PitchBook News - Are ESG and DEI dead?

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The Daily Pitch: VC

September 26, 2024

Presented by SVB

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

Y Combinator's new cohort offers a peek at the future of AI

The results of our annual Sustainable Investment Survey are in—does perception of ESG and impact investing match reality?

Another OpenAI exit: Chief technology officer Mira Murati resigns

Calstrs just made another move to expand participation in co-investments. Also: Rewards and risks of working with emerging managers

Today's Top Stories

Are ESG and DEI dead?

In this case, perception may be different from reality. While the ESG and impact investing spaces are fraught with controversy, our fifth annual Sustainable Investment Survey report shows that practitioners are leaning into their investment approaches in new and innovative ways.

With over 1,000 global respondents, including asset owners, VC and PE GPs, and family offices, the survey reveals a number of trends—including a desire to move away from the term "ESG" and a shift toward ESG implementation among both VC and non-VC fund managers.

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Predicting AI's future from YC's new cohort

Y Combinator CEO Garry Tan (Harry Murphy/Getty Images)

The future of AI is being shaped at Y Combinator's Demo Day this week.

The accelerator, led by CEO Garry Tan, features 200 AI startups in its latest batch. YC has also emerged as the most active investor in companies using large language models to perform multi-step tasks that require humanlike reasoning.

From robots that learn by mimicking humans to AI agents that surf the web, PitchBook lead emerging tech analyst James Ulan keys in on four themes from the latest cohort.

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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.

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OpenAI CTO Mira Murati resigns

(Image courtesy of OpenAI)

OpenAI's chief technology officer Mira Murati has resigned, the latest exit in a string of high-profile departures from the ChatGPT maker.

Murati's move follows reports that OpenAI is considering restructuring its business as part of a funding round that could value the company at around $150 billion. Other notable departures this year include co-founders Ilya Sutskever and John Schulman.

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AI mega-deals push data analytics ahead

Startups organizing massive amounts of data are poised to power the advanced tools of the future like generative AI, according to our latest Emerging Tech Research. During the first half of 2024, the data analytics industry raised over $20 billion in VC funding, on pace to surpass last year's total of $29 billion.

While mega-deals like CData's $350 million growth round and Cohesity's $150 million Series F are pushing the sector higher, the report also spotlights opportunities in the unstructured data analytics category—platforms processing the most generated types of data, like video and voice.

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Calstrs ramps up co-investment capabilities

(Janet Kopper/Getty Images)

Calstrs just got a lot more nimble in its ability to participate in co-investments.

A policy revision marks a major step forward in the pension's adoption of its collaborative mode, former chief investment officer Christopher Ailman's vision for a more advanced and larger PE portfolio that emphasizes co-investments and direct investments.

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Q&A: The upside of co-investing with emerging managers

(Anadolu/Getty Images)

The private equity ecosystem is a competitive one, with 80 new managers launching globally this year alone.

PitchBook sat down with Cameron Payne, co-head of EMEA investment at Federated Hermes to find out why his firm often backs emerging managers, what he looks for when sourcing deals and the potential red flags he's learned to avoid.

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VC digs into health of soil

Our latest Emerging Tech Research highlights VC-backed agtech companies focusing on soil health by developing additives and monitoring technology to enable regenerative agriculture.

The report also covers how investors could help spur greener applications of technology to boost soil health. Adopting such technology can be expensive initially for farms, but the industry is recognizing the benefits of more sustainable farming practices.

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The Daily Benchmark:
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VC Deals

New York-based cybersecurity startup Wiz is in talks to move forward with a share sale, letting existing shareholders tender up to $700 million. The sale could give Wiz a $20 billion valuation, Bloomberg reported.

EGYM, a Denver-based fitness software specialist, raised $200 million led by L Catterton and Meritech Capital.

Medicare plan provider Zing Health, based in Chicago, raised $140 million from investors including Health 2047 Capital Partners, CRG and First Trust Capital Partners.

Database service provider Supabase raised an $80 million Series C led by Peak XV Partners and Craft Ventures.

Crisp, a startup specializing in supply chain optimization, raised a $72 million Series B from investors including Wellington Management, Toshiba and DNX Ventures.

Cyclic Materials, a startup focused on technology for recycling rare earth metals, raised a $53 million Series B led by ArcTern Ventures.

Helaina, a New York-based startup developing a breast milk alternative, raised a $45 million Series B led by Avidity Partners.

Vsim, a UK-based physics simulation research and deployment company, received a $24 million seed round led by EQT Ventures.

Notpla, a London-based sustainable packaging startup, secured a £20 million Series A+ led by UB Forest Industry Green Growth Fund.

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PE Deals

Greytown Advisors, a Miami-based family office, has been acquired by Brazilian investment bank Banco BTG Pactual.

Lexmark International, a manufacturer of printers, is in talks to be sold by its owners, which include PAG and Ninestar. The company could be bought by another buyout fund in a deal valuing it up to $2 billion, Bloomberg reported.

BC Partners entered into exclusive talks to acquire a minority stake in the EuroLeague basketball competition, The Financial Times reported.

KKR is seeking at least $400 million for its 63% stake in Indian investment bank Avendus Capital, Bloomberg reported. Nomura Holdings and Mizuho Financial Group are the leading bidders for the deal.

Kartesia invested in Lumiforte, a Netherlands-based industrial coating maker.

BNP Associates, a firm focused on airport infrastructure, received a strategic investment from Godspeed Capital Management.

Energy grid storage provider Greenflash has been acquired by an affiliate of H.I.G. Capital.

Exits & IPOs

Warburg Pincus sold its 8.6% stake in Indian automobile portal CarTrade Tech in a deal worth $44.86 million, Reuters reported.

Europastry is set to launch an IPO this week which could value the Spain-based breadmaker around €1.5 billion, Bloomberg reported.

Sabio, a technology services company, is in talks to be sold by owner Horizon Capital in a deal that could value the company at up to £400 million, Bloomberg reported.

Fundraising

Boldstart Ventures, a Miami-based VC firm, has raised $250 million for its seventh fund, according to SEC filings.

Chart of the Day

Source: Europe's first-time PE fund closes on track for third year of decline

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PitchBook News - Are ESG and DEI dead?

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