AI gold rush hides cash crunch for startups

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The Daily Pitch: VC

August 5, 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:

Many startups face a cash crunch and are struggling to replenishing their reserves—that's likely to result in shutdowns

Our analysts spot positive signs for VC-backed companies focusing on data observation

Grid infrastructure leads the way as VC clean energy investment remains high

PE's share of M&A dealmaking has rebounded, fueling a wider recovery, according to our Q2 2024 Global M&A Report

Today's Top Stories

AI gold rush hides a cash crunch for startups

(David Gray/AFP/Getty Images)

If you strip away the AI dealmaking frenzy, a harsh reality of today's fundraising landscape comes into full view: More startups are pushing the limits of how long they can go before replenishing their cash reserves.

The length of time that companies are waiting between funding rounds has been widening, and it is likely to result in more shutdowns.

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The Daily Benchmark:
2016 Vintage Global VC Funds

Median IRR

28.61%

Top Quartile IRR

39.03%

2.01x

Median DPI

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7Wire Ventures Fund

BY Capital 1

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77 Funds in Benchmark »

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VC Deals

Mynt, a Philippines-based company operating digital wallet brand GCash, received $393 million from Ayala and Mitsubishi UFJ Financial each in a deal that boosts Mynt's valuation to $5 billion.

Bilt, a startup developing a platform rewarding renters by converting their payments into other rewards, raised $150 million in a round led by the Ontario Teachers' Pension Plan. Bilt is now valued at $3.25 billion.

Agrovision, a company growing and distributing superfruits, raised $100 million in a round led by Aliment Capital that values the company at more than $1 billion.

Yodel, a UK-based package delivery and logistics service company, raised £85 million from investors including Paypoint.

Knowde, a startup operating an online marketplace for industrial chemicals, raised a $60 million Series C from Sequoia Capital, Blue Cloud Ventures and Point72 Ventures, TechCrunch reported.

Morpho, a Paris-based developer of a decentralized protocol for crypto lending and borrowing, raised $50 million from investors including Ribbit Capital.

Bourgeois Bohème, a Vilnius-based financial management platform, secured €6.5 million in a round led by Graphit Lifestyle.

D-ICE Engineering, a French deep-tech startup, secured €6 million in a round led by Swen Capital Partners.

PE Deals

Vital Care, a company specializing in home infusion services, received an investment from Berkshire Partners, Leonard Green & Partners and Linden Capital Partners.

PureFacts, a company developing SaaS for revenue management solutions, received an investment from GrowthCurve Capital that gives the firm majority ownership.

Fischer Information Technology, a company providing documentation services to manage business information, has been acquired by Quanos, a portfolio company of Keensight Capital.

Document imaging service provider Kodak Alaris has been acquired by Kingswood Capital Management from the United Kingdom Pension Protection Fund.

Fitness Ventures, a franchisee of Crunch Fitness, has been acquired by Meaningful Partners.

Portfolio Companies

The fulfillment services operations of Pitney Bowes' ecommerce unit have been acquired by Stord, an Atlanta-based startup backed by Kleiner Perkins and Founders Fund, The Information reported.

Telecommunications service provider Impact Telecom has been sold by Lingo to VC-backed company 46 Labs.

Exits & IPOs

LG CNS, the IT services division of South Korean company LG, is preparing for an IPO, Bloomberg reported. LG's battery unit completed its Seoul public listing in 2022.

CrownRock, a company focused on energy assets and resources, has been acquired by NYSE-listed Occidental Petroleum.

The World Series of Poker brand has been sold to NSUS Group from Caesars Entertainment in a $500 million deal.

Corporate M&A

AXA Investment Managers, the asset management arm of Paris-based insurance provider AXA, is in talks to be sold to BNP Paribas for €5.1 billion.

Chart of the Day

Source: Q2 2024 PitchBook-NVCA Venture Monitor

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AI gold rush hides cash crunch for startups

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