PitchBook News - What felled agtech leader Bowery?

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The Daily Pitch: VC

November 11, 2024

Presented by Golub Growth

Today's Top Stories

Lettuce grows in Bowery's Maryland facility.
(Andrew Caballero-Reynolds/Getty Images)

Bowery's collapse highlights a grim run for indoor farming.

Indoor farming startups won over agtech investors with bold promises to revolutionize agriculture. But over the past year, several have run out of money, capped by the news of industry leader Bowery Farming shutting down earlier this month (as revealed by PitchBook's Rosie Bradbury).

In today's follow-up article, Rosie details the factors contributing to the demise of an agtech posterchild that raised over $700 million from investors. The company, which at its peak was valued at $2.3 billion, suffered heavy losses after a leaf-eating pathogen invaded its crops and became a persistent challenge. In the aftermath, big grocery partners like Albertsons and Whole Foods dropped Bowery, and the company never recovered from the blow. Full story.

Also...

🤝Eyes on corporate dealmakers: Mergers and acquisitions are gradually coming back to life, a trend expected to accelerate now that the US elections are in the rearview mirror. Over the last two years, corporate-led deals have claimed a growing share of global M&A dealmaking as PE dealmakers have struggled to regain their position, PitchBook analyst Jinny Choi writes in our latest analyst note.

🤖Humanlike robotics on the march: More startups are experimenting and deploying humanoid robots in fields from manufacturing to medicine, raising nearly $300 million in VC last year. In 2024 the industry already has exceeded that total. PitchBook's Jacob Robbins highlights the 10 VC-backed startups leading the way in gathering capital for their robotic ambitions. Read the story.

PE's golden asset in healthcare IT boom

PE dealmaking in healthcare IT jumped in Q3, putting 2024 on track to be one of the strongest years on record for the sector.

Revenue cycle management—a segment that focuses on managing medical billing and payments—is at the forefront, attracting fierce competition with valuation multiples reaching over 20x EBITDA, according to our analyst note. Interest is also rising in areas like remote patient monitoring and specialty cost containment.

The note also highlights standout deals, including the financing of R1 RCM's take-private pact as well as Surescripts' staggering valuation.

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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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Energy transition infrastructure specialists raise $215B since 2014

LPs have committed $892 billion to infrastructure funds engaging in some degree of energy transition investment since 2014, nearly a quarter of which has gone to specialist funds, PitchBook's Anikka Villegas reports in our recent analyst note.

Fund performance has improved over time, thanks both to government support and better technology.

Specialist funds have proliferated as LPs seek out specific exposure, driven in part by stakeholder pressure.

Future returns could benefit from increased energy demand, continued government support and the low cost of operating renewable energy infrastructure.

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People

PGIM has hired Jacques Chappuis as president and CEO. Chappuis formerly worked as the co-head of Morgan Stanley Investment Management.

VC Deals

ZE Energy, a Paris-based renewable energy startup, raised €54 million in a round led by Amundi Transition Énergétique.

Ecommerce financial software and banking products developer Parker raised a $20 million Series B led by Valar Ventures.

Forefront RF, a UK-based fabless semiconductor startup, closed a £16 million Series A from investors including BGF, Foresight Group and Octopus Ventures.

Fractional, which helps buyers co-own property investments, raised a $15 million Series A led by Fifth Wall Ventures, Axios reported.

Semiconductor and aircraft materials manufacturer Boston Materials raised a $13.5 million round led by AccelR8 and Diamond Edge Ventures.

Satellite intelligence and data startup Ursa Space Systems raised $10 million in a venture loan facility from Horizon Technology Finance Corporation.

PE Deals

Temasek and Singapore's sovereign wealth fund GIC are looking to buy a minority stake in Chinese household appliance maker Haier's Indian unit, Bloomberg reported. The deal values the Indian assets at up to $5 billion.

Talde Private Equity bought a majority stake in Discarlux, a Spain-based distributor of premium read meat.

Performance Home Medical, which provides home medical equipment, raised $55 million from Grant Avenue Capital, Axios reported.

Encapture, a document automation platform developer, has been acquired by Thoma Bravo-backed SMA Technologies.

Key trends shaping the future of Impact and ESG

Our fifth annual Sustainable Investment Survey reveals a compelling shift in the investment landscape: Despite the controversies surrounding ESG and Impact, practitioners are not just adapting but innovating. With insights from over 1,000 global respondents, including asset owners, VCs and family offices, this survey uncovers the strategies and motivations driving ESG and Impact practitioners. We also delve into the perspectives of those who have opted not to incorporate ESG into their investment programs, shedding light on their rationale and decision-making processes.

Our Sustainable Investment Survey is just one of many ESG and Impact research efforts we provide to help investors create a double bottom line of financial returns and positive social or environmental impact. PitchBook Research helps our customers navigate complexity across the entire investment cycle, including contextualizing sustained trends in evolving spaces such as ESG.

Download our report.

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Portfolio Companies

Drivers for Bolt, a VC-backed ride-hailing startup headquartered in Estonia, won a UK employment tribunal ruling recognizing them as workers. The decision, which means they secure rights to paid holidays and a minimum wage, could be worth more than £200 million in compensation.

Exits & IPOs

Jeppesen, an aircraft navigation company, is in talks to be sold by owner Boeing in a deal that could value the unit at around $6 billion, Bloomberg reported.

Kioxia Holdings, a PE-backed Japanese flash memory maker, filed for an IPO on the Tokyo Stock Exchange by June.

Montreal-based fashion retailer Groupe Dynamite filed for an IPO.

Partners Group is considering selling a stake in UK-based International Schools Partnership, which operates private international schools in a variety of countries.

Convenience store operator Refuel is in talks to be sold by PE firm First Reserve in a deal that could value the business at over $1.5 billion, Reuters reported.

Fundraising

Spanish private equity firm Artá Capital closed Fund III at its €400 million target.

San Francisco-based Cendana Capital launched its latest fund, Cendana Capital VI, with a target of $350 million, according to SEC filings.

Healthier Capital, a Bay Area-based VC firm, launched its first fund with a target of $200 million, according to SEC filings.

Chart of the Day

Source: PE sells best assets first in exit value revival

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PitchBook News - What felled agtech leader Bowery?

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