PitchBook News - Fund performance outlook brightens

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The Daily Pitch: VC

August 13, 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:

Our latest Global Fund Performance Report finds a brighter outlook across private markets

Star Strong Capital's flagship direct lending fund pinpoints a potentially promising niche

Our Emerging Tech Research analysts size up middle-market fintech M&A

Balderton Capital raises $1.3 billion to invest in European startups across two new funds

Unicorn creation is on pace to break 2023's total

Today's Top Stories

Fund performance outlook brightens after ho-hum 2023

The temperature is rising in deal rooms as investment activity increases across private markets—promising improvements in fund performance after a relatively subdued 2023, according to our latest Global Fund Performance Report.

Private equity posted a one-year IRR of 10.5% last year, a welcome turnaround after declining 1.4% in 2022.

VC wrapped up 2023 by recording its sixth consecutive quarter of negative one-year IRRs. However, Q4 brought signs that the strategy is making its way back into the black.

Private debt funds returned an estimated 9.2% for 2023, capping a banner year for floating-rate loans.

read the report

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UK's Balderton pulls in $1.3B to target European startups

Suranga Chandratillake, general partner at Balderton Capital
(John Phillips/Getty Images)

London-based Balderton Capital has raised $1.3 billion across two funds to back European companies.

Europe has seen several large VC vehicles close this year despite overall slow fundraising.

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Popping the hood on middle-market fintech M&A

Our latest Emerging Tech Research on fintech M&A and valuations covers the exit trends in the sector, looking at the popular buyout categories and patterns.

PE buyouts slowed to an estimated 12 deals in Q2—down 57% from the previous quarter. But there are reasons to be optimistic, PitchBook analysts James Ulan and Rudy Yang say, with the past 12 months signaling healthy dealmaking overall. Corporate M&A remains flat and will take time to return.

The analyst note provides a detailed set of valuation comps for the middle market, using acquisition price and employee count.

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Unicorn creation on pace to break 2023's total

More than halfway through 2024, the number of new unicorns is on pace to surpass last year's total, according to our global unicorn tracker. Ten startups crossed the billion-dollar valuation mark in July—for a total of 75 unicorns so far in 2024, compared to 101 last year.

US-based companies made up the majority of July's newly minted unicorns, with seven such startups crossing the threshold. Of the 75 unicorns created in 2024, 41 are based in the US.

IT and healthcare led as the sectors with the most new unicorns in July.

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VC funding for information security surges amid AI demand

Information security startups brought in $3.6 billion in VC funding in the second quarter—a more than 20% increase over Q1, according to our recent Emerging Tech Research.

Propelling the surge is a demand for more advanced security measures as generative AI continues to evolve, with more startups experimenting with applications for threat detection and security testing. Our analysts cover the trends, deals and emerging opportunities in the sector.

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Since yesterday, the PitchBook Platform added:

13

VC valuations

1967

People

598

Companies

44

Funds

See what our data software can do

The Daily Benchmark:
2017 Vintage Global VC Funds

Median IRR

18.60%

Top Quartile IRR

27.31%

0.25x

Median DPI

Select top performers

Boost VC Fund 1

Flagship Pioneering Fund VI

3one4 Capital Fund II

*IRR: net of fees

61 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

People

Investment bank Evercore hired David Kamo, Goldman Sachs global head of dealmaking, as a senior managing director to help drive its PE coverage, Reuters reported.

VC Deals

Oyo, an India-based startup operating a hospitality platform, raised a $173.5 million Series G from investors including Patient Capital InCred Wealth, and J&A Partners. The round values Oyo at $2.4 billion, down from a peak valuation of about $10 billion in 2019, TechCrunch reported.

Halda Therapeutics, a biotech company developing targeted cancer treatment, raised a $126 million Series B extension from investors including Deep Track Capital, Frazier Life Sciences and RA Capital Management.

Kinetic Green, an India-based electric vehicle manufacturing company, raised $25 million from Greater Pacific Capital as a part of a Series A.

Gaussion, a UK EV charging startup that spun out of University College London, raised €10.9 million in a Series A led by Autotech Ventures.

Uptime AI, a San Francisco-based startup developing an AI platform for firms in the industrial sectors, raised a $14 million Series A led by WestBridge Capital.

Chariot, a startup developing a financial platform allowing payments to charity organizations via Donor Advised Funds, raised an $11 million Series A led by Maveron.

Conduit, a startup developing cross-border payments solutions in Latin America and expanding into Africa, raised a $6 million seed round extension from Helios Digital Ventures, TechCrunch reported.

PE Deals

Revance Therapeutics, a Nasdaq-listed biotech company developing an aesthetic drug that competes with Botox, agreed to be acquired by PE-backed Crown Laboratories in a $924 million take-private.

EQT is in exclusive talks to buy Eutelsat Group's ground station infrastructure business via EQT Infrastructure VI fund.

Waterland Private Equity acquired Lebara Group, a mobile virtual network operator offering services across the UK, Netherlands, Germany, France and Denmark.

CuraLinc, a Chicago-based company providing mental health care resources to employees and students, received a strategic investment from Lightyear Capital.

Site 20/20, a company servicing the traffic control industry, received a growth investment from New Mountain Capital and Energy Impact Partners.

Form Technologies, which manufactures small metal parts for various industries, could be bought by Ares Management from owner Partners Group, Bloomberg reported.

Exits & IPOs

Power Engineers, an Idaho-based engineering and environmental consultancy, has been acquired by Toronto-listed WSP Global for C$2.4 billion (about $1.8 billion). The acquisition is backed by the Canada Pension Plan Investment Board, Caisse de dépôt et placement du Québec, British Columbia Investment Management and Singaporean sovereign wealth fund GIC.

Fundraising

Valor Equity Partners, a Chicago-based PE firm, raised $2.35 billion at the close of its latest flagship fund.

Framework Ventures, a San Francisco-based VC firm investing in blockchain technology startups, launched its latest fund, Framework Ventures IV, according to SEC filings.

VC firm Shrug Capital launched its latest fund targeted at $50 million, according to SEC filings.

Chart of the Day

"The median time between financing has increased significantly for companies. In Q3 2021, Series D+ rounds were being raised roughly 1.2 years after the previous round. Companies closing Series D+ rounds in Q2 of this year had not raised for a median time of more than two years, meaning that companies raising now also last raised when pricing was at its highest and they already had a high valuation pinned to themselves."

Source: Q2 2024 US VC Valuations Report

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PitchBook News - Fund performance outlook brightens

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