PitchBook News - VC fundraising's split forecast

VC dealmaking levels out for gaming; how specialist VCs drive information security; are we in the eye of a golden vintage year?
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The Daily Pitch: VC
May 10, 2024
The Daily Pitch is powered by PitchBook’s industry-defining research and best-in-class data
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Today's Top Stories  
VC fundraising may not recover until the end of the decade
(Wong Yu Liang/Getty Images)
Venture capital firms enjoyed a windfall in 2021 and 2022, with assets under management swelling 58% from $2.4 trillion to $3.8 trillion.

But one of the principal drivers of that growth, fundraising, isn't projected to recover to recent highs until well after 2028.

VC firms are forecast to raise less than $200 billion in 2024, a 48% decline from 2021 levels. Fundraising is only expected to grow 2.9% annually through 2028, less than half the rate of other private capital strategies including private equity, private debt and real assets funds.
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VC dealmaking levels out for gaming
VC investment into gaming startups leveled out in Q1, with $1.3 billion invested across 153 deals, a quarter-over-quarter increase of 22.1% in deal value, but a decrease of just 0.6% in deal count.

Analyst Eric Bellomo lays out areas of opportunity for investors, including the AR/VR space, which has been turbocharged by high-profile raises like Rokid's $70.1 million Series C.

Web3 gaming, while still nascent, has seen renewed interest from investors, and startups developing new ways to present in-game advertising are generating buzz. Our Q1 2024 Gaming Report highlights the key deals and players, trends and emerging opportunities investors need to know.
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Q&A: 14Peaks Capital founder on the rise of the European solo GP
(OgnjenO/Getty Images)
The solo GP trend is catching on in Europe despite a difficult VC fundraising market.

We spoke to 14Peaks Capital founder Edoardo Ermotti about the challenges and opportunities facing solo GPs in the European market.
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Infosec's specialist VCs buckle down
Generalist VCs are leaving the information security sector to the specialist investors after piling in during 2021's highs. Our recent Emerging Tech Research shows that eight Q1 deals were down rounds, including unicorn BigID's $60 million Series E. On the other side of the coin, there were nine mega-deals, a tick up from seven the previous quarter.

Specialist early-stage investors grabbed big exit wins through outliers born from emerging trends, including Avalor and Gem's early-stage acquisitions.
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Are we in the eye of a golden vintage year?
(Julia Midkiff/PitchBook News)
LPs have heard it time and time again from their fund managers: The best vintages can arise from periods of market dislocation.

It's a concept rooted in some historical evidence of higher-than-normal private equity fund multiples for vintages in the years during or following economy-altering events. But is it applicable to the current market?

This article originally appeared in our Capital Pool newsletter, which features exclusive reporting and commentary on what's driving LP decision-making.

Subscribe here.
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VC Deals  
Holistic AI, a Paris-based generative AI startup, raised $200 million in debt and equity funding from investors including Accel, UiPath and solo investor Eric Schmidt, Bloomberg reported.

Monzo, a UK-based neobank, raised £150 million (about $190 million) in its latest round from investors including Hedosophia, CapitalG and GV.

Hysata, a green hydrogen startup based in Australia, raised a $111 million Series B led by BP and Templewater.

California-based biotech startup Attovia Therapeutics raised a $105 million Series B led by Goldman Sachs Alternatives.

Electric Hydrogen raised $100 million in corporate credit financing from HSBC.

DatologyAI, a Bay Area AI startup, raised a $46 million Series A led by Felicis Ventures.

Li Industries, a North Carolina-based climate-tech startup, raised a $36 million Series B led by Bosch Ventures, Khosla Ventures and LG Technology Ventures.

ArkeaBio, an agtech and biotech startup, raised a $26.5 million Series A led by Breakthrough Energy Ventures.

Dendra Systems, a UK-based provider of ecological restoration tools, has raised a $15.7 million Series B led by Zouk Capital.
 
PE Deals  
Blackstone is the front-runner to acquire UK-listed music rights company Hipgnosis Songs Fund after rival suitor Concord said it will not match the firm's $1.6 billion bid, the Financial Times reported.

Apollo Global Management has secured $1.1 billion in debt financing led by Barclays and BNP Paribas to facilitate its buyout of US Silica Holdings, Bloomberg reported.

Sony Music Entertainment is competing against Blackstone and KKR in its bid to acquire Infocom, a Japanese manga company, for approximately 200 billion Japanese yen (about $1.3 billion), Bloomberg reported.

NB Capital Solutions led the recapitalization of FDH Aero, an aerospace supply chain company backed by Audax Private Equity.
 
Exits & IPOs  
Who's Mailing What!, a formerly VC-backed direct mail platform, has been acquired by DirectMail2.0.

Aldrich Capital Partners has agreed to sell portfolio company Paymerang, a B2B payments automation provider, to NYSE-listed Corpay.

Indoor go-kart racing brand K1 Speed has acquired UK-based Capital Karts, which had previously received backing from Puma Private Equity.
 
Fundraising  
Encap closed its Energy Transition Fund II on $1.5 billion to invest in low carbon fuels and renewable energy businesses.

Los Angeles-based Vance Street Capital held the final close of its Fund IV on its hard cap of $775 million.

Investcorp closed its fifth technology fund on $570 million, exceeding its $500 million target. The vehicle will seek controlling stakes in companies with around $10 million or more in revenue.

Romanian VC firm Early Game Ventures launched a €60 million fund targeted at tech startups in central and eastern Europe.

97212 Ventures, a New York-based VC firm focused on Israeli tech startups, closed on a $20 million fund aimed at establishing Israeli founders in New York City.
 
Chart of the Day  
Source: Q1 2024 European PE Breakdown
 
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