VC-backed companies narrowly guard valuations

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The Daily Pitch: VC

May 9, 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:

Median VC valuations rose in Q1, but only modestly

USC's investment office holds on to its private market exposure to China

Data specialist Atlan's $105 million Series C spotlights need for oversight in AI

Analysts cover the valuation reset in the agtech market

Today's Top Stories

VC-backed companies narrowly guard valuations

Though median VC valuations rose in Q1 across all stages, those prices were only modestly higher than companies' prior valuations, according to our latest US VC Valuations Report, sponsored by Morgan Stanley at Work.

Companies are also exiting at low step-ups and occasionally taking large haircuts—as was the case in Reddit's IPO, which priced about 40% below its $10 billion valuation from 2021.

In the growing secondary markets, shares are trading at a 28% discount on average.

Flat and down rounds continue to rise as a share of all VC deals, hitting 27.4% in Q1.

read the report

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USC endowment chief weighs China exposure

(Mario Tama/Getty Images)

The University of Southern California's investment office is holding on to its private market exposure to China.

Amy Diamond, chief investment officer at the USC investment office, which manages the school's $7 billion-plus endowment, said the fund is still holding "a lot" of its exposure to the country through its private market portfolio.

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The Daily Benchmark:
2013 Vintage Global VC Funds

Median IRR

17.10%

Top Quartile IRR

24.07%

1.16x

Median DPI

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SunBridge Partners JJV Fund

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People

Iconiq Growth hired former Johnson & Johnson CEO Alex Gorsky as a general partner focused on healthcare technology.

Middle-market PE firm Blue Wolf Capital Partners hired William MacColl as director of investor relations. MacColl previously served as director of North America investor relations at European PE firm IK Partners.

London-based Cap10 Partners picked Luca Bonanomi as partner. Bonanomi was formerly a managing director with Blackstone's European PE group.

VC Deals

Plant-based protein producer Meati Foods raised $100 million in Series C1 funding led by Grosvenor Food & AgTech.

Voyage Foods secured a $52 million Series A led by Level One Fund and Horizons Ventures. The California-based startup manufactures cocoa-free chocolate.

TXOne Networks, a Taiwan-based cybersecurity company, extended its Series B with $51 million led by TGVest Capital.

Rad AI, a startup based in San Francisco that creates generative AI tools for radiologists, raised a $50 million Series B led by Khosla Ventures.

Xtend, an Israeli defense-tech startup, raised a $40 million Series B led by The Chartered Group.

NIL Technology, a Danish developer of optical components, has raised €29 million from investors including Jolt Capital and NGP Capital.

Sesame, a Spanish provider of HR software, has secured €23 million in a round led by GP Bullhound.

Insempra, a Munich-based provider of sustainable ingredients for the beauty and food industries, has closed a $20 million Series A from investors including EQT Ventures, BlueYard Capital and Bayern Kapital.

PE Deals

Bain Capital is in talks to acquire California-based PowerSchool in a deal that could value the edtech company at around $6 billion, including debt, The Wall Street Journal reported.

Thomas H. Lee Partners acquired Agiliti, which provides medical equipment management and services to the healthcare industry.

Silver Oak Services Partners led the recapitalization of Illinois' Beary Landscaping, which offers landscaping and snow removal services.

Private credit firm Brightwood Capital Advisors supported Mill Point Capital's acquisition of Proficium, which manufactures copper and fiber-optic cables and transceivers.

CVC Capital Partners invested in Hempel Group, a Denmark-based supplier of marine coatings. The investment will equate to a stake in the business of up to 30% over time.

Exits & IPOs

Samsung Medison, a medtech company majority owned by Samsung Electronics, acquired VC-backed Sonio, a French ultrasound AI developer, for 126 billion South Korean won (about $92 million).

Flashtract has been acquired by NYSE-listed Trimble for an undisclosed amount. The billing automation platform startup was last valued at $60 million in 2021.

Onna Technologies, a data management software specialist, has been acquired by Reveal Data for an undisclosed amount. Onna was valued at $148 million in 2021.

Sterling Investment Partners struck a deal to acquire Tampa-based Verdantas from Round Table Capital Partners, which will maintain a stake in the environmental consulting firm.

TPG Rise Climate agreed to buy Long Beach, Calif.-based fuel storage company Olympus Terminals from Davidson Kempner and Intrepid Investment Management.

Fundraising

Silver Lake wrapped up its seventh flagship fund with $20.5 billion to target big tech bets. The fund's predecessor closed on $20 billion in 2020.

European PE firm Innova Capital closed its seventh fund on €407 million to invest in sectors including business and financial services, industrials, and consumer.

Arjun Infrastructure closed its latest Europe fund on €1.1 billion, with an additional €300 million allocated to its co-investment program. Launched in 2022, the fund is the successor to the €1 billion Infrastructure Alliance Europe 1.

Chart of the Day

Source: General Catalyst, a16z capture 44% of US VC fundraising in 2024

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VC-backed companies narrowly guard valuations

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