Does OpenAI's new model change the game?

Europe's VC valuations bounce back; SoftBank commits to AI push; May Health secures $25M to combat infertility
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The Daily Pitch: VC
May 14, 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:
  • Analysts see a sunnier outlook for European VC valuations

  • OpenAI's GPT-4o could significantly alter the landscape of generative AI startups, investors say

  • SoftBank reports its second consecutive quarter of profit as it pivots to focus on AI
 
Today's Top Stories  
'A total game changer': VCs see AI's future beyond text after GPT-4o launch
OpenAI CEO Sam Altman (Joey Schaffer/PitchBook News)
OpenAI just unveiled its latest flagship AI model, GPT-4o, and investors think it has the potential to alter the generative AI landscape.

With the model's heavy focus on speech and video, many are saying it could be a game changer. Some though, aren't convinced.
read more
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European VC valuations rise again
The outlook for European VC valuations is turning more positive this year, as the median price tag rebounded across nearly all stages in the first quarter.

Only the median late-stage valuation saw a dip in Q1, according to our latest European VC Valuations Report, while deal sizes have swelled across the board. The percentage of down rounds has also stabilized, offering further good news for Europe's startup ecosystem. Median valuations for VC-backed exits are one of the weak points, but remain resilient.
read the report
 
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SoftBank commits to aggressive AI push after quarterly profit
(Charly Triballeau/Getty Images)
SoftBank Group plans to bet big on AI after reporting its second consecutive quarter of profit, but the firm still recorded a net loss of 227.6 billion Japanese yen (around $1.5 billion) for fiscal year 2023.
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'The Great Exhaustion': M&A insiders gather to sketch out PE recovery
The middle-market M&A community came together in record numbers to reflect on Q1 dealmaking and to share cautious optimism at the recent ACG DealMAX 2024. Attendees discussed the need for a PE exit recovery and how AI might affect each step of the M&A process.

In our latest analyst note, PitchBook's Jinny Choi shares strategies covered in the conference for solving the PE exit freeze caused by the downturn—called "the Great Exhaustion" by one panelist.
read it now
 
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Green steel dominates climate-tech deals in Q1
Even accounting for H2 Green Steel's mega-financing round of over $5 billion, climate-tech deals grew nearly 38% in Q1, buoyed by US federal investment in industrial decarbonization.

Infrastructure, industry and renewable battery deals are hot commodities and median pre-money valuations appear to be rising across the board, according to our recent Carbon & Emissions Tech Report. Climate-tech startups are rapidly developing more sophisticated approaches to permanent carbon-storage solutions, and investors are paying attention.
read the preview
 
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Squarespace goes private in $6.9B deal with Permira
(SOPA Images/Getty Images)
Squarespace has entered a $7 billion take-private deal with Permira that features debt capital from Blackstone, Blue Owl Capital and Ares Management. The transaction marks a potential increase of larger take-private deals in H2 2024.
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Since yesterday, the PitchBook Platform added:
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VC valuations
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People
635
Companies
26
Funds
See what our data software can do
 
The Daily Benchmark:
2013 Vintage Global Funds-of-Funds
Median IRR
15.68%
Top Quartile IRR
18.89%
1.08x
Median DPI
Select top performers
Glouston Ohio Midwest Fund II
Bay Hills Emerging Partners III
SwanCap Opportunities Fund I
*IRR: net of fees
54 Funds in Benchmark Â»
Check out the latest version of PitchBook Benchmarks
 
People  
Melinda Gates will resign as co-chair of the Bill & Melinda Gates Foundation in June after 24 years of leadership.
 
VC Deals  
Indian ecommerce company Meesho has secured $275 million from investors, according to an SEC regulatory filing.

Lycia Therapeutics, a San Francisco-based biotech startup, raised a $106.6 million Series C led by Venrock Healthcare Capital Partners.

New York-based Ajax Therapeutics, a company developing treatments for blood cancers, raised a $95 million Series C led by Goldman Sachs Alternatives.

