PitchBook News - When LPs ride shotgun

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The Weekend Pitch

May 26, 2024

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

(Megan Woodard/PitchBook News)

More institutional investors than you might think are hungry for venture exposure—as long as co-investing rights are on the table.

I recently asked the CIO of a large public pension plan what terms they're asking for from new prospective venture managers, and getting into GPs' deal flow was what they cared about more than anything else.

What would bring this CIO to the table? "Fee-free, carry-free co-investing," the CIO said.

Co-investing rights give LPs the ability to acquire an equity stake alongside the GP, often through a sidecar vehicle. This direct access to deal flow allows allocators to concentrate their portfolio in specific companies or an emerging technology—generative AI, for instance.

Within the venture world, co-investing has taken off full steam.

This is The Weekend Pitch, and I'm Rosie Bradbury. You can reach me at rosie.bradbury@pitchbook.com or @_RosieBradbury on X.

Hardware acceleration drives VC returns in AI

(Comezora/Getty Images)

Investors are scattering bets widely in the AI market, but only one category has been a reliable producer of exits for VC-backed companies, our latest Emerging Tech Research explains.

The IPO of Astera Labs, which makes AI hardware for data centers, continued that trend in the first quarter with a towering revenue multiple. That debut followed last year's blockbuster IPO of semiconductor specialist Arm. And there's more to come: Chipmaker Cerebras, last valued at $4 billion, is readying an IPO.

Private fundraising's concentration problem

Private market fundraising is becoming increasingly concentrated among blue-chip players. In the first three months of 2024, total capital raised across private market strategies was on par with figures from the same time last year.

But total fund count has fallen 45.9% year over year with the majority of capital raised going to managers with funds valued above $1 billion. Our Q1 2024 Global Private Market Fundraising Report breaks down capital gathering across private market funds.

Crypto dealmaking springs back

(Yuichiro Chino/Getty Images)

Crypto dealmaking may finally be bouncing back, with quarterly deal value ticking upward for the first time since 2021. In Q1 2024, $2.4 billion was generated across 518 deals—quarter-over-quarter increases of over 40% and nearly 45%, respectively.

Senior analyst Robert Le highlights the factors pushing the sector forward, along with new areas of focus for investors, including startups specializing in data integrity and privacy as well as blockchain tech for social media.

Quote/Unquote

Scarlett Johansson at the 76th annual Cannes Film Festival
(Mike Coppola/Getty Images)

"When I heard the released demo, I was shocked, angered and in disbelief that Mr. Altman would pursue a voice that sounded so eerily similar to mine that my closest friends and news outlets could not tell the difference."

—Scarlett Johansson alleges in a statement that OpenAI copied her voice for its conversational AI system even after the actress declined to license it.

Stay tuned

Keep an eye out for these insights and research reports coming out this week:

Q1 2024 Medtech Report
Q1 2024 US Public PE Roundup
Q2 2024 Quant Perspectives: Private Equity

Trivia

(J Studios/Getty Images)

Answer: C)

Private equity firms acquired 16 US and Canadian fintech companies in Q1, according to PitchBook data. Read more about which subsectors are standing out to PE buyers.

This edition of The Weekend Pitch was written by Rosie Bradbury and Samantha Steele. It was edited by James Thorne and Ron Prichard.

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PitchBook News - When LPs ride shotgun

Trivia

Hardware acceleration drives VC returns in AI

Private fundraising's concentration problem

Crypto dealmaking springs back

Quote/Unquote

Stay tuned

Trivia

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VC's AI valuations cage match

VC's investor-friendly environment eases

VCs respond to our H1 2024 Tech Survey

A deeper dive into EV charging

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