PitchBook News - VC bottoms out, but fails to bounce

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The Daily Pitch: VC

October 23, 2024

Presented by SRS Acquiom

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

Mubadala closes a $3 billion-plus middle-market fund to capitalize on the PE exit drought

The PitchBook-NVCA Venture Monitor finds the rate of cash flow returning to LPs in US VC funds is slower than at any other point since the global financial crisis

Our Q3 valuations data for public companies in the gaming sector

Europe's venture debt dealmaking is picking up

Today's Top Stories

VC dealmaking bottoms, but fails to bounce

Venture investment is on pace to top $175 billion this year, surpassing both last year and 2020 levels. But a more forceful recovery is being held back by the ongoing lack of liquidity, according to the Q3 2024 PitchBook-NVCA Venture Monitor, sponsored by J.P. Morgan, Dentons and Deloitte.

The slowdown has spurred some VC firms to ramp up due diligence and push for more investor protections in term sheets. But many other investors have simply left the market, either because their funds have dried up or because they are hesitant to call more LP capital.

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Venture debt activity on the rebound in Europe

(Image courtesy of Northvolt)

After a significant drop last year, venture debt dealmaking in Europe is on the rise, with deal value for 2024 already exceeding last year's total.

Mature VC-backed companies are driving the rebound and pushing deal sizes higher.

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Biopharma, AI propel unicorn indexes to new highs

The PitchBook-Morningstar unicorn indexes have been rising faster than at any other point this year, a hopeful signal for the mountain of billion-dollar VC-backed companies waiting to go public.

Since August, our global and US unicorn indexes have climbed 11%, bringing their growth in the past 12 months to 30%. At the industry level, biopharma unicorns have led the way, followed by AI and fintech companies.

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Since yesterday, the PitchBook Platform added:

2284

People

786

Companies

29

Funds

See what our data software can do

The Daily Benchmark:
2019 Vintage Global PE Funds

Median IRR

17.04%

Top Quartile IRR

23.15%

0.19x

Median DPI

Select top performers

Incline Elevate Fund

Sterling Investment Partners IV

Thomas H. Lee Equity Fund VI

*IRR: net of fees

170 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

VC Deals

Kneron is in talks to raise $300 million at a $1 billion valuation. The round is expected to be the AI chip startup's last before going public, Bloomberg reported.

Biotech startup AvenCell Therapeutics raised a $112 million Series B led by Novo Holdings.

One Zero, a Tel Aviv-based digital bank, is raising $100 million, TechCrunch reported.

Globality, a Bay Area-based developer of sourcing software that uses AI, raised a $47 million Series D preferred stock offering.

Open-source supply chain security company Socket raised a $40 million Series B led by Abstract Ventures.

OneStep, a healthtech startup, raised a $36 million Series B led by Team8 and Vintage Investment Partners, Axios reported.

Neysa, a Mumbai-based provider of AI acceleration cloud systems, received a $30 million Series A led by NTTVC, Z47 and Nexus Venture Partners.

AI video generation startup Genmo raised a $28.4 million Series A led by NEA.

Oxla, a Warsaw-based distributed analytical database, raised an $11 million seed round from investors including TQ Ventures, Lead Ventures and 4growth VC.

PE Deals

Mubadala is nearing a deal to acquire a minority stake in Zelis that would value the healthtech specialist at around $17 billion, Bloomberg reported.

Dye & Durham, a Canada-based legal software provider, is in talks to be acquired by potential buyers that include US-based PE firms, Bloomberg reported.

Morgan Stanley Investment Partners invested in Flexential, which operates data centers across the US.

The Carlyle Group has dropped out of the bidding process for Thyssenkrupp's marine systems unit, Bloomberg reported.

Tech support specialist Likewize has been acquired by Genstar Capital after the firm increased its investment to a majority stake.

Voortman Cookies, the cookie business of J.M. Smucker, has been sold to Second Nature Brands, a portfolio company of CapVest Partners.

HIG Capital acquired Rainham Industrial Services, a UK-based provider of industrial installation, maintenance and refurbishment services.

Main Capital Partners exited German HR software provider Perbility to Rivean Capital.

Exits & IPOs

Autonomous driving company Horizon Robotics, based in China, priced its Hong Kong IPO at HK$5.4 billion (about $696 million).

Materia, a VC-backed startup developing an AI tax and accounting platform, has been acquired by Thomson Reuters.

IFCO, a company that makes plastic containers, is in talks to be sold by Triton Partners in a deal that could value it at around €5 billion, Bloomberg reported.

Fundraising

Miami-based Trivest Partners raised $730 million at the close of its third growth investment fund.

Stifel Financial gained federal approval for a new fund targeted at aerospace and defense manufacturers in the US.

Texas-based Greenridge Growth Partners raised $255 million for its second fund, which will invest in B2B software companies.

London-based consumer-focused VC firm Dmg Ventures closed a £25 million early-stage fund and a £25 million growth-stage fund.

Corporate M&A

Paris-based investment firm Wendel has agreed to buy 75% of private credit-focused asset manager Monroe Capital for $1.13 billion.

Chart of the Day

Source: Q3 2024 PitchBook-NVCA Venture Monitor

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PitchBook News - VC bottoms out, but fails to bounce

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