CereVasc, a Massachusetts-based medtech startup, raised a $70 million Series B led by Bain Capital Life Sciences and Perceptive Xontogeny Venture Fund.

MetisX, a South Korean semiconductor specialist, raised $44 million in its Series A from investors including LB Investment, Industrial Bank of Korea and STIC Ventures.

Foodtech startup Pepper, based in New York City, raised a $30 million Series B led by Iconiq Growth.

May Health, a Paris-based startup developing treatments for polycystic ovary syndrome, raised a $25 million Series B led by Bpifrance and Trill Impact.

French space-tech specialist Infinite Orbits raised €12 million in a round led by Newfund Capital.

London-based childcare company Tiney closed a £7.2 million Series A led by Mustard Seed Partners.
 
Pitchbook webinar series: The Allocator's Atlas
The Allocator's Atlas is a specialized webinar series designed for LPs, where you'll gain valuable insights and expert perspectives to effectively navigate your investment strategies and portfolio management.

In our inaugural webinar, a panel of PitchBook analysts will provide insights on how macroeconomic challenges have affected private capital returns, capital call and distribution rates across asset classes, and the cash flow J-curves of PE funds more specifically. Key topics include.
  • An update on our latest fund performance benchmarks and PitchBook Private Capital Indexes returns.

  • Analysis of cash flow patterns by asset classes and what has driven their volatility.

  • What J-curves of recent PE fund vintages across strategies and fund sizes look like today and their potential future trajectories.
Register now to secure your spot.
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PE Deals  
Blackstone is preparing to make a tender offer to acquire I'rom Group, a Japanese pharmaceuticals company, in a deal valuing the company at roughly 35 billion yen (about $218 million), including debt.

Kinetik agreed to buy Durango Permian, a natural gas provider and processor in the Delaware basin backed by Morgan Stanley Energy Partners.

Oil and gas conglomerate Idemitsu has invested $114 million in HIF Global, which manufactures carbon-neutral liquid eFuels.

Haveli Investments has acquired Nasdaq-listed cybersecurity firm ZeroFox.

CapVest-backed cocoa supplier Natra is in talks to acquire German chocolate company Gubor Schokoladen and Italian chocolate-spread company Nutkao, Bloomberg reported.
 
Don't miss our upcoming webinar
Though investors continue to wait for European M&A to recover, robust refinancing activity shaped last quarter into leveraged loans' best since 2021. Join our panel of credit market experts to explore the ongoing surge of institutional loan issuance, bonds and CLOs, along with what they expect for Q2 and the rest of 2024. Key topics include:
  • CLO issuance hits its second-highest quarterly volume in the 2.0 era—will the surge in new transactions continue?

  • Will the syndicated loan market continue to take share from the private credit market?

  • M&A is starting to return, but will refinancings continue to dominate deal flow for both loans and high-yield bonds?
Register now to secure your spot.
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Exits & IPOs  
Chinese fast-fashion giant Shein is ramping up its plans for a London listing after its attempt to go public in New York received pushback from regulators. Reuters reported that it plans to file with the London Stock Exchange as soon as this month.

Gridrion Capital is working with investment bank R. W. Baird to gauge interest in a $1.5 billion sale of Good Sportsman Marketing Outdoors, an outdoor sports gear seller, Reuters reported.

Reneo Pharmaceuticals agreed to merge with novel precision oncology medicines company OnKure. As part of the transaction, Reneo will receive $65 million in PIPE financing from investors including Acorn Bioventures, Cormorant Asset Management and Surveyor Capital.
 
Fundraising  
London-based real estate investor Patron Capital closed its seventh flagship fund on €860 million, including over €200 million in discretionary co-investment capital.

Canadian firm Onex raised $735 million for a short-term buyout fund to invest in the upper middle market, Bloomberg reported.

Colorado-based growth equity firm NewVale Capital raised a $167 million fund to back pharmaceutical services providers.

Athens-based Apeiron Ventures has launched a €25 million fund that will target seed-stage startups in Europe.
 
Chart of the Day  
Source: Q1 2024 US PE Breakdown
 
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