PitchBook News - Headwinds hit retail fintech VC funding

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The Daily Pitch: VC

November 18, 2024

Presented by Silicon Valley Bank

Today's Top Stories

Private equity's IPO hopefuls

The IPO market wasn't kind to PE firms in recent years, but the tide has turned.

The PE playbook is benefitting from an IPO rebound, which could lift broader dealmaking activity, according to our latest analyst note. Better financing conditions should spell further growth of public listings in 2025.

The note also lists 50 of the top US PE-backed prospects to go public over the next 12 months. Dive in.

Also...

💰 Non-bank venture lenders are profiting from a rise in loans to growth-stage startups. Venture debt deal value rose substantially this year, and the market is still feeling the effects of Silicon Valley Bank's collapse in March 2023. Full story.

🐴 Keep an eye out for Pony AI's IPO, which is expected later this week. The Chinese self-driving company, which is backed by Toyota and HongShang, set terms Thursday for its Nasdaq debut. It would be valued at about $4.6 billion at the midpoint of its price range, 45% less than its last private round.

Regulatory, political headwinds hit retail fintech dealmaking

VC funding for the retail fintech industry ebbed in Q3 as global challenges brought caution to the sector, according to our latest Emerging Tech Research. Startups added $2.4 billion across 103 deals—representing a QoQ decline of nearly 44% and over 39%, respectively.

Increased regulatory scrutiny has changed the landscape for banking-as-a-service providers, putting the largest, well-capitalized companies with strong technology in a better position to pursue bank partnerships. Other startups are working to integrate AI agents into their offerings, as they catch up with enterprise fintech companies that are doing the same.

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A message from Silicon Valley Bank

Fintechs navigate headwinds, AI offers reasons for optimism

SVB's new Future of Fintech 2024 report reveals a fintech sector that's cutting costs and finding opportunities in generative AI while managing headwinds from higher interest rates and heightened regulatory oversight and security concerns. A nearly 80% improvement in year-over-year EBITDA margins demonstrates how founders remain laser-focused on efficiency.

The report shows that VC investment remains muted, hovering near a six-year low for the sector, as deal flow has shifted toward the early stage, with more than three seed deals for every one Series A. AI is also emerging as a bright spot for the industry as investors and founders explore its growing role in the sector.

Access the full report to gain exclusive insights, data-driven analysis and expert commentary on the future of fintech.

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The 10 most active US investors in European VC deals

(Smith Collection/Gado/Getty Images)

US VC investors are warming back up to European startups after a brief slip last year. 2024 is on track to see its second-highest level of participation in a decade.

Who invests the most? Our list of the most active US VC investors in Europe includes Sequoia Capital, Insight Partners and FJ Labs.

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Since yesterday, the PitchBook Platform added:

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VC Deals

SpaceX is launching a tender offer next month priced at $135 per share, which could give Elon Musk's company a valuation over $250 billion, the Financial Times reported.

Beta Bionics, which develops medical technology for diabetes management, raised a $60 million Series E led by Wellington Management.

Plantible, a California-based startup creating plant-based proteins, raised a $30 million Series B led by Piva Capital and Siddhi Capital.

Bit Odd, a Finnish gaming studio, raised €17 million in a funding round led by Griffin Gaming Partners.

Hong Kong-based financing startup Micro Connect raised over $15 million from Jane Street, the Financial Times reported.

Gendo, an architecture AI design platform based in London, raised €5.1 million in a seed round co-led by PT1 and LEA Partners.

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

KKR increased its offer for software company Fuji Soft. The deal values the Japan-based company at roughly 637 billion yen (about $4.1 billion), which is 1 yen per share more than an earlier offer from Bain Capital.

Nordic Capital plans to acquire patent software company Anaqua from Astorg Partners in a $2.5 billion deal, Bloomberg reported.

Triton acquired MacGregor, a Finnish cargo-maker, at an enterprise value of €480 million.

French firm Amundi acquired Aixigo, a Germany-based wealth management software specialist, for €149 million.

Apax Partners is in the lead to buy Quid Informatica, an Italian banking and credit process management specialist, from Equinox, Reuters reported.

Inflexion invested in Germany's Finanzen.net Group, an online trading and financial news company.

STG Partners invested in TaxCalc, a UK-based tax and accountancy software developer.

Exits

Diligent, which offers software for business executives, is in talks to be sold by Insight Partners, Blackstone and Clearlake, Reuters reported. The deal could value Diligent at around $7 billion.

Macquarie Capital is considering selling its stake in a telecommunications tower business based in the Philippines that was created by combining PhilTower and Miescor Infrastructure Development, Bloomberg reported. The unit could be valued at up to $800 million.

Zdata Technologies, a China-based data center company, is considering a Hong Kong IPO that could value the business at up to $5 billion, Bloomberg reported.

Fundraising

Rosberg Ventures, which is owned by former Formula One driver Nico Rosberg, raised $100 million for its VC fund-of-funds, Forbes reported.

Chart of the Day

Source: These 10 startups creating humanoid robots have raised the most cash

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PitchBook News - Headwinds hit retail fintech VC funding

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