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The Daily Pitch: VC

March 28, 2024

Presented by CIBC Innovation Banking

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

Despite slow PE and VC activity in healthcare IT, the sector is awash with emerging opportunities and notable happenings

A discussion with an EIF director covers how the LP adds value in VC

Our list of 10 US VC-backed biopharma unicorns with a high likelihood of going public in 2024

Tech dealmaker Thomas Tull throws his support to startup Celestial AI

Today's Top Stories

LP Q&A: European Investment Fund on adding value in VC

Uli Grabenwarter, the European Investment Fund's director
of equity investments (Courtesy of the EIF)

The European Investment Fund is one of Europe's most prolific backers of VC and PE funds.

Its head of equity investments, Uli Grabenwarter, is no stranger to operating in challenging market conditions. He spoke to PitchBook about the EIF's role in catalyzing European VC investment activity, how the firm differentiates itself from other LPs and his biggest concerns about the tight funding environment.

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Even as healthcare IT explores generative AI, dealmaking slips

The healthcare IT sector has been abuzz this year already—from AI hype maturing at recent industry conferences to the February ransomware attack on Change Healthcare that rocked healthcare providers nationwide. Despite the sector's close eye on AI emerging opportunities for payer workflow enhancements and working generative AI into clinical decision support, private markets dealmaking had a lackluster end to 2023.

For VC, Q4 activity was at its weakest for the year, according to our latest Emerging Tech Research, while PE's momentum stayed flat. Rounding out the year's totals, both strategies cemented annual rates of decline in the mid-to-high 20s.

read the preview

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A message from CIBC Innovation Banking

How do start-ups find stability in an unpredictable market?

When markets are unpredictable, high-growth companies can find it harder to meet their funding needs. That's why some start-up founders are turning to a banking partner that specializes in the innovation economy. CIBC Innovation Banking combines deep expertise of early-stage companies with the historical stability of one of North America's leading banks. And they're helping their clients find the steady footing they need.

Discover what makes CIBC Innovation Banking the banking partner of choice for companies from coast to coast.

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IPO Watchlist: The biopharma unicorns that could go public in 2024

(Thomas Samson/Getty Images)

2024 is shaping up to be a busy year for biopharma exits: Seven companies in the sector have already IPO'd since the start of the year, for a collective exit value of $3.1 billion.

The upswell in IPOs has the potential to drive more companies to explore a public listing, especially those riding the waves of innovation in AI-driven drug discovery and weight-loss drugs.

Using PitchBook's Exit Predictor, we dig into which biopharma companies might be next out the door.

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Thomas Tull’s USIT leads $175M round into Celestial AI

Thomas Tull
(China Photos/Getty Images)

Celestial AI, a photonics computing startup aimed at bringing down the costs of AI, has raised a $175 million Series C.

The investment highlights the budding leadership in AI deals of former Legendary Entertainment CEO Thomas Tull's VC firm, US Innovative Technology Fund. The firm, which led the Series C, previously led a $320 million Series C into AI GPU cloud computing startup Lambda.

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Bank of England takes a hard look at PE

(Mike Kemp/Getty Images)

The Bank of England could be stepping up scrutiny of PE over the perceived risks to the financial system.

In particular, a report by the bank's financial policy committee noted a lack of transparency on how portfolio companies are using debt. Are the concerns justified?

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Could top VCs be warming up to crypto—again?

PitchBook's latest Emerging Tech Indicator, which shares quarterly insights on investment activity from a subset of the world's most successful VC firms, has found that while AI and biotech continued their reign at the top, investment in crypto had steady gains.

Deal activity was on the decline again, as were deals worth over $100 million. Check out the data, trends and startups within the key verticals top investors have backed.

read the report

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CRMs lead an enterprise SaaS rebound

In Q4, enterprise SaaS startups raised $14 billion across 597 deals, an 11.9% quarter-over-quarter increase in deal value but an 8.6% decrease in deal count. Customer relationship management startups led the way, with VC investment up 72.5% from Q3.

