New GPs chase Europe's defense-tech boom

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The Daily Pitch: VC

October 21, 2024

Presented by SRS Acquiom

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

Europe's defense-tech rush has hatched a brood of specialist VCs

See how our benchmark for buyout funds performed in Q3

Harvard's endowment returned 9.6% for fiscal year 2024, trailing rivals Columbia and Brown

Check out Q3 valuations data for public companies in the digital health and healthcare IT sector

Our expanded Private Capital Barometers go beyond PE funds to cover VC, private debt, infrastructure and natural resources

Today's Top Stories

Defense-tech boom spawns wave of new European GPs

(Dragos Condrea/Getty Images)

Europe has seen record levels of VC investment in the defense-tech sector this year while conflicts and success stories increase appetite. As funding grows, so too has the number of emerging managers targeting the sector.

Tech investors historically shied away from the defense-tech market. But their interest has been piqued by dual-use technology—any product or software that can be used for both civilian and military purposes—which has also become more of a focus for startups in the sector.

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Demand for virtual-first care declines, taking share prices with it

Publicly listed digital health and healthcare IT companies are underperforming, with virtual care and remote patient monitoring standing out as segments hit the hardest.

Providers of direct-to-consumer services are performing worse than companies offering B2B services like electronic health records and clinical information databases. Despite underperformance, an IPO window could open up for healthtech startups in 2025.

Our Q3 2024 Digital Health & Healthcare IT 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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A message from SRS Acquiom

How do M&A claims play out post-closing?

Get the latest M&A insights from the new 2024 SRS Acquiom M&A Claims Insights Report.

Covering indemnification claims activities, earnout achievement rates, expense funds, and more, the report offers one-of-a-kind insights drawn from more than 850 private-target acquisitions valued at approximately $168 billion. SRS Acquiom served as shareholder representative for all of them. Read the report to learn about meaningful trends, such as:

28% of all deals encounter a post-closing claim
1 in 27 of those claims end up in front of a judge or arbitrator—nearly 4x the number just two years ago
Not only are claims taking longer to resolve, but they are also increasing in size

You won't find this collection of information anywhere else. Don't miss out.

Get the report

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Strong performance from our buyout replication portfolio in Q3

PitchBook's buyout replication portfolio—a proxy for buyout fund performance—notched another solid quarter.

These returns were powered by a strong performance from small-cap stocks, propelled by expectations of more interest rate cuts.

The BRP outperformed the sector- and leverage-adjusted Russell 2000 Index, returning 10.3% and 9.4%, respectively. The Russell 2000 Index outperformed the S&P 500 Index by more than three percentage points.

Three of the companies in the BRP—Bally's, Instructure and Envestnet—announced take-private acquisitions during the quarter. Looking ahead, one of the BRP's current top take-private targets, SecureWorks, might soon be taken private, according to media reports.

explore the dashboard

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Harvard's endowment returns lag rivals Columbia, Brown

(Joe Daniel Price/Getty Images)

Harvard's endowment fell behind Columbia University and Brown University in the race for the strongest annual performance in the Ivy League this year.

The portfolio, now $53.2 billion, generated a 9.6% return for fiscal year 2024—coming in above its targeted 8% return for the year but below peers that saw double-digit figures for the same period.

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Since yesterday, the PitchBook Platform added:

82

People

58

Companies

5

Funds

See what our data software can do

The Daily Benchmark:
2015 Vintage Global Real Estate Funds

Median IRR

10.10%

Top Quartile IRR

14.95%

1.06x

Median DPI

Select top performers

GreenOak Asia II

Blue Owl Capital Real Estate Capital Fund III

NREP LogiReal

*IRR: net of fees

86 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

VC Deals

Eruditus, an India-based edtech company, raised a $150 million Series F led by TPG that values the company at $3 billion.

Biotech company Terray Therapeutics, which is developing an AI platform for drug development, raised a $120 million Series B led by Bedford Ridge Capital and NVentures.

Mexico City-based Jüsto, an online grocery startup, raised $70 million in equity and debt, comprising a $50 million round led by General Atlantic and a $20 million debt facility from HSBC Mexico.

France's Dottxt which offers a platform for interacting with large language models, raised $11.9 million from investors including Elaia and EQT Ventures.

Rift, a Dutch developer of industrial heating technology, closed an €11 million Series A from investors including Invest-NL, Rubio Impact Ventures and PGGM.

Cambri, a Helsinki-based AI consumer insights platform, secured €8 million from investors including Octopus Ventures, The 98 and S4S Ventures.

PitchBook webinar: ESG and Impact Investing in 2024

In our latest Sustainable Investment Survey, we focused on the "why" and "how" of investor strategies in today's climate and probed into the perception that impact implies concessionary returns.

Join Hilary Wiek, CFA, CAIA, senior strategist at PitchBook; Anikka Villegas, senior analyst, fund strategies & sustainable investing at PitchBook; and Matt Schey, ILPA's managing director of external affairs and sustainable investing, as they share key findings from the survey and spotlight current trends in the ecosystem.

Register now to secure your spot.

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PE Deals

Clayton, Dubilier & Rice will acquire the consumer health business of Sanofi in a deal valuing the unit at around €15 billion (about $16.3 billion), Bloomberg reported.

The board of Japan's Fuji Soft has voted to accept KKR's 558.4 billion yen (about $3.72 billion) buyout offer despite receiving a higher bid from Bain Capital, Reuters reported.

Life sciences specialist Red Nucleus has been acquired by THL Partners from The Riverside Company for over $750 million, PE Hub reported.

Aviation finance platform provider Aquila Air Capital has been acquired by Wafra from Warburg Pincus.

Splitero, a home equity fintech specialist, raised $300 million in a strategic investment from Antarctica Capital.

Portfolio Companies

Swedish battery-maker Northvolt will receive a $300 million debt and equity rescue package, Bloomberg reported.

Exits & IPOs

Platinum Equity may sell Aventiv Technologies, which provides telecommunications services to prisons, as the company faces potential bankruptcy.

Saudi technology service company Ejada Systems is seeking a valuation of as much $1.5 billion for a potential IPO in Riyadh, Bloomberg reported.

IT products company ITsavvy has been acquired by Nasdaq-listed Xerox from GenNx360 Capital Partners for $400 million.

Fotowatio Renewable Ventures is in talks to be sold by Abdul Latif Jameel in a deal that could value the renewable energy company around €2 billion (about $2.2 billion), Bloomberg reported.

Fundraising

San Francisco-based Emergence Capital has raised $1 billion for a new fund to invest in tech startups, Bloomberg reported.

Hong Kong-based Ping An Insurance has reached a $850 million close on its third overseas PE fund.

Czech Republic-based ARX Equity Partners has reached a €78 million first close on its fifth fund, which has a €125 billion hard cap.

Chart of the Day

Source: Q3 2024 PitchBook-NVCA Venture Monitor

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New GPs chase Europe's defense-tech boom

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