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The Daily Pitch: VC

April 17, 2024

The Daily Pitch is powered by PitchBook’s industry-defining research and best-in-class data

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

European PE traded closing mega-deals for raising mega-funds in Q1

How the downturn in PE exits that began in 2022 could dampen overall industry growth

How AI, EVs and NFTs stand out in emerging tech spaces

Our Q1 valuations data for public companies in the medtech sector

PE deals focused on minority stakes aren't facing the same hurdles as large buyouts

Today's Top Stories

AI, EVs and NFTs top emerging spaces

With VCs investing more than $57 billion into emerging technology in 2023, it can be hard to keep up with it all. Analyst Ali Javaheri dives into the sectors and startups attracting investor attention in our latest analyst note on emerging spaces. Generative AI dominated in deal value, while EVs and NFTs followed, but at a distance.

read it now

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European PE makes a slow start to 2024

PE dealmaking in Europe declined in the first three months of the year as investors largely eschewed mega-deals in favor of smaller add-ons. Our Q1 2024 European PE Breakdown illustrates how overall deal value declined 37.2% from Q4 and 19.6% year-over-year. Exit activity was similarly lackluster.

Nevertheless, the region had a record quarter for fundraising. A handful of final closes for mega-funds buoyed the total. Among them was EQT's 10th flagship vehicle with €22 billion—accounting for more than a third of all Europe PE capital raised in Q1.

read the report

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Innovation buoys public medtech performance

Surgical robotics startups, led by SoftBank-backed CMR Surgical, are our picks for the medtech IPO vanguard when the window opens. Shares in the subsector are rising, along with that of other innovation-fueled areas such as liquid biopsy, as investor interest in less-profitable, high-growth business models returns.

In general, public medtech valuations have steadied after a drawn-out decline, and EBITDA multiples are on the rise in the medical devices, consumer health and life sciences segments.

Our Q1 2024 Medtech Public Comp Sheet and Valuation Guide tracks stock performance, EBITDA margins, revenue growth and valuations for key publicly traded companies.

see the data

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US PE's exit slowdown persists in 2024

(Alan Majchrowicz/Getty Images)

The return of PE exits will be a key factor in the market's recovery, but a sleepy start to 2024 offers no solace for investors.

After a slight resurgence at the end of 2023, total US PE exit value fell 19% quarter-over-quarter in Q1, signaling a persistent slowdown, according to our Q1 2024 US PE Breakdown.

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Q&A: Inflexion minority equity head on going for growth

David Whileman, head of Partnership Capital at Inflexion
(Courtesy of Inflexion)

Minority PE investing has received renewed interest as market conditions put a squeeze on big-ticket LBOs.

UK-based PE investor Inflexion has been a pioneer in the strategy within Europe. PitchBook's Marie Kemplay spoke with Inflexion's head of Partnership Capital about how growth equity investing continues to evolve and attract LP interest.

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Don't try to fool LPs

(EschCollection/Getty Images)

Some of PitchBook senior reporter Jessica Hamlin's favorite people to talk to are placement agents, because they're on both sides of the capital raising process.

They're on the ground, asking investment officers about their wants and needs. They're listening—closely.

And from what her placement agent friends are hearing, LPs are over the growth-at-all-costs approach to fundraising. Here's why.

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Microsoft, G42 and the global tech power struggle

(Drew Sanders/PitchBook News)

Microsoft has just invested $1.5 billion in Abu Dhabi-based AI company G42 in a novel deal that speaks volumes about the shifting geopolitical landscape and what it means for private capital.

The deal comes just a day after the US government gave South Korea's Samsung a $6.4 billion subsidy to take its advanced chip production to the US. And it puts a spotlight on the race to secure dominance in chip development and AI technology while limiting competitor access.

