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The Daily Pitch: VC

July 22, 2024

Presented by Fidelity Private Shares^SM

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

Three charts from the latest PitchBook-NVCA Venture Monitor highlight the difficult landscape for VC newcomers

Our analysts examine how PE sustains enterprise SaaS M&A

Fund-of-funds investor LTV raises $30 million for its flagship venture multimanager model

In the first half of 2024, 3% of all VC funds were dedicated to investing in climate startups

Shorter holding periods and increasing exit value are promising signs for PE

Today's Top Stories

3 charts: Tough times for venture newcomers as larger funds dominate

(Jordan Lye/Getty Images)

While global VC fundraising is on track for its worst performance in nearly 10 years, the pain isn't being felt equally. First-time and emerging managers are facing their worst environment since 2014, while capital continues to become more concentrated among an elite few.

Three charts from the latest PitchBook-NVCA Venture Monitor highlight the difficult landscape for VC newcomers.

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PE comes to the aid of enterprise SaaS M&A

Our latest 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.

read it now

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A message from Fidelity Private Shares

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Join Fidelity Private Shares for a conversation with industry experts as they delve into essential strategies for cap table optimization, effective fundraising models, and capital efficiency techniques.

In this virtual session, they'll cover how to structure a cap table for better growth and investor relations, best practices for building an investor and fundraising pipeline, as well as how to manage cash flow and fundraising cycles to help extend runway.

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Fund-of-funds downturn? No problem, says duo of ex-Anthemis VCs

(J Studios/Getty Images)

The fact that VC-focused funds-of-funds have fallen out of favor is exactly what upstart LTV Capital is betting on.

LTV has raised $30 million for its flagship venture multimanager model, with a mandate of writing checks to emerging managers with less than $100 million in assets under management.

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LPs bet on climate VC funds in energy transition

Bill Gates' Breakthrough Energy Ventures has helped to popularize climate VC funds. (Drew Angerer/Getty Images)

Institutional investors are increasingly leaning into specialist VCs for exposure to next-generation climate tech.

In the first half of 2024, 3% of all VC funds were dedicated to investing in climate startups. These hyper-focused funds require patient LPs that can stomach the risks of developing costly solutions to real-world problems.

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PE hold periods decline, signaling improved exit activity

(Carterdayne/Getty Images)

A year-over-year increase in exit value and a declining median holding period are promising signs of a potential recovery in PE exits. But some data indicates the long-awaited recovery still faces a barrage of setbacks.

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Since yesterday, the PitchBook Platform added:

1

VC valuations

186

People

53

Companies

4

Funds

See what our data software can do

The Daily Benchmark:
2016 Vintage Global Secondaries Funds

Median IRR

23.49%

Top Quartile IRR

31.52%

1.51x

Median DPI

Select top performers

LTO Fund

ICG Strategic Secondaries Fund II

Industry Ventures Special Opportunities Fund III

*IRR: net of fees

26 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

VC Deals

Saronic, an Austin-based defense-tech startup, raised a $175 million Series B at a $1 billion valuation in a round led by Andreessen Horowitz.

Slope, a San Francisco-based B2B payments specialist, raised $65 million in debt and equity led by JP Morgan Payments.

GRO Biosciences, a Boston-based biotech startup which focuses on amino acids for protein therapies, raised a $60.3 million Series B co-led by Atlas Venture and Access Biotechnology.

Rona Therapeutics, a Shanghai-based nucleic acid research specialist, raised a $35 million Series A+ led by LongRiver Investments.

Arrcus, a hyperscale networking startup, raised $30 million in new funding from General Catalyst, Nvidia, Lightspeed and others.

Freshpaint raised a $30 million Series B led by Threshold. The San Francisco-based company offers a healthcare data privacy and analysis platform.

Q Bio, a clinical diagnostics startup, raised $27 million from investors including Khosla Ventures, Andreessen Horowitz and Founders Fund, according to reports.

Nearby Computing raised €6.5 million in a Series A led by Walter Ventures and JME Ventures. The Barcelona-based company offers a platform for edge computing orchestration and automation.

Wamo, a London-based startup that provides digital accounts for small and medium-sized enterprises, raised $5 million in a round that includes new investor Logo Ventures.

Lumen, a Romanian startup developing smart glasses for people with limited vision, raised €5 million.

PE Deals

Province, an adviser that works within the field of bankruptcy consulting and turnaround, has been acquired by Trivest Partners, The Wall Street Journal reported.

Tikehau Capital has made an investment in Lenox Park Solutions, a software company that provides tools for impact investing.

Software and technology investor Diversis Capital, has acquired Infotech, a SaaS provider for the construction and inspection industries.

Smartsheet, a workplace collaboration software provider, has attracted buyout interest from the likes of Qatalyst Partners, Reuters reported.

Bain Capital, Permira and Veritas Capital are among the remaining suitors looking to acquire EQT-owned school operator Nord Anglia.

Clearlake Capital Group-backed BBB Industries, a sustainable manufacturer for the industrial and energy markets, acquired Atlantic Street Capital-backed All Star Auto Parts.

Exits & IPOs

VC-backed 3D design software company Manycore Tech is seeking to raise as much as $200 million as it looks to file for a Hong Kong IPO, Bloomberg reported.

Equistone Partners sold Dutch mobile perimeter protection company Heras to industry peer Garda Group and exited OTTO Life Science Engineering to SPIE Group.

Ardian and Crédit Agricole Assurances agreed to sell a 49% stake in Italian airport operator 2i Aeroporti to Asterion.

Platinum Equity has sold the Hunterstown power generation facility, a combined-cycle gas turbine generating power plant, to infrastructure investor LS Power.

Fundraising

Metlife Investment Management launched its second PE fund with $1.2 billion in commitments.

Bregal Sagemount has reached its hard cap of $500 million for its first small-cap fund, The Wall Street Journal reported.

Prague-based ZAKA VC reached a €10.5 million first close of its latest fund, which has a target of €15 million.

Chart of the Day

Source: Q2 2024 PitchBook-NVCA Venture Monitor

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PitchBook News - 3 charts: Tough times for VC newcomers

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