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The Daily Pitch: VC

October 2, 2024

Presented by Fidelity Private Shares^SM

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

Our analysts explore the potential effects of the US presidential election on the private markets

California's controversial AI safety bill is dead, but what's next?

Cerebras' IPO is a bellwether of the public markets' appetite for loss-generating AI

Coller Capital launches a private credit secondaries fund focused on wealthy investors

Specialized VCs have an edge in life sciences exits

Today's Top Stories

2024 private markets election guide: How the parties stack up

The US presidential election next month could have significant consequences for private market participants, both for asset classes and the industries that VC and PE firms favor, our latest analyst note explains.

The note examines how policy differences between the two parties could impact 20 different industry and technology sectors—including AI, healthcare and fintech—as well as VC and PE firms.

Much of the election's impact depends not just on who wins but how they win—with or without the support of Congress, for example. And the trajectories of interest rates and the economy will be the primary drivers of valuations and growth for portfolio companies.

read it now

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What should follow California's vetoed AI safety bill?

(Thomas Winz/Getty Images)

California Gov. Gavin Newsom has vetoed the state's controversial AI safety bill, sending regulation of tech's hottest industry to square one.

The move is being celebrated by big tech companies, startups and much of the VC establishment, who feared the bill would stifle innovation.

With legislation effectively back to the drawing board, the opposition is wasting no time laying out a future vision of AI regulation. Here's what they want to see.

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A message from Fidelity Private Shares^SM

Capturing Climate Tech Opportunity in 2024: US Startup Landscape

Presented by Fidelity Private Shares^SM, this comprehensive report dives into the emerging trends and innovations driving climate technology forward as well as key market forces and opportunities impacting the future of this fast-evolving sector.

Whether you're a founder, investor, employee, or industry stakeholder, this report is your guide to seizing new opportunities and gaining unique insights into this dynamic industry.

Download your copy today

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Cerebras' IPO bets that AI hype matters more than profitability

(Courtesy of Cerebras)

AI chipmaker Cerebras has filed for an IPO that must convince investors that its supersized chips can take on the likes of Nvidia.

The company isn't profitable. Its net loss was $66.6 million for the first six months of 2024. And its massive revenue growth comes with a big asterisk: 87% of its revenue this year came from a single customer, Abu Dhabi-based AI company G42.

The listing is a bellwether of the public markets' appetite for loss-generating AI companies.

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September wrap-up: One month in global markets

Our latest Global Markets Snapshot breaks down a month of trends in the equity, debt and commodities markets, tracking returns across a range of indexes and sectors. It also features private market activity, including major deals, fundraising, IPO performance, lending volume and unicorn creation.

In this monthly digest, we provide the datasets that the PitchBook Institutional Research Group is keeping an eye on.

read it now

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Life sciences VCs beat generalists on road to exits

(Freepik/jowomid)

Given VCs' fondness for chasing short-lived hype cycles—looking at you, metaverse—LPs may rightly be wary of overspecialized managers.

But sector expertise is a significant asset in fields such as life sciences, where generalist firms may lack the technical knowledge required for deep due diligence. Healthtech and pharma companies backed by firms with deep expertise were far more likely to record a successful IPO or acquisition than their generalist peers, PitchBook data shows.

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Coller Capital's new private credit fund targets wealthy investors

(Alexander Spatari/Getty Images)

Coller Capital, a UK-based specialist in private credit secondaries, has introduced an open-ended fund focused on individual investors. The move is part of a broader trend of private asset firms diversifying their investor base beyond large institutions.

Private credit strategies are poised to raise over $63 billion from perpetual vehicles designed to target private wealth investors in 2024, marking a staggering 40% rise from the previous year, PitchBook analysts estimate.

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Since yesterday, the PitchBook Platform added:

2429

People

710

Companies

45

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

3one4 Capital Fund II

Flagship Pioneering Fund VI

Alta Partners NextGen Fund I

*IRR: net of fees

60 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

VC Deals

Kailera Therapeutics, a biotech startup developing obesity drugs, raised a $400 million Series A led by Atlas Venture, Bain Capital Life Sciences and RTW Investments.

Eon, which makes cloud infrastructure backup technology, raised a total of $127 over three rounds, the first led by Sequoia, the second led by Lightspeed and the third by Greenoaks Capital Partners.

Nusano, which produces radioactive materials for use in pharmaceuticals, raised over $115 million in a Series C led by Wasatch Group.

Dexory, a London-based robotics and data intelligence company, closed an $80 million Series B led by DTCP.

11x.ai, a San Francisco-based developer of AI-powered bots for businesses, raised about $50 million for its Series B led by Andreessen Horowitz, TechCrunch reported.

AI software infrastructure startup HPC-AI Tech raised a $50 million Series A from investors including Singtel Innov8, Sinovation Ventures and Capstone Capital.

Nym, a New York-based developer of an autonomous medical coding engine for the healthcare system, raised a $47 million round led by PSG.

DataPelago, which seeks to speed up data processing, raised a $47 million round from investors including Eclipse Ventures, Taiwania Capital and Qualcomm Ventures.

PE Deals

StrataPT, a company that develops practice management software for physicians, raised $25 million from Council Capital, Axios reported.

ADT Alarms will be sold by Johnson Controls International in a deal that could value the unit at up to $2 billion. Several PE firms are eyeing the business, Bloomberg reported.

VisiQuate, a startup providing data analytics and automation services for the healthcare industry, has been acquired by Accel-KKR.

The insights business unit of NYSE-listed Sensata Technologies has been acquired by an affiliate of Balmoral Funds and rebranded as Xirgo Technologies.

Thoma Bravo acquired a majority stake in USU Product Business, a German IT management software provider, marking the firm's second acquisition in the country within a year.

Macquarie Asset Management is acquiring Danish offshore wind operator Ziton from Permira Credit in a deal via Macquarie European Infrastructure Fund 7.

Exits & IPOs

Siete Foods, a Texas-based manufacturer of grain-free tortilla chips, is in talks to be acquired by PepsiCo for over $1 billion, The Wall Street Journal reported.

Turbine, a company developing inventory management software, has been acquired by fintech startup Settle, Axios reported.

São Paulo-based Moove is looking to raise up to $438 million in a US IPO.

Fundraising

PE firm TJC closed on $2.1 billion for its second continuation fund, an extension of The Resolute Fund III.

New York-based OceanSound Partners raised $1.49 billion for its second PE fund.

Amsterdam-based Invest-NL is exploring a new VC fund-of-funds of up to €1 billion.

Gallant Capital Partners, a PE firm investing in tech and industrial businesses, raised $406 million for its second fund.

Prospect Partners closed its fifth fund on $225 million, which will make PE investments in North American businesses.

Corporate M&A

British handbag-maker Mulberry rejected Frasers Group's 130 pence-a-share takeover offer.

Chart of the Day

Source: Greater China Private Capital Breakdown

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PitchBook News - Our private markets election guide

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