Now, several companies are experimenting with conversational AI, hoping to streamline processes and lower costs. Our Q4 2023 Enterprise SaaS Report provides an overview of the space, touching on the key trends, data, and startups investors need to know.

read the preview

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Since yesterday, the PitchBook Platform added:

20

VC valuations

2338

People

913

Companies

41

Funds

See what our data software can do

The Daily Benchmark:
2011 Vintage Global PE Funds between $250M-$500M

Median IRR

18.85%

Top Quartile IRR Hurdle Rate

25.03%

1.73x

Median DPI

Select top performers

Shamrock Capital Growth Fund III

Monomoy Capital Partners II

Carousel Capital Partners IV

*IRR: net of fees

25 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

VC Deals

Ecommerce giant Amazon has invested $2.75 billion into generative AI startup Anthropic as part of its pledged $4 billion total.

Sutter Hill Ventures led a $115 million Series B for observability startup Observe.

Hume AI, a New York-based wellness startup, raised a $50 million Series B led by EQT Ventures.

Indonesian insurtech startup Qoala closed a $47 million Series C led by PayPal Ventures and MassMutual Ventures.

New York's Nourish, a telehealth startup focused on nutrition, raised a $35 million Series A led by Index Ventures.

Boston-based InStride Health, a provider of pediatric anxiety and OCD treatment, raised a $30 million Series B led by General Catalyst.

Pittsburgh-based Gather AI, a startup focusing on AI-powered warehouse inventory management, raised a $17 million Series A1 led by Bain Capital Ventures.

Peaq, a Singapore-based blockchain specialist, raised $15 million in a round led by Generative Ventures and Borderless Capital.

Watttron, a German developer of digital heating systems, secured a €12 million Series B led by the Circular Innovation Fund and the European Circular Bioeconomy Fund.

Hive, a Geneva-based provider of cloud storage and computing, raised a €12 million Series A led by SC Ventures.

PitchBook webinar: Insights into investment firm compensation trends

Join us for a discussion on how compensation trends at VC and PE firms have changed in recent years and what we might expect moving forward. Jody Thelander, founder & CEO of the namesake firm; Kaidi Gao, PitchBook VC research analyst; and Jim Jensen, partner at Wilson Sonsini Goodrich & Rosati, will share real-time data on base salaries, bonuses, carried interest percentages and more across various positions. Key topics include:

Compensation trends year-over-year by total AUM and type of firm.

Best practices for fund structure, including fund formation and carried interest.

Register now to secure your spot.

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PE Deals

Blackstone-backed Encore Group, an audiovisual and event services company, is working with Goldman Sachs to raise at least $500 million in preferred equity, Bloomberg reported.

CVC Capital Partners acquired the entire stake owned by Ardian, Alantra, Artá Capital and Landon in Spanish frozen dough company Monbake.

One Equity Partners made a minority investment in Italian agricultural tractor manufacturer CBM.

Web3 investment management firm Borderless Capital agreed to acquire CTF Capital, a quantitative trading and asset management company headquartered in Miami.

One Equity Partners completed its acquisition of the measurement solutions business of TechnipFMC and has rebranded the unit as Guidant.

Marlin Equity Partners agreed to make a majority growth investment in Treasury Intelligence Solutions, a cloud-based B2B payments company.

WCAS-backed compliance software provider Avetta has attracted takeover interest from EQT, Warburg Pincus and Bain Capital, Bloomberg reported.

Exits & IPOs

Ardian-backed French laboratories chain Inovie Group is considering a potential sale valuing the business at over €3 billion, Bloomberg reported.

Fundraising

Percheron Capital, a PE firm focused on essential services businesses in North America, closed its Fund II on $1.55 billion.

Investors

UBS has sold $8 billion in loan assets to Apollo Global Management as part of a deal renegotiation.

Chart of the Day

Source: 2023 US All In: Female Founders in the VC Ecosystem

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PitchBook News - LP Q&A: Adding value in VC

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The startups innovating in digital health

Q&A: Investing in enterprise AI

The 10 big SaaS VC investors

The coming AI shakeout

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