Charting digital infrastructure's rise and future

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The Daily Pitch: VC

July 23, 2024

Presented by Fidelity Private Shares^SM

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

Our analysts map fundraising and performance trends in the digital infrastructure market

Does Iconiq Growth's $5.75 billion fund coincide with a comeback for venture growth?

Our latest market map highlights the startups modernizing insurance paperwork

Our Q2 2024 US PE Breakdown unpacks the trends pointing toward a recovery for the strategy

Today's Top Stories

3 charts explain Iconiq Growth's record-breaking $5.75B fund

(Jordan Lye/Getty Images)

Iconiq Growth, the venture arm of wealth management firm Iconiq Capital, has closed its seventh flagship fund on $5.75 billion.

The vehicle launches Iconiq into the ranks of the elite VC firms that have raised mega-funds in 2024 despite a desolate LP fundraising environment.

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Charting digital infrastructure's rise and future

Investment in the digital infrastructure market is on the rise. About $800 billion in commitments have been made to private funds with exposure to data centers and telecom infrastructure over the past decade—with specialist digital infrastructure funds representing a larger share in recent years.

Government initiatives, coupled with digitalization of the global economy, have paved the way for growth in the sector—and with AI energizing the need for data centers, the space is poised for greater expansion. Our latest analyst note covers the key drivers and what may be on the horizon.

read it now

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A message from Fidelity Private Shares

Unlocking startup success: cap table optimization & runway extension

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.

Register now

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Market Map: Meet the startups tackling insurance paperwork

(Drew Sanders/PitchBook News)

VC dealmaking in the insurtech industry is at multi-year lows, but recent mega-deals show investors remain cautiously engaged in the sector.

Our latest market map highlights the startups modernizing the administration and claims process within the insurtech space. As traditional insurers continue their digital transition and look to cut costs and boost output, the sector is poised for growth.

explore the market map

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VC investors' leverage may have peaked

(Drew Sanders/PitchBook News)

It's still an investor-friendly environment for VCs, but their advantage may have peaked in the first half of 2024, according to PitchBook's VC Dealmaking Indicator. Conditions have improved for founders raising capital at all stages, with our early-stage index showing the largest move.

Valuation step-ups have stagnated, while the quarterly capital raised by startups is at a two-year high—signaling that investors may soon face a more challenging environment. The demand-to-supply ratio is down due to large AI deals, which show investors will still pay up for select companies.

explore the indicator

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PE dealmaking rebound provides glimpses of hope

More than halfway through the year, the US PE industry has finally shown some promising signs.

Total deal activity in H1 2024 increased 12% year-over-year. The uptick accompanies a rise in exit activity, which also rebounded from the more-than-a-decade lows seen in the last two years. GPs employed a variety of strategies to break the exit logjam, including outright sales with minority roll-overs, continuation funds and partial exits.

Our Q2 2024 US PE Breakdown, sponsored by Weaver, looks into the latest trends that herald a recovery for the PE market.

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Since yesterday, the PitchBook Platform added:

14

VC valuations

2019

People

669

Companies

38

Funds

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The Daily Benchmark:
2015 Vintage North American Real Assets Funds

Median IRR

12.40%

Top Quartile IRR

16.80%

1.33x

Median DPI

Select top performers

Carnelian Energy Capital

Lime Rock Partners VII

Blackstone Energy Partners II NQ

*IRR: net of fees

26 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

VC Deals

Cohere, a Toronto-based company that develops large language models, raised a $500 million Series D led by PSP Investments. The round values Cohere at $5.5 billion, Bloomberg reported.

Monarch Tractor, an agricultural robotics startup developing smart tractors, raised a $133 million Series C led by Astanor and the HH-CTBC Venture Capital Partnership.

Coast, a New York-based startup developing a platform to facilitate fuel and fleet spending, raised a $40 million Series B led by Iconiq Growth.

Linx, an Israeli startup developing technology using AI for identity management related to cybersecurity, raised $33 million over two rounds—the first led by Cyberstarts and the second with Index Ventures as a lead investor.

Maurten, a Swedish sports nutrition company, raised €20 million in a round led by IRIS Ventures.

NPC Labs, a startup helping developers scale video games across blockchain networks, raised an $18 million round led by Pantera Capital.

Don't miss our upcoming webinar

2024 has sparked VC optimism, with improvement in deal values and startup valuations. Although European VC hasn't gained significant momentum, resilient dealmaking across various industries, along with a better fundraising environment, signals a potential turning point. However, liquidity pressures persist and continue to affect sentiment.

Industry experts and PitchBook analysts will share findings from our Q2 2024 European Venture Report, sponsored by J.P. Morgan, shedding light on developments that should be on every investor's radar.

Exits show negligible signs of recovery due to tepid public listing markets.

Fundraising is in line with 2023 as smaller, emerging vehicles take a share of closes.

Register now to secure your spot.

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PE Deals

Mistral Equity Partners and Verlinvest have bought Krispy Kreme's majority stake in Insomnia Cookies for about $350 million. Krispy Kreme will retain a minority stake in the company.

MidEuropa agreed to acquire a controlling stake in Famar, a pharmaceutical contract development and manufacturing company, from ECM Partners and Metric Capital Partners.

MiddleGround Capital agreed to acquire Germany's Stemmer Imaging, a machine and artificial vision solutions provider, in a take-private deal that values the company at €312 million. The offer of €48 a share represents a 41% premium to Stemmer's average value over the past three months.

L Catterton acquired a stake in Value Retail, the holding company that owns designer outlet Bicester Village in the UK, from Hammerson for £1.5 billion, according to reports. The deal is expected generate £600 million in cash proceeds for Hammerson to pay down debt.

Abu Dhabi's Mubadala is buying a majority stake in Bugaboo, an Amsterdam-based maker of children's strollers, from Bain Capital in a deal that values the brand in the hundreds of millions of pounds, the Financial Times reported.

KKR agreed to acquire a majority stake in Accountor Software, a provider of cloud financial management and human capital software in Finland and Sweden, from Vitruvian Partners.

Ardian acquired a majority stake in Italy's Masco Group, a pharmaceutical company that sells purified water systems and other products for the life sciences industry.

Investindustrial is planning to acquire Piovan, a publicly traded Italian provider of ancillary equipment and services to the plastics industry. The firm has agreed to acquire 58% of the share capital at €14 a share, representing a market value of €716 million.

Vodafone sold a further €1.3 billion stake in Vantage Towers, an European mobile tower operator, to a group led by Global Infrastructure Partners and KKR.

Issuu, a company developing a digital publishing platform, was acquired by PE-backed Bending Spoons.

Exits & IPOs

Blackstone is considering a sale of its minority stake in British marketing firm HH Global, valuing the company at £2 billion to £2.5 billion, Bloomberg reported.

Panera Brands, backed by PE firm JAB Holding, is exploring a sale of its bagel brands including Einstein Bros and Bruegger's Bagels, as well as Caribou Coffee, Reuters reported.

Rowan TELS, a company developing AI-powered legal services to help professionals produce patents for intellectual property, has been acquired by NYSE-listed Clarivate.

Fundraising

Asterion Industrial Partners held a first close of its third infrastructure investment fund on €1.5 billion, Infrastructure Investor reported. The Madrid-based firm has reached roughly 50% of its €3.2 billion target.

Lead Ventures, a Budapest-based venture investment firm, launched a €100 million early-stage fund to target startups in Central and Eastern Europe.

Chart of the Day

Source: Q2 2024 European Venture Report

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