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The Daily Pitch: VC

September 23, 2024

Presented by SVB

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

Our analysts find VCs produce better results when they stick to their sector expertise

Not everyone in PE is thrilled about the Fed's rate cut

Code-generation startups have become generative AI's best-funded space

The upstarts challenging the weight-loss giants

Today's Top Stories

Jack of all trades? Think twice about VC

VCs who stick to their domain expertise when investing in startups have generated better outcomes, according to our latest analyst note.

Using an AI-powered model, our analysts found that startups whose lead investors had a high level of expertise in a particular sector were 1.2 times more likely to have a successful exit than companies backed by generalist VCs. This has been especially important at the early stage and in highly technical areas like pharma and healthtech.

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Fed's rate cut sparks hope, but PE dealmakers remain wary

(Kmatta/Getty Images)

While the markets celebrate the Federal Reserve's interest rate cut, some PE fund managers and advisers remain cautious. They said weakening business performance, among other factors, is an obstacle to the rebound in PE dealmaking.

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A message from SVB

SVB's State of the Markets H2 2024 report breaks down the latest VC trends

SVB's outlook and analysis of the trends shaping the innovation economy is back with the H2 2024 State of the Markets report.

Explore the factors driving more capital flow to US startups this year than in 26 of the last 30 years—despite US VC investment falling below previous peaks. While many companies are finding it harder to raise, the best are making it happen—led by those capitalizing on the boom in AI.

Discover the dynamics at play as SVB breaks down the uneven recovery and the process of recalibration across venture-backed company operations, fundraising, investments and exits.

Get the report

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AI cracks the funding code

A temporary calm in technological disruption isn't stopping AI code-generation startups. They have become generative AI's best-funded space, raising $1 billion across 18 deals in the first half of 2024, according to our latest Emerging Tech Research.

The report spotlights the segments like banking and code generation that are propelling the sector forward. Mega-deals like xAI's $6 billion Series B helped keep the momentum going. Overall deal value surged in Q2, with nearly $31 billion in VC funding generated, an increase of nearly 33% over the previous quarter.

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These upstarts are challenging weight-loss goliaths

(Carolina Rudah/Getty Images)

Novo Nordisk and Eli Lilly are likely to maintain their first-mover advantage in the rapidly growing weight-loss drug category. Still, a report by Morningstar and PitchBook analysts predicts that, by 2031, newcomers will command $70 billion of the GLP-1 market.

Next-generation obesity drugs are coming from Roche, Amgen, Pfizer and others. Drugmakers may press their advantage with acquisitions of privately held companies like Arch Venture Partners-backed Metsera or Bain Capital-backed Hercules.

The report shines a light on what new entrants mean for a lucrative category that will face increased competition and pricing pressure in the years ahead.

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Alan secures Europe's largest insurtech round this year

Alan co-founders Jean-Charles Samuelian-Werve (left) and Charles Gorintin (Image by Vinciane Lebrun/Voyez-Vous)

Health insurance platform specialist Alan raised a €173 million (about $193 million) Series F, almost doubling its valuation to €4 billion.

VC interest in European insurtech deals has declined in recent years, with deal count projected to end this year at its lowest level since 2016.

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Since yesterday, the PitchBook Platform added:

1

VC valuations

292

People

96

Companies

3

Funds

See what our data software can do

The Daily Benchmark:
2015 Vintage Global Funds-of-Funds

Median IRR

18.56%

Top Quartile IRR

20.82%

0.77x

Median DPI

Select top performers

Peakview Capital Fund I

TrueBridge-Kauffman Fellows Endowment Fund IV

TrueBridge Capital Fund IV

*IRR: net of fees

57 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

VC Deals

PhysicsWallah, an India-based edtech platform provider, raised over $210 million for its Series B at a $2.8 billion valuation. Investors included Lightspeed, Hornbill Capital and GSV Ventures.

AtoB, a fintech payments startup based in San Francisco, has raised a $130 million combined Series C and debt round led by General Catalyst and Bloomberg Beta.

San Francisco-based Picus Security, a cyber validation startup, has raised a $45 million Series C led by Riverwood Capital.

Datamaran, a London-based provider of ESG software, secured a $33 million Series C from Morgan Stanley Expansion Capital.

Everest Fleet, an India-based ridesharing startup, raised $30 million from an investment by Uber.

Ferovinum, a London-based funding and supply chain platform provider for the wine and spirits industry, secured a £17.5 million Series A led by Notion Capital.

San Francisco-based Fathom, which offers an AI meeting platform, has raised a $17 million Series A led by Telescope Partners.

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PE Deals

New York-based RF Investment Partners has made a platform investment in Altro and Amici Pharmaceuticals, two founder-owned companies that focus on generic pharmaceuticals for the pet and animal markets.

Goldman Sachs has invested in Interplay Learning, which offers an online platform for career development in skilled trades, as the company acquires Industrial Training International.

True North Advisors has bolstered its wealth management capabilities through the acquisition of Clear Rock Advisors, effectively adding $470m in AUM.

FlightKeys, a software solutions provider for airlines seeking to optimize flight planning and operations, has received a strategic growth investment from Insight Partners.

Stellex Capital Management has agreed to acquire Fox Brothers Holding Group, an environmental service provider to the construction and infrastructure industry.

New Heritage Capital has made a majority investment in Brilliant, an educational software specialist.

Exits & IPOs

Tokyo Metro plans to raise around $2.24 billion through an IPO, which would be Japan's largest public offering since 2018, Bloomberg reports.

Fundraising

Avid Ventures has launched its second flagship fund with $87 million in commitments to invest in fintech and SaaS startups.

Corporate M&A

Chip developer Qualcomm has approached Intel with a takeover offer, The Wall Street Journal reported. Intel has a market value of about $90 billion.

Chart of the Day

Source: Q2 2024 US PE Middle Market Report

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PitchBook News - Should VCs pick a lane?

Older messages

Long wait for Fed's impact

VC expertise and exit outcomes

New hope dawns for VC

Rise of the AI agents

Ukraine defense-tech VC fund targets $50M

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