VCs seek slice of $7T private wealth pie

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The Daily Pitch: VC

November 25, 2024

Presented by Banc of California’s Venture Banking Group

Today's Top Stories

VC vies for a slice of $7T private wealth pie

There’s a silver lining to venture capital’s exit stalemate, according to our latest analyst note: a prime opportunity for private wealth investors to buy low.

High-net-worth individuals have about $450 trillion at their disposal. They’re expected to plow more than $7 trillion into private markets by 2033.

The rise of the secondary market for startup shares demonstrates significant demand from private wealth. And leading VC firms like Sequoia and Andreessen Horowitz are already changing their strategies to tap this market. Get the report.

Also...

👉 Finnish LPs are warming up to defense investments as the Russia-Ukraine war wages on. Jessica Hamlin reports that the country's institutional investors aren't quick to abandon their longstanding neutrality, but they’re warming up to the idea as tensions escalate.

“Defense investing is very taboo in Finland,” said the CIO of a university endowment. Full story.

😷 Honeywell will divest its personal protection equipment unit to a PE-backed company for $1.33 billion. The move aligns with a broader trend of large companies offloading non-core assets to strengthen their balance sheets. Read more.

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Clean energy bets powered up in Q3

(Drew Sanders/PitchBook News)

Q3 was the best quarter for VC deal flow into clean energy companies since Q4 2022, as investors take bigger swings on battery energy storage, grid management and even fusion, according to PitchBook’s Q3 2024 Clean Energy Report. Even Northvolt’s descent into bankruptcy doesn’t seem to have put a dent into fundraising for clean energy alternatives.

The AI industry’s demands on data centers are pushing investors into uncharted territory. Ten fusion startups raised VC rounds in Q3, including four rounds over $50 million.

read the report

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Reporter's notebook: Talking AI, IPOs and Trump at Helsinki's Slush

(Riikka Vaahtera/Slush photo)

A rebound in VC dealmaking looks likely in 2025, according to VCs gathered at Helsinki startup conference Slush.

The future of AI was the dominant theme of the conference, with funding expected to flow into the technology even more quickly in 2025 than it did this year.

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VC Deals

Zepto, an Indian grocery delivery startup, raised $350 million in a round led by Motilal Oswal.

Last mile delivery and logistics startup OneRail, which is based in Orlando, has raised a $42 million Series C led by Aliment Capital.

San Jose-based AI networking startup Aviz Networks has raised a $17 million Series A led by Alter Venture Partners.

Palo Alto-based Teleo, a startup building autonomous heavy machinery, has raised a $16.2 million Series A extension led by UP.Partners.

Swedish-based startup Candela has raised an additional $14 million in its Series C round for its electric aquatic transportation technology, from EQT Ventures and SEB Private Equity.

PE Deals

Goldman Sachs has acquired Melita, a company that provides telecommunication and infrastructure services, from EQT.

Oaktree Capital is finalizing a $225 million unitranche loan to back a stake in AZ Nex Generation Advisory, an Australian-headquartered collective of accounting and financial advisory firms.

IK Partners plans to acquire Driescher, a German maker of power switches.

HIG Capital completed its acquisition of Northwest Pump and Equipment, which services the fueling and industrial sectors.

Hg and Spectrum Equity have made a strategic investment in Empyrean Solutions, to broaden its data-processing product suite.

Marathon Asset Management has completed its acquisition of Sunbelt Modular, a manufacturer of modular building solutions.

First Source Electronics, a warehouse-automation division of Nasdaq-listed Commercial Vehicle Group, has been purchased by Woodson Equity.

TH Holdings, owner of brands including Texas Hydraulics, Hydromotion and Oilgear, has been acquired by Fortress Investment Group.

Portfolio Companies

Northvolt filed for Chapter 11 bankruptcy and saw its CEO resign after failing to agree on a last-minute rescue package with its investors.

Exits

In a distressed deal, Moksha Group acquired VC-backed Arzooo, a provider of ecommerce options for physical retailers that was once valued at $310 million.

NYSE-listed Snowflake has acquired the General Catalyst-backed AI model developer Datavolo.

IT services provider N-able is buying venture-backed enterprise security operations startup Adlumin.

Blackstone, The Carlyle Group and Hellman & Friedman seek upwards of $5 billion in an IPO for Medline Industries, Reuters reported.

AEA Investors and Battery Ventures have sold Process Sensing Technologies to Dwyer Omega, a provider of sensors and instrumentation solutions.

APi Group has acquired safety specialist Endeavor Fire Protection from Building Industry Partners.

Fundraising

A consortium led by South African private equity firm Harith General Partners agreed to buy out the Pan African Infrastructure Development Fund for $360 million.

Theory Ventures has raised $450 million for its second flagship fund focused on investments in AI and web3.

Fund of funds manager, Illumen Capital has raised $32.7 million for Illumen Catalyst Fund that will focus on first time fund managers and entrepreneurs.

Chart of the Day

Source: Q3 2024 Biopharma Report

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VCs seek slice of $7T private wealth pie

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