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Since yesterday, the PitchBook Platform added:

12

VC valuations

2168

People

759

Companies

21

Funds

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The Daily Benchmark:
2018 Vintage European PE Funds

Median IRR

17.69%

Top Quartile IRR

21.33%

0.31x

Median DPI

Select top performers

Westbridge II

INVL Special Opportunities Fund

Compass Partners Investments GC Fund

*IRR: net of fees

37 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

VC Deals

AI-centric chipmaker Rivos raised over $250 million for its Series A3 led by Matrix Capital Management.

Upstage, a South Korea-based large language model developer, raised a $72 million Series B led by SK Networks, Hana Ventures, Shinhan Venture Investment and others.

Los Angeles-based telehealth startup Two Chairs raised $72 million in equity and debt in a Series C led by Amplo and Fifth Down Capital, TechCrunch reported.

Biotech startup Asher Bio, which is based in San Francisco and specializes in immunotherapies for cancer treatment, raised a $55 million Series C led by RA Capital Management.

GridBeyond, a Dublin-based energy and smart grid specialist, closed a €52 million Series C led by Alantra.

New York-based hospital analytics startup Kontakt.io raised a $47.5 million Series C led by Goldman Sachs Asset Management.

Dutch cultivated meat startup Mosa Meat raised €40 million in a round led by Lowercarbon Capital and M Ventures.

Swiss cleantech startup Bcomp completed a $40 million Series C led by EGS Beteiligungen.

Finmid, a Berlin-based provider of financial services infrastructure for software businesses, secured €35 million from investors including Blossom Capital and Earlybird Venture Capital.

PE Deals

Electricity North West is on the auction block and set to receive bids from utility companies and a consortium of PE firms including KKR and asset manager Caisse de dépôt et placement du Québec, Reuters reported.

Apax Partners has acquired Zellis Group, a payroll and HR software company, from Bain Capital.

Gen II Fund Services has acquired fund administration service provider Crestbridge, in a deal that increases Gen II's AUM to over $1 trillion.

Drug manufacturer Curida has received a growth investment from Signet Healthcare Partners.

Sunstone Partners has made an investment in Accuhealth, which specializes in remote patient monitoring and chronic care management.

Wind Point Partners has sold Handgards, a provider of food service products, to Wynnchurch Capital.

Exits & IPOs

Infosec startup Rubrik has priced its IPO between $28 and $31 per share and plans to sell 23 million, implying a total of $678 million at the midpoint price of $29.50.

Ecommerce company Ibotta has decided to sell an additional 1 million shares in its upcoming IPO, aiming for $524.86 million at the midpoint share price of $80.

After holding the company for more than 10 years, Blackstone may sell G6 Hospitality, operator of the Motel 6 brand, Bloomberg reported.

Argmax, an AI services provider, has acquired VC-backed Ginzi, an AI customer service company.

Birch Hill Equity Partners has put CCM Hockey, a manufacturer of sticks used by some National Hockey League players, up for sale following PE interest, The Globe and Mail reported.

Fundraising

Astarte Capital Partners and Silvipar closed their Silvipar Astarte Impact Forestry Fund on $325.3 million.

Venture firm SOSV raised $306 million for its fifth flagship fund to invest in startups focused on human and planetary health.

Bay Bridge Ventures is in talks to raise a $200 million climate-focused vehicle, TechCrunch has reported.

Swedish state-owned VC firm Almi Invest raised 1.6 billion Swedish kronor (around $146 million) for its third fund generation.

Magnesium Capital, a buyout specialist that targets companies focused on the energy transition, closed its inaugural fund on €135 million, exceeding its €100 million target.

Maven Ventures raised $60 million for its fourth flagship fund focused on seed-stage startups in the consumer applications space.

Investors

Blackstone agreed to buy a former Britishvolt factory site in the UK for around £110 million as part of a plan to build a data center, the Guardian reported.

Chart of the Day

Source: Q1 2024 PitchBook-NVCA Venture Monitor

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PitchBook News - AI, EVs and NFTs top emerging spaces

Older messages

Does US have too many startups?

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