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The Daily Pitch: VC

November 4, 2024

The Daily Pitch is powered by PitchBook’s industry-defining research and best-in-class data

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The startup world is still struggling with burnout.

In a new survey by Balderton Capital, more than two-thirds of entrepreneurs said burnout is a significant problem in the startup ecosystem. That's a higher number than last year and could be a sign of the toll today's tough VC dealmaking environment is taking.

PitchBook's Leah Hodgson spoke to Balderton's Suranga Chandratillake about how investors can move the needle on founder mental health:

"There are definitely VCs who believe that being a founder is all about sleeping bags in the office and living off ramen. ... But pretending that that's the only way one can build a business is dangerous because it means that a whole bunch of other people feel they can't be a founder when they absolutely can." Full story

Also...

🚜 Agtech unicorn Bowery Farming has shut down, according to a document seen by PitchBook. Backed by General Catalyst, GV, Temasek and Fidelity, the indoor farming company had been valued as high as $2.3 billion. Go deeper.

🤖Istanbul-based Insider just raised $500 million and is looking to make some buys. The company, which develops AI-driven marketing software, plans to use the Series E funding for strategic acquisitions, R&D and more. Venture M&A has been stagnant, which could make this a good time to go shopping. Read more.

Pressure builds on the 10-year VC fund lifecycle

Ten years has been the standard venture fund lifecycle for decades, with little reason for change. As the market grew out of the global financial crisis, companies remained private longer, altering the more standard return timelines for VC funds.

Today, unicorns account for almost two-thirds of VC market value, and nearly 40% of US unicorn companies are nine years old or older, according to our latest analyst note. Some of the industry's biggest wins come from older unicorns. Uber and Roblox both took over eight years to go public, but both returned over 50 times their initial invested capital.

For many funds and their LPs, extending the lifecycle is necessary to reap the rewards of risk. But as the data shows, fund extensions don't necessarily translate into the expected distributions.

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Market Map: Application security defends software's next generation

(Thomas Samson/AFP via Getty Images)

AI is coming for the information security industry, with startups pivoting to protect the next generation of applications and services. Our latest market map covers the application security space—the companies providing support and defense for software.

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October 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.

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M&A market is picking up steam

The M&A recovery is hitting its stride, according to our Q3 2024 Global M&A Report, sponsored by Liberty GTS, RSM and RBC Capital Markets. The first three quarters saw a marked acceleration in M&A activity—total deal value rose more than 27% from last year, and deal count increased over 13%.

And PE is finally getting in on the action, benefitting from a "stealth" rate-cut cycle as big banks have returned to the deal lending market. PE's share of M&A deal value climbed to over 41% year-to-date, bouncing back to its five-year average after slipping in 2023.

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Since yesterday, the PitchBook Platform added:

34

People

15

Companies

See what our data software can do

The Daily Benchmark:
2017 Vintage Global Real Assets Funds

Median IRR

11.15%

Top Quartile IRR

13.95%

0.50x

Median DPI

Select top performers

Ridgemont Equity Partners Energy Opportunity Fund

EIV Capital Fund III

Carnelian Energy Capital II

*IRR: net of fees

58 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

VC Deals

Accounting platform developer Melio raised a $150 million Series E led by Fiserv that values the company at $2 billion.

Behavox, a compliance service specialist for the financial industry, raised a $70 million credit facility from Hercules Capital.

Kalshi, developer of a platform for betting on the outcome of events like the US presidential election, is in talks to raise over $50 million, TechCrunch reported.

Blockchain renewable energy startup Glow, which focuses on solar power, raised $30 million led by Framework Ventures and Union Square Ventures, Fortune reported.

AI infrastructure platform developer Decart, which just released a so-called open-world AI model, raised a $21 million seed round led by Sequoia.

Kanpla, a Danish contract catering management platform, raised an €8 million Series A led by HenQ.

Don't miss our upcoming webinar

2024 is showing signs of recovery for the venture market, with macroeconomics providing more support for valuations in both late and early stages. However, some areas of the market are still pacing below trough 2023 levels, and it is unclear if a full rationalisation has taken place.

While various areas of the venture ecosystem emerge as clear winners, our experts are analyzing which parts of deals, exits and fundraising are showing resilience and how they could impact the coming months. In this webinar, industry experts and PitchBook analysts will share findings from our Q3 2024 European Venture Report, sponsored by J.P. Morgan, and provide insights on market trends, IPO windows, and unicorn valuations.

Register now to secure your spot.

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PE Deals

ECI Partners acquired a majority stake in Croud, a UK-based global digital marketing company.

Lionheart Capital and Orienta Capital Partners bought yacht maker Sunseeker International from Dalian Wanda Group for approximately £160 million, Bloomberg reported.

Adam Ecotech, which owns and operates data centers in Spain, has been acquired by CVC Capital Partners from Ogic Informatica.

Nabiax, a Spain-based data center operator, is in talks to be acquired by Aermont Capital after the firm submitted the highest offer for the company, Reuters reported.

BC Partners Credit has acquired investment adviser Runway Growth Capital.

Insurance software developer Finys has begun a strategic partnership with Serent Capital.

Exits & IPOs

Photo editing app developer Pixelmator, based in Lithuania, has been acquired by Apple.

Apollo-backed Autodoc, a German online auto parts dealer, selected banks for a potential initial public offering in Frankfurt, Bloomberg reported.

SK Capital-backed Apotex, a Canada-based manufacturer of generic drugs, is planning a 2025 IPO, Bloomberg reported.

Stada Arzneimittel's private equity owners appointed Deutsche Bank and Goldman Sachs as global coordinators for a potential IPO, Bloomberg reported.

Sparta Science, a Bay Area-based startup developing health tracking technology, has been acquired by Oura, a maker of wearable health tracking rings.

Global Critical Logistics, a provider of logistical support for live events, is in talks to be sold by ATL Partners, Bloomberg reported.

Fundraising

Invidia Capital Management has launched its first fund. Targeted at $850 million, it will invest in upper-middle-market healthcare companies, Fortune reported.

Theory Ventures has launched its second fund, which has a target of $450 million, according to SEC filings.

Chart of the Day

Source: A year on, war has not undone Israeli VC—but leaves indelible mark

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PitchBook News - How market stress burns out founders

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