PitchBook News - Old VC funds, new tricks

Read online | Don't want to receive these emails? Manage your subscription.

Log in

The Weekend Pitch

July 21, 2024

Presented by the U.S. National Science Foundation

(Smith Collection/Getty Images)

I recently bought a secondhand road bike for the summer.

That was after weeks of searching for deals, weighing different models and figuring out a fair price. But as the weather got warmer, more buyers were actively looking. It was much trickier to find a good deal in June than it would've been in February.

The market for secondhand stakes in VC-backed startups is moving in a similar direction. It isn't quite as easy for investors to pick up shares in startups as cheaply as they became accustomed to in the past year or so.

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

A confluence of trends has been heating up the secondary market: Several investors have assembled new and larger secondary funds, private markets sentiment is improving, and sellers are coming back down to Earth on pricing.

On Monday, Sequoia reportedly offered to buy up to $861 million worth of Stripe shares from investors in earlier Sequoia vehicles, in a nod to the acute pressure from LPs to get liquidity out of aging VC funds. Sequoia told LPs it would buy the shares at a $70 billion valuation—a significant bump up from the $50 billion valuation the fintech company logged in its last funding round.

And it's not just Stripe. Across the board, secondary sales are no longer coming with price markdowns as sharp as before. The median startup valuation discount to the previous round stood at 46% in December 2023. By June, that had dropped to a 31% discount.

Trivia

Earlier this week, The Carlyle Group and KKR teamed up to buy a roughly $10 billion portfolio of student loans from which company?

A) Discover
B) Chase
C) Capital One
D) Citi

Find your answer at the bottom of The Weekend Pitch!

AI gives European VC a boost

(Alexander Spatari/Getty Images)

European VC dealmaking ticked upward in the second quarter amid a recovery in valuations. AI deals saw notable growth, doubling in total value from Q1 to €4.2 billion, according to our Q2 2024 European Venture Report, sponsored by J.P. Morgan. In all, AI companies pulled in €6.3 billion in H1, making it the most-active sector after SaaS.

While there were some bright spots in the IPO market—including the listing of Dutch robotics company RanMarine Technology and Swedish fintech specialist GreenMerc—the exit market remains mixed. So far this year, acquisitions have accounted for 85.6% of VC-backed exit value.

Fundraising in H1 totaled €9.4 billion, with the France and Benelux region accounting for the largest share of capital raised, displacing the UK and Ireland for the first time since 2018.

PE comes to the aid of enterprise SaaS M&A

Our recent Emerging Tech Research covers the primary drivers of M&A's recovery in the enterprise SaaS industry. Kicking off regular updates on M&A activity across the sector, analyst Derek Hernandez highlights the stabilizing factors as dealmaking settles into a new normal, starting with PE and leveraged buyouts.

The analyst note also covers key segments in the space and maps trends across six years of data—providing a view of where M&A activity has been and where it may be going.

Climate-tech fundraising bounces back

(Fhm/Getty Images)

Fundraising for climate-tech companies is on the upswing in 2024, with fund value already on track to exceed numbers from 2023, according to our recent Emerging Tech Research. While 2022 marked a peak in climate-tech investment, the decline over the last two years is largely a part of wider VC deal trends and not necessarily indicative of the strength of climate tech itself.

Eighteen climate funds have closed so far in 2024, with five exceeding $300 million each. Emerging firms still make up over half of VC climate-tech investors so far in 2024, though the ratio of experienced to emerging firms is becoming more balanced as new climate regulations see widespread acceptance.

Quote/Unquote

"We see that the beginning of this recovery has started. And our view is that we are in one of the most attractive, opportunistic and asymmetric domestic environments that we have ever lived through."

—Stephanie Sirota, RTW Ventures' chief business officer, speaking to PitchBook about the outlook for biotech startups.

Stay tuned

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

Q2 2024 Global M&A Report
Analyst Note: Digital Infrastructure in 2024
Q2 2024 Foodtech Public Comp Sheet and Valuation Guide

Trivia

Answer: A)

The Carlyle Group and KKR agreed to purchase the student loans portfolio from Discover Financial Services. It's PE firms' latest move into asset-based finance. Read more about the deal and what trends it signifies.

This edition of The Weekend Pitch was written by Rosie Bradbury and Jacob Robbins. It was edited by Clarinda Simpson and Alexander Davis.

Were you forwarded The Weekend Pitch? Sign up at pitchbook.com/subscribe.

Since yesterday, the PitchBook Platform added:

77

People

46

Companies

See what our data software can do

About PitchBook | Terms of use | Advertise with us | Contact

This email was sent to you via the PitchBook Platform.

Do you want to change your email address, get a different edition or unsubscribe? Manage your subscription here.

PitchBook Data Inc., 901 Fifth Avenue, Suite 1200, Seattle WA 98164, United States

PitchBook News - Old VC funds, new tricks

Trivia

AI gives European VC a boost

PE comes to the aid of enterprise SaaS M&A

Climate-tech fundraising bounces back

Quote/Unquote

Stay tuned

Trivia

Older messages

213 climate tech funds: a deep dive

Pressure mounts for gaming exits

AI helps boost European VC

Biotech stocks drive hybrid VC funds

VC's $1.2 trillion problem

You Might Also Like

Hack retention like unicorns do

The Profile: The CEOs attending psychedelic retreats & the crypto founders getting ‘debanked’

🤔A lingering suspicion...

Marketing Weekly #211

Salesforce Now Hiring 2,000 Sales Execs To Sell AI

Sunday Thinking ― 12.22.24

Chokepoints in the AI boom

Brain Food: The Right Grip

🤖 Google Search “AI Mode” Dropping Soon

🦄 12 spicy takes