tola raised its new fund, and how to better invest in AI.

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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.

read the preview

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Since yesterday, the PitchBook Platform added:

14

VC valuations

552

People

234

Companies

11

Funds

See what our data software can do

The Daily Benchmark:
2013 Vintage Global PE Funds between $500M-$1B

Median IRR

17.81%

Top Quartile IRR

24.45%

1.43x

Median DPI

Select top performers

Accel-KKR Capital Partners IV

Pamlico Capital Fund III

Altaris Health Partners III

*IRR: net of fees

25 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

VC Deals

FundGuard, which provides an AI asset class investment and accounting platform, has raised a $100 million Series C led by Key1 Capital.

AI video- and voice-generation startup HeyGen is in talks to raise $60 million in a round led by Benchmark, The Information reported.

Ohio-based Finite State, a risk management software startup, has raised a $20 million growth round led by Energy Impact Partners.

Virginia-based Iron Sheepdog, a trucking technology startup for brokers and contractors, has raised a $10 million Series B led by SJF Ventures.

New York-based Goalsetter, a fintech startup focused on financial education, has extended its Series A with $9.6 million led by MassMutual and an affiliate of Edward Jones.

Firecell, a French provider of private 5G mobile networks, has raised €6.6 million in a round led by Ventech and Matterwave Ventures.

Circular, which is based in San Francisco, has raised $5.3 million for its sustainable sourcing platform from Eclipse, Maniv and Oxygea.

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.

All-female founding teams amassed €681 million (about $739.46 million) in 2023, and their total deal count dropped by 31%.

Register now to secure your spot.

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PE Deals

Blackstone held talks with advisers for a £1.5 billion sale of flexible workplace company The Office Group, The Telegraph reported.

Advent International and CVC Capital Partners are bidding for Partner in Pet Food, a Hungary-based pet food company owned by Cinven and previously valued at roughly €2 billion, the Financial Times reported.

Morgan Stanley Private Credit led a $220 million recapitalization of media tech company Grass Valley.

TDR Capital made a buyout offer to Nasdaq-listed Target Hospitality, a hospitality services group based in Texas.

Portfolio Companies

VC-backed biotech startup AnHeart Therapeutics was acquired by Nuvation Bio in an all-stock deal.

Exits & IPOs

NYSE-listed industrial solutions company Ingersoll Rand agreed to acquire ILC Dover from New Mountain Capital for an upfront cash purchase price of approximately $2.3 billion.

NYSE-listed Clean Harbors acquired Hepaco, which provides environmental and emergency response services, from Gryphon Investors for $400 million.

American Express Global Business Travel agreed to acquire CWT at a $570 million valuation. CWT offers solutions for business travel and meetings.

Fundraising

Healthcare-focused PE firm Hildred Capital has raised a $750 million continuation fund, The Wall Street Journal reported.

Golding Capital Partners has raised nearly €280 million for its latest secondaries fund, Secondaries Investor reported.

London-based 1991 Ventures has launched a £15 million early-stage fund targeting Ukrainian and Central and Eastern European startups.

London-based early-stage venture firm Ascension VC has raised about £17 million for the first close of an institutional impact fund. The firm aims for a second close in 2025 on £50 million total.

Chart of the Day

Source: 2023 Annual European VC Valuations Report

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PitchBook News - Q&A: Investing in enterprise AI

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