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The Daily Pitch: VC

August 2, 2024

The Daily Pitch is powered by PitchBook’s industry-defining research and best-in-class data

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

DFJ Growth has rounded up more $1 billion for its fifth growth equity fund

Healthcare IT service provider R1 RCM has agreed to an $8.9 billion take-private that came despite a lull in PE deals in the sector

Our latest Global Markets Snapshot breaks down one month of trends in the equity, debt and commodities markets

A Canadian pension fund scored big on the sale of European credit manager Hayfin

Today's Top Stories

DFJ Growth banks over $1B for its latest growth equity fund

(Shannon Fagan/Getty Images)

DFJ Growth has rounded up over $1 billion for the firm's fifth growth equity vehicle—focusing on the ongoing push to supply capital to maturing startups working through a dismal exit environment.

The firm invests across a range of industries; its portfolio companies include Neuralink, Elon Musk's brain-computer interface specialist. Venture growth investors have been navigating seemingly favorable fundraising conditions even as the industry has struggled to provide returns to its LPs.

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R1 RCM goes private in $8.9B deal with TowerBrook, CD&R

(Roberto Machado Noa/Getty Images)

R1 RCM, a healthcare IT service provider, has agreed to a $8.9 billion take-private with TowerBrook Capital Partners and Clayton, Dubilier & Rice, after turning down overtures from an activist investor.

The pact comes amid a relative lull in PE healthcare IT deals, with PitchBook data showing dealmaking in Q1 2024 down 14.8% from Q4 2023.

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July wrap-up: One month in global markets

Our latest Global Markets Snapshot breaks down a month of trends in the equity, debt and commodities markets, tracking returns across a range of indexes and sectors. It also features private market activity, including major deals, fundraising, IPO performance, lending volume and unicorn creation.

In this monthly digest, we provide the datasets that the PitchBook Institutional Research Group is keeping an eye on.

read it now

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Canadian pension fund wins big on Hayfin investment

(Julius Reque/Getty Images)

Canadian pension fund British Columbia Investment Management reaped a threefold return on its sale of European credit manager Hayfin Capital Management.

The $230 billion pension manager sold its shares in a management buyout announced earlier this week that valued Hayfin at around $1.3 billion.

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LPs now have a road map for NAV loans

The Institutional Limited Partners Association advocates for best practices for LPs and GPs as they balance the current fundraising landscape, the continued lack of distributions and future allocations. Our latest analyst note covers the group's guidelines on NAV loans, which PitchBook discussed with ILPA during the second installment of our webinar series focused on LPs, The Allocator's Atlas.

With the new guidance, LPs will learn how NAV loans should be handled from the allocator's perspective, and GPs can learn how to best approach issues involving transparency, legal language and more.

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Corporate buyers swoop in on PE assets

(Shannon Fagan/Getty Images)

At the beginning of the year, GoCanvas was presented with an offer it couldn't refuse. Nemetschek Group, a German developer of construction software and a strategic partner of GoCanvas, made a preemptive offer to acquire the Virginia-based company, PE-backed since 2019.

The all-cash deal went through a relatively smooth due diligence process and closed in six months GoCanvas, which develops software for field-worker collaboration, is just one example of the many mature assets held by PE firms attracting the interest of cash-rich strategic buyers.

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VC Deals

Outpace Bio, a Seattle-based startup using AI-powered design to develop a treatment for solid tumors, raised a $144 million Series B led by RA Capital Management.

Gloo, a Colorado-based company creating a platform for ministry leaders, raised a $110 million growth investment.

Contextual AI, a Bay Area-based specialist in tools to improve AI model performance, raised an $80 million Series A led by Greycroft, Reuters reported.

Protect AI, which is developing cybersecurity technology for AI and machine learning, raised a $60 million Series B led by Evolution Equity Partners.

Healx, which is based in the UK and specializes in rare diseases, secured a $47 million Series C led by R42 Group and Atomico.

Germany's MYNE, which offers co-ownership platform for holiday properties, closed a €40 million Series A led by Limestone Capital.

Checkly, a Berlin-based provider of synthetic monitoring, completed a $20 million Series B led by Balderton Capital.

Leaf, a startup developing agricultural data software, raised an $11.3 million Series A led by Spero Ventures.

Axle Energy, a London-based SaaS company that connects EVs and home energy devices to electricity markets, raised a $9 million seed investment led by Accel.

Don't miss our upcoming webinar

In recent months, private equity has weighed down a budding M&A rebound. Now, signs suggest that PE is ready to join in. PE-led deal flow is tracking flat to slightly ahead in the first half of 2024—a significant improvement from last year. Even more encouraging is the YTD exit activity, which has surpassed expectations after languishing in a decade-long low for all of 2022 and 2023.

Join our panel of experts to discuss the state of PE through H1 2024 and predictions for what's to come. Key topics include:

Exit activity as the critical link and key indicator of future growth.

PE fundraising's surprising upside at $144 billion YTD, and the likely slowdown ahead.

Down from 2022's $1 trillion peak, recent deployment has outpaced fundraising and PE dry powder has eased to $965 billion.

Updates to our analysts' previous predictions on deal activity with continuation funds, PE company holding periods, PE tech dealmaking and more.

Register now to secure your spot.

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PE Deals

A consortium led by IK Partners is acquiring Eurobio Scientific, a French medical diagnostic company, in a take-private deal at €25.30 per share, representing a 67.5% premium.

Eurazeo acquired Eres Group, a Paris-based asset manager, for €350 million.

LDC invested in Creative ITC, a London-based cloud computing infrastructure provider for the architecture, engineering and construction sector.

Apollo Global Management, together with the founders of the company, led a $26.3 million funding round in Indian non-bank lender Clix Capital.

Brookfield Asset Management has acquired Nvent Electric's cable and thermal management unit in a $1.6 billion deal.

Cosm, an company focused on immersive entertainment venues and events, received over $250 million in a funding round from investors including Mirasol Capital, Avenue Sports Fund and Rock Ventures.

Exits & IPOs

Cerebras, a Bay Area-based startup developing semiconductors for use with generative AI, has filed for a US IPO.

Memorable AI, a startup specializing in AI to help make decisions on images and videos used in advertising, has been acquired by Reddit in the company's first acquisition since going public earlier this year.

Greeting card-maker American Greetings could be sold by Clayton, Dubilier & Rice in a deal valuing the company at around $1.5 billion, Reuters reported.

SupplyPike, a SaaS company developing automated tools for monitoring invoice deductions, has been acquired by Nasdaq-listed SPS Commerce.

Onsolve, a company providing services for event management and emergency communication, has been acquired by Canadian security company GardaWorld.

Fundraising

San Francisco-based PE firm Knox Lane raised $1 billion at the close of its second institutional fund.

Venbio, a San Francisco-based VC firm investing in biotech and drug discovery startups, raised $528 million for its fifth VC fund focused on life sciences.

Helios Investment Partners raised $200 million for the first close of the Helios Climate, Energy Access and Resilience Fund. The Africa-focused vehicle targets $400 million.

Chart of the Day

Source: Q2 2024 Global M&A Report

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PitchBook News - DFJ banks $1B+ for growth fund

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