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The Daily Pitch: VC

October 15, 2024

Presented by Fidelity Private Shares^SM

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

Europe's PE dealmaking is rebounding, but exits remain low

Crossover GP Adams Street doubles down with a $1.2 billion-plus VC fundraise

Platform LBOs are on the rise, fueled by lower interest rates

Our Q3 valuations data for public companies in the AI and machine learning sector

Funding for Europe's female founders in Q3 hits the lowest point since 2020

Today's Top Stories

Adams Street recommits to VC with $1.2B+ fund group

(Anthony Mance/Getty Images)

Most crossover investors have shied away from VC in the last two years, directing capital away from moonshot bets and toward reliably high-yield ones like bonds and private credit.

But Adams Street Partners just made a big swing on the asset class. Yesterday, the Chicago-based growth and PE buyout firm closed on over $1.2 billion for its Venture Innovation Fund IV Program—a more than 40% jump from its previous venture fund group.

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Europe's PE dealmaking shows signs of recovery, but exits remain low

Our Q3 2024 European PE Breakdown, sponsored by Stax, shows the market is on track for significant yearly growth, with a projected 27.5% increase in deal value and 11.5% in deal count.

Improved market conditions, lower rates and substantial dry powder among sponsors are driving the trend, particularly in mega-deals and corporate divestitures, which now represent over 18% of deal value.

However, exit activity remains low, with a flat year-over-year value and a notable drop in count from 2021's highs. Fundraising has remained strong despite a weaker Q3, with a marked decline in growth/expansion funds, indicating a shift toward traditional buyout strategies.

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Conglomerates integrating generative AI have a clear advantage

Enthusiasm for generative AI integration into existing tech has been reflected in the growth of share prices for conglomerates as they announce the implementation of AI across their products. Though companies that choose to integrate generative AI will likely continue to see valuation premiums, share prices for semiconductor companies took a dip in Q3, reflecting uncertain infrastructure growth.

Our Q3 2024 AI & ML Public Comp Sheet and Valuation Guide tracks stock performance, valuations, revenue growth, and EBITDA margins for key publicly traded companies.

see the data

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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 recent 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.

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Funding for Europe's female founders in Q3 hits lowest point since 2020

Funding for European startups with female founders finished Q3 on a down note, with the lowest level of capital raised since Q2 2020, according to our European VC female founders dashboard. Europe's female founders have raised €7.4 billion (about $8 billion) across 1,425 deals, behind last year's pace.

Notable deals in Q3 included a €135.9 million Series A for Newcleo, a clean nuclear technology startup co-founded by COO Elisabeth Rizzotti, as well as a €40 million later-stage VC round for energy management specialist Enerdigit, founded by company president Bénédicte Pléau.

explore the dashboard

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Platform LBOs rebound as lower rates spur dealmaking

(SimpleImages/Getty Images)

Platform LBO dealmaking rebounded in the third quarter, fueled by an over 28% year-over-year value increase and an interest rate cut that has made capital more affordable.

But PE dealmakers remain cautious due to lingering economic uncertainties, political risks and a slow fundraising environment.

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Since yesterday, the PitchBook Platform added:

2522

People

781

Companies

62

Funds

See what our data software can do

The Daily Benchmark:
2022 Vintage US PE Funds

Median IRR

8.51%

Top Quartile IRR

22.25%

0x

Median DPI

Select top performers

First Reserve Legacy Opportunities Fund

Green Equity Investors IX

Hidden Harbor Capital Partners II

*IRR: net of fees

99 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

People

Sebastien Bubeck, an AI vice president at Microsoft, is leaving the company to join OpenAI.

Inflexion promoted Flor Kassai to managing partner and chief operating officer.

VC Deals

Knave, a Paris-based provider of pay-per-use services for manufacturers and distribution companies, raised €225 million in debt from Pollen Street Capital.

Purplle, an Indian beauty retailer, received 15 billion rupees (around $178.4 million) led by Abu Dhabi Investment Authority, The Economic Times reported.

Brazil-based accounting firm Contabilizei raised $125 million from Warburg Pincus.

Omnea, a London-based startup building a procurement platform, raised $25 million comprising $5 million in seed funding led by First Round Capital and Point Nine and a $20 million Series A led by Accel.

Constellation Technologies & Operations, a French telecom startup, secured €9.3 million from investors including Expansion and Bpifrance.

Don't miss our upcoming webinar

As the global economy builds back toward growth, Southeast Asia sits uniquely positioned to capture inflows and rebound from slowed investment activity. Join PitchBook experts in our upcoming webinar to highlight the current state of the VC and PE markets in the region.

Register now to secure your spot.

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PE Deals

Bausch and Lomb, an eyecare medical products company, is in talks to be acquired by TPG and Blackstone in a joint take-private deal.

Hong Kong-based ASMPT, which makes computer chip equipment, is in talks to be taken private. KKR is the potential acquirer, Bloomberg reported.

A majority stake in Great American will be acquired by Oaktree Capital Management from B. Riley Financial.

Dtiq, a company providing SaaS-based surveillance and analytics for restaurants and retail businesses, raised $145 million from Bain Capital.

BGF invested £6 million in UK health tech market intelligence provider Signify Research.

Precision components manufacturer Precinmac has been acquired by Centerbridge Partners from Pine Island Capital, Bain Capital and Compass Partners Capital.

Exits & IPOs

Cacheflow, a B2B commerce platform developer, has been acquired by NYSE-listed HubSpot.

Gynesonics, a women's health specialist developing minimally invasive diagnostic devices, has been acquired by Nasdaq-listed Hologic.

Stanley Robotics, a developer of autonomous valet parking robots, has been acquired by HL Robotics.

Fundraising

Khosla Ventures raised a $405 million special purpose vehicle to invest in the $6.6 billion Oct. 2 funding round for OpenAI, TechCrunch reported.

Buckley Ventures, a VC firm led by Josh Buckley, is targeting $250 million for its fourth fund.

BNP Paribas Asset Management is launching its first evergreen private credit fund under the European ELTIF 2.0 regulatory framework.

Tensor Ventures, a Luxembourg-based deep-tech VC firm, raised €50 million.

Gate Ventures and Boon Ventures, alongside blockchain SaaS company Movement Labs, have launched a $20 million Web3 fund.

Investors

Ares Management is expanding its PE business into Australia and New Zealand, The Australian Financial Review reported.

Chart of the Day

Source: Middle-market recovery is underway

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PitchBook News - Adams Street raises $1B+ VC war chest

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