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The Daily Pitch: VC

August 27, 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:

Enterprise SaaS bounced back in Q2—hitting its highest quarterly VC deal value in over a year

Our ranking of the top VC fund families lists familiar firms and lesser-known managers

Acorn Capital Management targets an underserved area of the aviation finance market

Hedge fund Magnetar launches its first-ever VC fund, a $235 million vehicle for AI investing

Capital raised in 2024 by Japan-based PE funds will soon surpass last year's total

Today's Top Stories

Enterprise SaaS springs back amid surge in human-like AI

VC funding for the enterprise SaaS industry bounced back in Q2 as companies make inroads in human-like AI development. Startups added nearly $22 billion across 713 deals, representing the highest quarterly deal value in the sector in over a year—even when excluding xAI's massive Series B, according to our latest Emerging Tech Research.

Our analysts also cover emotion AI, which lies at the intersection of psychology, computer science and AI technology. Startups like Realeyes and VoiceSense are analyzing human features such as facial expressions and speech patterns to make AI even smarter.

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Magnetar launches $235M AI fund as asset managers come back to VC

(Tim Grist Photography/Getty Images)

Hedge fund Magnetar Capital is a launching a $235 million AI venture fund, the firm's first VC vehicle. The $17.5 billion firm has made big bets on GPU cloud computing specialist CoreWeave and large language model developer Cohere.

Magnetar's foray comes on the heels of more asset managers returning to the venture landscape amid the AI frenzy.

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VC's top fund families feature household names and up-and-comers

(Metamorworks/Getty Images)

VC funds in 2023 flashed that they might be able to get back to making money—or at least stop losing it. But over a longer time horizon, select managers have booked fantastic results that will keep LPs coming back despite recent headwinds.

PitchBook's annual ranking of the top VC fund families lists familiar firms like Union Square Ventures alongside lesser-known managers that have handily beaten the benchmark.

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Boutique PE manager cruises off the beaten path in aviation finance

(Songphol Thesakit/Getty Images)

Oklahoma-based PE manager Acorn Capital Management is raising capital for an evergreen fund dedicated to an underserved corner of the aviation finance market.

Rick Nagel, CEO of Acorn, said his firm often gets referrals from banks and other leasing companies looking for alternative lenders to finance older airplanes—a type of asset shunned by traditional lenders.

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How crypto can boost generative AI

As the demand for AI has exploded, so has the need for computing resources to handle and train large-scale models. And as costs soar, smaller startups are finding the needed computing power inaccessible.

Enter crypto. Our recent Emerging Tech Research covers dealmaking and trends in the crypto market in Q2 2024. As the sector has seen three straight quarters of growth, with total deal value hitting $2.7 billion in Q2, it is looking to be a part of what's next to keep its momentum going.

The crypto industry's decentralized GPU networks—blockchain-based marketplaces where people can share and monetize their unused computing resources—could help cut costs and expand access for AI startups.

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Japan's PE fundraising already matches 2023's total

(Owngarden/Getty Images)

Thanks to some particularly large vehicles, capital raised by PE funds based in Japan will soon surpass 2023's total.

Meanwhile, dealmaking has some catching up to do. Investment by Japan-based funds has only hit about 40% of 2023's $27 billion peak.

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Since yesterday, the PitchBook Platform added:

11

VC valuations

2226

People

579

Companies

21

Funds

See what our data software can do

The Daily Benchmark:
2015 Vintage Global VC Funds

Median IRR

16.70%

Top Quartile IRR

23.68%

0.46x

Median DPI

Select top performers

Index Ventures Growth III

Outlander 1 Archimedes

Anthos Capital III

*IRR: net of fees

77 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

VC Deals

Butlr, a San Francisco-based startup making sensors intended to track people and their movements in buildings, raised a $38 million Series B led by Foundry.

Shift, an Australia-based startup providing credit and payment services, raised a $23.6 million Series D led by Peak XV Partners.

Sunswap, a London-based company specializing in cold transportation logistics using clean tech, raised over €20 million in a round led by BGF.

HomeLight, a startup developing technology for real estate transactions, raised a $20 million Series D extension led by Zeev Ventures.

Viggle AI, a Toronto-based company using generative AI for character animation, raised a $19 million Series A led by Andreessen Horowitz.

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PE Deals

The China-based neurology and allergy businesses of UCB, a Belgian biopharma company, will be sold to CBC Group and Mubadala for $680 million.

Eruditus, which specializes in education programs for professionals, is in talks to receive a $150 million investment from TPG, TechCrunch reported.

Powerco, a New Zealand-based provider of electric and gas services, will be acquired by the Australian Retirement Trust, the Australian Financial Review reported.

Sylvan, a China-based company growing mushrooms and mushroom spawn, could bring in new backers after consideration from owning firm KKR, Bloomberg reported.

Elliott Investment Management has increased its stake in Southwest Airlines in a push to overhaul the airline.

AkkenCloud, which develops staffing software, has been acquired by Avionté, a company backed by Serent Capital that specializes in staffing platforms for businesses.

Portfolio Companies

Sage Geosystems, a Houston-based geothermal energy specialist, has agreed to supply Meta with geothermal power to support the company's data centers in the US.

Exits & IPOs

Al Majed Oud, a Saudi Arabia-based perfume company, is seeking to raise as much as $188 million in an IPO.

Featurespace, a cybersecurity startup backed by late tech entrepreneur Mike Lynch, is in talks to be acquired by Visa in a deal that could value the company at upward of £700 million, Sky News reported.

Intex DIY, a Georgia-based company specializing in cleaning cloths, was acquired by Nasdaq-listed Hillman Solutions.

Fundraising

Chicago-based G Squared, a VC firm focused on investing in tech startups, raised $1.1 billion for its sixth flagship fund.

CenterOak Partners, a Dallas-based PE firm, closed its third equity fund with over $1.1 billion.

Vertex Ventures China raised over 3.5 billion Chinese yuan (about $491.4 million) for its latest VC fund targeted at tech companies in China.

Oncology Ventures, a VC focused on investing in care technologies for cancer patients outside of drug discovery, raised $30 million for its first fund, TechCrunch reported.

Chart of the Day

Source: Q2 2024 France Market Snapshot

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PitchBook News - Enterprise SaaS springs back

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