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The Daily Pitch: VC

June 27, 2024

Presented by Microsoft for Startups

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We would also like to hear what the term "ESG" means to private market participants and whether concessionary returns are implicit in impact investing. We invite you to share your firm's approach.

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Today's Top Stories

Handicapping the AI horse race

And they're off: OpenAI, Anthropic and the other huge foundational model providers have emerged as the thoroughbreds of the current AI craze—raising the largest sums, besting the big tech giants' models and attracting investor attention in the secondary market.

Our latest Emerging Tech Research sizes up the key players, handicapping the horse race and investment opportunities. Senior Analyst Brendan Burke tracks commercial and technical progress for each major startup in AI research.

read it now

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Point 41 raises $300M to capture new managers' middle-market success

(vchal/Getty Images)

Middle-market manager Point 41 Capital Partners has logged $300 million in capital commitments to its debut fund, according to regulatory filings.

While emerging managers have struggled to raise capital relative to established managers in the broader PE market, the middle market has proven to be a sweet spot for GPs with three or fewer funds under their belts.

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A message from Microsoft for Startups

Founders & investors go niche and earlier in AI

Venture investment in AI continues to remain resilient amid market volatility. Worldwide, close to 1,800 transactions have closed thus far in 2024 for an aggregate of $21.1 billion. This frenetic level of competition has prompted founders and investors to move upstream in the AI ecosystem, as detailed in Microsoft for Startups' latest report: AI in the Early-Stage Venture Ecosystem. The report maps out key trends defining early-stage dealmaking against macro context, including:

What financing metrics at the early stage reveal for valuations and deal sizes
Where business opportunities lie in budding regulations and increasingly costly technical hurdles
The role of corporate and nontraditional players for deals and partnerships

Read it now

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Infrastructure shines bright among other real assets

In Q1 2024, real assets fundraising was light—but by no means stagnant—reaching $26.8 billion following an active Q4. The capital raised was overwhelmingly allocated to infrastructure vehicles due in part to their dependable cash flows amid the high interest rate environment, while other sectors like oil and gas experienced a decline, according to our Q1 2024 Global Real Assets Report.

After a massive $106.8 billion in Q4 commitments, a natural fundraising lull occurred in Q1, leading to a 74.9% quarterly drop in raised capital.

Of the 13 infrastructure funds that closed, nine were core, core plus or debt vehicles, indicating some preference for lower-risk, lower-return strategies.

While natural resources are seeing more activity in the public markets, private investors continue their pivot away from the sector following peak prices reached around the global financial crisis.

read the report

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A collaborative approach to boosting enterprise SaaS

VC dealmaking in the enterprise SaaS market has leveled out. Deal value settled at $12.2 billion in Q1—a 15.5% drop from the previous quarter—while deal count ticked up around 3% to 666.

In our recent Emerging Tech Research, senior analyst Derek Hernandez highlights how startups in the emerging analytics collaboration space are innovating—allowing business intelligence to be enhanced by enabling users to share insights across a wide spectrum of perspectives. The report also highlights the startups in that space, like Deepnote, that are attracting investor attention.

read it the preview

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PE turns to the art of the boomerang

(Jenna O'Malley/PitchBook News)

Private equity's newest favorite acquisition target isn't a bird or a plane—it's a boomerang.

A quarter of the take-privates that occurred in the first three months of 2024 were what we call boomerangs—when a PE firm buys a listed company shortly after it has gone public—and we can expect to see more of them. The big draw: Buying A+ assets at attractive valuations.

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Since yesterday, the PitchBook Platform added:

12

VC valuations

2359

People

618

Companies

44

Funds

See what our data software can do

The Daily Benchmark:
2016 Vintage Global Funds-of-Funds

Median IRR

17.38%

Top Quartile IRR

20.93%

0.53x

Median DPI

Select top performers

Spectra Investments III

Glouston Ohio Midwest Fund III

Drum Special Situation Partners IV

*IRR: net of fees

44 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

VC Deals

Formation Bio, a New York-based company using AI to streamline clinical drug trials, raised a $372 million Series D led by Andreessen Horowitz. Formation is now valued above $1 billion, TechCrunch reported.

Sidecar Health, a health insurance company providing coverage plans to businesses, raised a $165 million Series D led by Koch Disruptive Technologies.

A24, an Oscar-winning indie film studio, raised $100 million led by Thrive Capital, valuing the company at $3.5 billion, according to reports.

Fetcherr, which offers an app for dynamic air travel pricing, raised a $90 million Series B led by Battery Ventures.

Stability AI, a London-based generative AI startup, raised $80 million from investors including Greycroft and Lightspeed, The Wall Street Journal reported.

Samsara Eco, an Australia-based startup creating resin materials free of fossil fuels in order to replace plastic, raised a $65 million round led by Temasek and Main Sequence.

Climate X, a London-based climate risk intelligence specialist, closed an $18 million Series A led by GV.

Sirona Technologies, a Brussels-based direct air capture startup, secured a €6 million seed investment led by LocalGlobe and XAnge.

PE Deals

KKR has acquired a multifamily portfolio worth about $2.1 billion from real estate development company Quarterra Multifamily.

Cdata, a North Carolina-based company developing data integration software, secured a $350 million investment from Warburg Pincus.

Create Music Group, a company providing music distribution, publishing and branding services to independent artists, received a $165 million investment from Flexpoint Ford.

Caerus Oil and Gas, an operator of wells, gas and water pipelines in the Rocky Mountain region, has been acquired by Quantum in a deal valuing Caerus at $1.8 billion.

Vitruvian Partners has acquired an additional stake in Civitatis, an online marketplace for guided tours and activities for Spanish and Portuguese-speaking consumers, for $50 million.

MedVet, an emergency and specialty veterinary care provider, received a minority investment from Leonard Green & Partners.

Village Hotels, a UK-based hotel chain, has been acquired by Blackstone's real estate arm from KSL Capital Partners.

Portfolio Companies

Rivian, a formerly VC-backed electric vehicle developer, will receive a $5 billion investment from Volkswagen as the two companies work jointly on new EV technology.

Exits & IPOs

Hyperplane, a startup developing foundation models to build personalization layers for banks, will be acquired by Brazil-based Nubank.

European bank UniCredit has submitted a bid for Luminor, a Blackstone-owned bank based in Estonia, Bloomberg reported. Hungarian lender, OTP Bank, has also made a competing bid.

Solera, a company providing data about vehicle life cycles to automotive dealers and insurers, is planning to file for an IPO at a valuation of around $1 billion, Bloomberg reported.

Lineage, a company that specializes in temperature-controlled storage, is seeking to raise around $3 billion in its IPO, Bloomberg reported.

Valor Environmental, a company providing erosion management services commercially and to homeowners, has been acquired by NYSE-listed Markel Group.

Fundraising

Redpoint Ventures has raised $740 million for the firm's fifth VC fund, according to SEC filings.

Meadow Partners, a New York-based PE firm, has raised $530 million for its latest PE fund. Meadow primarily invests in middle-market real estate.

DTCP, a German investment manager, has raised $450 million across its third growth equity fund and its new B2B early-stage vehicle.

Curie.Bio, a VC firm investing in healthcare and biotech startups, closed its latest fund on $380 million. The fund will be used to target Series A VC investments.

Chart of the Day

Source: 2024 Australia & New Zealand Private Capital Breakdown

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PitchBook News - Handicapping the AI horse race

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