PitchBook News - Fund performance down but not out

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The Daily Pitch: VC

November 13, 2024

Presented by Golub Growth

Today's Top Stories

Market upswing to lift fund returns

Private fund returns continue to lag historical averages, but a rising tide is coming, according to our latest Global Fund Performance Report.

Interest rate cuts in the US and Europe, as well as stimulus in China, have lifted assets across the board. Our Private Capital Barometers point to positive recent performance across PE, VC, private debt, infrastructure and natural resources.

But back in Q1, the most recent quarter with available fund performance data, real assets was the only strategy to beat its 10-year return. For PE, returns remained in the single digits, and VC funds stayed in the red. The recovery in exits and deal activity may translate to better Q2 returns. Read the report.

Also...

⛰️ $70 billion infrastructure investor Stonepeak is bolstering its lending capabilities in digital infrastructure by acquiring specialist private credit investor Boundary Street Capital. The deal coincides with a frenzy of data center investment, which should lead to a flood of refinancing activities in the coming years. Go deeper.

💻 German investor DTCP will invest £1 billion (around $1.3 billion) in a new UK data center, a deal that highlights Europe's push to meet skyrocketing global demand for digital infrastructure. Read more.

📦 The bidding war between Brookfield and Segro for warehouse REIT Tritax Eurobox has been resolved. Brookfield will sell 30% of the portfolio to rival Segro after its offer was accepted by Tritax's board. Full story.

SoftBank Vision Funds architect departs just as gains jump

SoftBank's Rajeev Misra
(Michael Kovac/Getty Images)

Rajeev Misra, co-CEO of SoftBank Investment Advisers and one of the top brass behind the Vision Funds, is leaving SoftBank—just as Vision Fund I returned its biggest gains in years.

SoftBank Group reported a net profit of $7.66 billion in the last quarter, including $3 billion in gains from SoftBank Vision Fund I and $913 million from Vision Fund II. Behind much of the investment gain is the performance of Coupang and DiDi out of Fund I and Revolut and Klarna out of Fund II.

Misra's exit is the culmination of a slow turnover of SoftBank's old guard.

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Golub Growth has over a decade of specialized experience providing financing solutions to growing #SaaS companies.

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Crypto VCs wager on the future of gambling

The price of bitcoin and interest in crypto-based prediction markets soared following the US presidential election.

By comparison, VC funding for crypto startups has been glum. Total deal value declined to $1.7 billion in Q3, down 31.3% from the previous quarter, a surprise halt to the sector's strong momentum built over the preceding quarters, according to our latest Emerging Tech Research.

But it's too soon to bet against crypto—and wagering with it might just be the next big thing. Decentralized, crypto-based prediction markets are poised to ride a wave of excitement hitting the betting industry that is projected to generate $45 billion per year in the US alone. But with plenty of regulatory and economic risks, investing in the segment is a gamble.

read the preview

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A spotlight on Asia-Pacific's fintech ecosystems

Rapidly expanding economies, growing middle classes and large underbanked populations seeking financial access across the Asia-Pacific region have led to the birth of several notable fintech startups.

But companies face challenges due to geopolitical tensions, regulatory shifts and market differences. Deal count and value are both down since 2018, with just $2.3 billion invested in 186 deals across the region in H1 2024.

Our recent analyst note, separated into five parts to cover each geographical sector in detail, highlights VC dealmaking and emerging opportunities across fintech companies in Japan, Southeast Asia, India, Greater China and Australia & New Zealand.

read it now

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The Daily Benchmark:
2020 Vintage Global PE Funds

Median IRR

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0.09x

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OpCapita Consumer Opportunities Fund III

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People

Donald Trump Jr. is joining as a partner at 1789 Capital, a VC firm targeting companies with conservative audiences.

Vista Equity Partners replaced global head of capital and partner solutions Greg Myers with co-heads Cheryl Leahy and Stephen Seelbach, Bloomberg reported.

Co-founder Greg Brockman has returned to work at OpenAI after taking leave from the startup in August, Bloomberg reported.

VC Deals

Canadian fintech startup Neo Financial raised a C$360 million (about $258 million) Series D consisting of C$110 million in equity and C$250 million in debt. Participating investors included Tobi Lütke, Stewart Butterfield and David Baszucki.

Mumbai-based grocery delivery startup Zepto is looking to raise $250 million from investors including Motilal Oswal, IIFL and InCred at a $5 billion valuation, Mint reported.

Writer, which is developing a generative AI platform, raised a $200 million Series C led by Premji Invest, Radical Ventures and Iconiq Growth. The round values Writer at $1.9 billion.

Switzerland-based Alentis Therapeutics, a biotech company developing treatments for tumors, raised a $181.4 million Series D led by OrbiMed, Novo Holdings and Jeito Capital.

Firefly Aerospace, a spacecraft manufacturer based in Texas, raised $175 million as a part of a Series D. The investment, led by RPM Ventures, values the startup at over $2 billion.

Trace Neuroscience, a newly launched biotech startup developing treatment for degenerative diseases like ALS, raised a $101 million Series A led by Third Rock Ventures.

SmartBank, a Tokyo-based startup developing tools for consumers to manage cashless payments, raised a 4 billion Japanese yen (about $26 million) round consisting of $18.8 million in equity from Global Brain and $7.2 million in debt.

India-based UnifyApps, an AI platform for custom applications, raised $20 million from Iconiq Growth.

Tomorrow, a Hamburg-based sustainable banking provider, raised €5 million from Abacon Capital, ETF Partners, Kopa Ventures and IFB Innovationsstarter.

Don't miss our upcoming webinar

European collateralized loan obligations are on track to end the year with record issuance, which boosted loan demand and set off 2024's third repricing wave in September. Meanwhile, there is hope for a resurgence of M&A activity. In this webinar, our credit experts will discuss how supply and demand technicals are driving conditions across syndicated markets as demand for debt takes pricing back toward pre-2022 levels. Key topics include:

Supply and demand dynamics in the broadly syndicated market.

Impact of a declining rate environment for bond and loan issuance.

The exit puzzle private credit lenders face.

Register now to secure your spot.

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PE Deals

Bridgepoint acquired Schuberg Philis, a Netherlands-based IT consultant for mission-critical IT services and cloud-native solutions.

BGF invested in BWP Group, a marketing agency based in the UK.

Bain Capital has delayed its tender offer for Japan's Fuji Soft to mid-to-late November as it awaits company approval.

Fortress Investment Group acquired Curzon, a UK cinema chain and film company.

Cross-border compliance specialist Vialto Partners raised $225 million from investors including HPS Investment Partners and Clayton, Dubilier & Rice.

Exits & IPOs

Gear parts manufacturer Flender could be put up for sale by The Carlyle Group as the firm seeks to exit the business, which could be valued around €3 billion to €4 billion, Bloomberg reported.

Neural Magic, a startup that optimizes AI models, was acquired by open source software company Red Hat.

Vinter, which provides European cryptocurrency indexes, has been acquired by data provider Kaiko.

DeA Capital sold 35% of Wisecap Group, an Italy-based plastic closures manufacturer for the beverages industry.

Fundraising

London-headquartered AshGrove Capital closed AshGrove Specialty Lending Fund II at €650 million hard cap.

Forerunner Ventures, a San Francisco-based VC firm, launched its latest fund with a target of $500 million in commitments. The fund will focus on early-stage investments in startups integrating AI.

Corporate M&A

Activist investor Elliot Investment Management has built a $5 billion stake in Honeywell in an effort to break the company into two separate businesses.

Chart of the Day

Source: Exploring APAC's Fintech Pathways

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PitchBook News - Fund performance down but not out

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