PitchBook News - VCs still wary of fundraising

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The Daily Pitch: VC

June 5, 2024

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

Survey finds many VCs are backing away from raising new funds

Generative AI applications keep investors at a recent conference bullish on fintech

Our latest Country Snapshot breaks down trends in France's public and private markets

Alaska's private markets investment strategy goes against the current with slow and steady approach

AI and digital biology dominated discussions at the SynBioBeta 2024 conference

Today's Top Stories

13% of VCs aren't planning to raise another fund

(Construction Photography/Getty Images)

Thirteen percent of venture GPs don't plan to raise another fund as the LP pullback spoils fundraising efforts, according to PitchBook's latest VC Tech Survey.

That's double the rate in H1 2023, when 6% said they had no plans to raise another fund.

Nearly half of venture firms—44% of those surveyed in mid-2023—had previously pushed back their plans to reenter the fundraising process.

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Around the fintech watercooler

Fintech investors remain bullish on dealmaking this year, if the tenor of conversation at FinovateSpring 2024 was anything to go by. More startups are cropping up to apply generative AI to fintech, particularly for operations efficiency and combating fraud: Cascading AI, Kobalt Labs and Blee are taking advantage of the AI limelight.

Even consumer-focused solutions are in growth mode: Our analyst note offers a snapshot of solutions providers like Remynt and Bloom Credit, which are capturing investor attention despite a year of heightened consumer-fintech jitters.

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Turned down in a downturn: Funding gap grows for underrepresented founders

Access to early-stage capital grew even more difficult in the past year. DocSend's 2024 Funding Divide Report shows historically underrepresented founders were hit hardest by the slowdown. As some optimism returns to the fundraising marketplace, will these founders be the slowest to feel the turnaround?

Get a first look at the report

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France's private market woes persist

Private market activity started off slow in France this year, with PE and VC deal count down in Q1. Exits across both asset classes have been muted, and the country has yet to see a public listing from either side in 2024, according to our France Market Snapshot.

France's economy showed signs of improvement in Q1 as GDP grew and inflation fell, but the country's budget deficit came in above target at 5.5% of GDP in 2023, increasing from the year before. The CAC 40—France's main stock market index—is up 9% year to date.

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AI, digital biology take center stage at SynBioBeta 2024

The synthetic biology industry is plotting a digital transformation with generative AI leading the charge. Senior biotech analyst Kazi Helal covers this and other takeaways from the recent SynBioBeta conference—while also providing an overview of key players and trends in the synthetic biology space.

With speakers including renowned VC investor Vinod Khosla, human genomic researcher Craig Venter and early AI developer Stephen Wolfram, the conference wasn't short on insights.

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Has Alaska's investing strategy been too risk-averse?

(Julia Midkiff/PitchBook News)

Alaska's nearly $80 billion sovereign wealth fund has long chosen stability of returns over outperformance, but slow and steady doesn’t always win in the investing race.

Last week, the Alaska Permanent Fund increased its PE target by 3 percentage points, freeing up capital to take advantage of a recovering market and bring its actual allocation back into Alaska’s board-mandated range. But some endowment veterans say Alaska may be missing out on returns.

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VC valuations

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28

Funds

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2018 Vintage Global Secondaries Funds

Median IRR

22.39%

Top Quartile IRR

26.70%

0.31x

Median DPI

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VCFA VP VI

Glouston Private Equity Opportunities VI

ICG Strategic Equity Fund III

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People

Luminate Capital Partners, a San Francisco-based PE firm investing in SaaS companies, has promoted Lucy Li to partner. Li formerly worked at Meta, Genstar Capital and JP Morgan.

VC Deals

Enterprise generative AI startup Cohere, based in Toronto, has raised $450 million from investors including Nvidia, Salesforce Ventures and Cisco, Reuters reported.

Swedish heat pump startup Aira has secured €200 million in debt financing from BNP Paribas.

Sword Health, which provides virtual physical therapy powered by AI, raised a $30 million round that brings the company to a $3 billion valuation. An additional $100 million of employee equity has been sold to existing investors.

Canadian surveillance camera specialist Vosker has received $125 million in debt led by the Royal Bank of Canada.

Storyblok, an Austrian provider of a content management system, secured an $80 million Series C led by Brighton Park Capital.

Vilya, a Seattle-based biotech startup, raised an expanded $71 million Series A led by Arch Venture Partners, with NVentures, Menlo Ventures and others participating.

San Francisco-based Twelve Labs, which develops an AI-powered tool for searching within videos, raised a $50 million Series A led by NVentures and NEA.

Germany's Re:cap, a financing and data insights specialist, has received a $14.6 million Series A led by Entree Capital.

Amsterdam-based recruitment AI startup Carv has raised $10 million from investors including Global Founders Capital.

PE Deals

Advent International is looking for bidders for its stake in the software arm of real estate lender Aareal Bank, Bloomberg reported. Advent could seek an equity value of at least €3 billion, according to the report.

Blackstone is in exclusive talks to buy Village Hotels, a UK-based hotel chain, Sky News reported. Sixth Street and Aermont were also interested in acquiring the business.

London's Freshstream agreed to acquire Worldstream, a Netherlands-based data center operator.

Molecular imaging company Sofie Biosciences received a growth investment from Trilantic North America.

Massachusetts-based TeachTown, a company developing tools for students with disabilities, was sold to L Squared Capital Partners by Bain Capital Double Impact.

Consortium Brand Partners has acquired formerly VC-backed fitness apparel company Outdoor Voices.

Exits & IPOs

An investor group led by Blackstone partner David Blitzer is working with Lazard to seek out buyers for German soccer team FC Augsburg, Bloomberg reported. The potential sale could value the club at more than €150 million, according to the report.

Databricks has agreed to acquire open-source data management startup Tabular. Databricks will pay more than $1 billion, according to reports.

The autonomy division of Xwing, an aerospace and defense startup that has received an official project designation from the Federal Aviation Administration, has been acquired by NYSE-listed Joby Aviation.

Grail, a company developing blood tests for cancer, will be going public after its acquisition by Illumina was shut down by the FTC in 2023. Prior to the acquisition, Grail raised more than $2 billion in VC funding.

Action Face, a startup creating avatars with AI that has partnered with NBA research and development incubator NBALAB, has been acquired by Infinite Reality.

Fundraising

Nasdaq-listed Cisco's VC arm launched a $1 billion fund targeted at AI startups. Cisco has made investments in Cohere, Mistral AI and Scale AI via the new fund.

Bay Area-based VC firm WndrCo has raised a $460 million fund. WndrCo's previous investments include 1Password, Figma and Airtable, and the firm prefers to act as a lead investor.

New York-based PE firm MFG Partners has closed its first fund on about $299 million. MFG prefers to invest in family- and founder-owned companies in the industrial and manufacturing sectors.

Chart of the Day

Source: Q1 2024 US VC Valuations Report

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PitchBook News - VCs still wary of fundraising

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