PitchBook News - Rise of the AI agents

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The Daily Pitch: VC

September 19, 2024

Presented by Deloitte Audit & Assurance

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

The US Federal Reserve's half-point interest rate cut boosts the outlook for M&A

A fresh class of reasoning-focused LLMs are opening a new battlefield in AI—and our analysts snoop out LLM agents

Private equity's 10 biggest fundraising targets

How can managers stand out in China's liquidity drought?

Today's Top Stories

OpenAI's 'Strawberry' opens new AI battlefield

(Daniel Grizelj/Getty Images)

OpenAI just released "Strawberry," its o1 large language model capable of enhanced reasoning skills. Investors say that such models, built completely anew from the current most high-profile ones, are poised to open up a new battlefield between AI players big and small.

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AI agents answer the call

Our latest Emerging Space Brief covers the nascent segment of large language model agents, technology that can automate processes across an array of industries with just a simple request. Automated travel agents can book and schedule vacations, while personalized shoppers can purchase gifts within set parameters.

Emerging technology analyst Ali Javaheri provides an overview of the space, diving into the processes and history of LLM agents while providing an outlook on what's next.

read it now

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A message from Deloitte Audit & Assurance

Road to Next—More than a report, a gateway to the VC industry future

Deloitte's quarterly report provides a comprehensive analysis of emerging trends, market dynamics, and VC investment opportunities. Get exclusive insights from Deloitte's Private Growth leader, Heather Gates, in every issue. This issue's guest contributors include Kevan Flanigan, Private Risk & Financial Advisory Leader, and Jamie Rapps, Audit & Assurance Senior Manager. Subscribe today for these insiders' points of view.

Want to catch up on what's trending now? Download the current report focusing on expansion-stage exits. Read how the liquidity crunch has impacted the private markets, from startups seeking capital to investors raising new funds—and how inside and down rounds point to stronger dealmaking ahead.

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Fed's half-point interest rate cut boosts M&A outlook

Fed chair Jerome Powell
(Andrew Harnik/Getty Images)

The US Federal Reserve cut interest rates Wednesday by 50 basis points, an anticipated decision expected to energize exit markets for privately held companies.

With the decision to lower rates by half a percentage point instead of a quarter-point, the Fed is taking a relatively dramatic approach to its easing campaign. The first US interest rate cut in four years will lower businesses' borrowing costs and should ramp up M&A dealmakers' appetite.

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Germany to pump $13B+ into cash-hungry startup ecosystem

German Finance Minister Christian Lindner
(Sean Gallup/Getty Images)

The German government, alongside private partners, has pledged to invest €12 billion (about $13.3 billion) into startups by 2030.

The announcement comes as VC funding levels in Germany decline, with this year on track for the country's third consecutive fall in deal value.

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PE's biggest fundraising targets for upcoming funds

(Sergiy Trofimov Photography/Getty Images)

Private equity firms currently raising capital for successor funds appear to be setting lower, more achievable fundraising targets.

With the third quarter winding down, only a handful of managers are in the market vying for mega-funds. Check out our list of the 10 open PE funds with the largest target sizes.

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How can managers stand out in China's liquidity drought?

(Yangna/Getty Images)

Private market exits in Greater China are expected to take a 70% plunge this year, and fundraising is getting harder as US investors turn away from the region.

The new market reality will favor those GPs who are capable of opening up new sources of capital.

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Since yesterday, the PitchBook Platform added:

16

VC valuations

2414

People

781

Companies

39

Funds

See what our data software can do

The Daily Benchmark:
2017 Vintage Global PE Funds

Median IRR

19.27%

Top Quartile IRR

26.03%

0.62x

Median DPI

Select top performers

HgCapital Mercury 2

SSC Partners Cantium

Great Hill Equity Partners VI

*IRR: net of fees

134 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

VC Deals

Pairwise, a North Carolina-based startup specializing in gene editing for crops, raised a $40 million Series C led by Deerfield Management.

Los Angeles-based PictorLabs raised a $30 million Series B led by Insight Partners for its research and diagnostic technology for cancer.

Cherre, which operates a real estate management platform, raised a $30 million Series C led by HighSage Ventures.

Brenus Pharma, a French developer of cancer vaccines, received a $25 million Series A led by Angelor.

Travel reward platform developer Point.me, based in New York, raised a $15 million Series B led by Nyca Partners and Citi Ventures.

Ursa Major, a defense-tech startup developing 3D-printed rocket engines, received $12.5 million in funding from a contract with the US Navy and the Department of Defense's Office of Strategic Capital.

AI trip planning startup Mindtrip raised a $12 million round from investors including Costanoa Ventures and Forerunner Ventures.

CarePay, an Amsterdam-based health insurance SaaS company, raised €10 million from Reinsurance Group of America and the Health Insurance Fund.

Wegrow, a Paris-based digital collaboration specialist, received a €7 million Series A led by Nauta Capital.

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PE Deals

Dubai-based TVM Capital Healthcare has invested in Human Longevity, a San Francisco-based company specializing in longevity medicine.

Clinical trial research company Flourish Research has been acquired by Genstar Capital from NMS Capital via a strategic majority investment.

Minneapolis-based bakery Rise Baking Company has been acquired by Platinum Equity and Butterfly Equity.

Exits & IPOs

Kubecost, a startup building financial technology that optimizes Kubernetes clusters for cost efficiency, has been acquired by IBM.

CG Corp Global, a Nepal-based conglomerate known for its instant noodle brand, is planning an IPO for its unit in India, Bloomberg reported.

Fundraising

VC firm Headline raised $865 million for its latest growth fund targeted at Series B or later investments in technology companies.

Dragonfly Capital, a San Francisco-based VC firm specializing in crypto investments, is raising capital for its fourth fund with a target of $500 million, Bloomberg reported.

TPT Investment Management launched a new £650 million UK private credit fund seeded by UK defined-benefit pension schemes.

Phoenix raised £400 million for its latest flagship fund to target high-growth, lower-middle-market businesses. Additionally, the UK firm closed on £200 million for a continuation vehicle.

Tokyo-based Longreach Group has held a 78 billion yen (around $500 million) final close on its fourth fund.

French investment group Eiffel secured €777 million for its debt vehicle, Eiffel Impact Debt II, a 35% increase from its predecessor.

St. Louis-based Thompson Street Capital Partners has established its second continuation fund.

Chart of the Day

Source: Q2 2024 Enterprise Fintech Report

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PitchBook News - Rise of the AI agents

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