PitchBook News - AI's VC arms race heats up

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The Daily Pitch: VC

November 27, 2024

Presented by Banc of California’s Venture Banking Group

Today's Top Stories

🔥 The AI infrastructure arms race is heating up. Billion-dollar deals for foundation model startups like OpenAI and Safe Superintelligence drove VC funding to $31.1 billion in Q3, according to our latest Artificial Intelligence & Machine Learning Report.

The report dives into areas of opportunity including AI for the slow-to-change legal field and tech that acts as a conductor for multiple large language models. Read more.

💸 Blackstone is tapping a $1 billion Santander loan portfolio to beef up its infrastructure credit strategy. These assets make a sensible marriage for money from the asset manager's fast-growing insurance channel. Full story

🖥️ PE firm GTCR took a $1.3 billion minority stake in Tricentis, a software developer that tests enterprise applications. The deal, which valued the Insight Partners-backed company at $4.5 billion including debt, follows a robust Q3 for software PE investments. Go deeper.

🥡Food delivery group JustEat is to delist from the London Stock Exchange. The bourse has hemorrhaged companies being lured away by better valuations and more favorable regulation elsewhere. Read more

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UK private-market deal value dips in Q3

(Julia Midkiff/PitchBook News)

Private market dealmaking in the UK was sluggish in the third quarter of the year, PitchBook’s Q3 2024 UK Market Snapshot shows, with private equity and venture capital seeing dips in deal value. Fundraising for both asset classes has noticeably improved and is currently pacing higher than last year.

The UK’s economy showed strength in the quarter as inflation fell below the Bank of England’s 2% target. FTSE 100 returns slightly outperformed the Stoxx Europe—a broad measure of the European equity market—boosted by outperformance in basic materials.

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A message from Banc of California’s Venture Banking Group

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With nearly two decades of industry expertise, Banc of California’s Venture Banking Group is committed to fostering innovation and growth.

The team of seasoned experts supports entrepreneurs at every stage – from garage to IPO and beyond – with high-touch service, fast turnarounds, competitive credit terms and tailored banking solutions. By building enduring relationships based on trust, the dedicated team empowers visionary companies to achieve their goals.

Choose a banking partner that truly understands the innovative spirit of the venture ecosystem. Connect with a venture banking specialist who understands your industry and is ready to support your growth.

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Gummy candy maker Yupi sold in year’s biggest SE Asia buyout

(Dusica Marjanovic/Getty Images)

Hong Kong-based Affinity Equity Partners has bought Indonesian gummy candy maker Yupi for $1.2 billion, making it the biggest buyout deal in Southeast Asia this year.

Southeast Asia's private market has been regaining momentum. PE buyout deal value took a hit during the wider market downturn in 2023, but it’s up 50% this year.

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Corporate buyers keep the upper hand in M&A market share

Over the last two years, corporate-led deals have claimed a growing share of global M&A dealmaking as PE has struggled to regain its position, according to our recent analyst note.

PE's share of total M&A deal count slipped from a record 36.4% in 2021 to 33.5% in 2023. Its portion of deal value declined from nearly 45% in 2022 to around 40% in 2023.

Headwinds to PE dealmaking appear to persist. GPs' dry powder is shrinking amid a tepid exit environment and a slowing fundraising market, while corporate buyers have maintained liberal cash reserves, PitchBook’s Jinny Choi writes.

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VC Deals

Yubi, an Indian fintech startup backed by investors including Insight Partners, seeks up to $200 million in fresh funding, Bloomberg reported.

Amsterdam-based Cradle, which develops an AI-powered protein programming platform, received a $73 million Series B led by IVP.

Cloud backup specialist Eon raised a $70 million Series C led by Bond that values the company at $1.4 billion.

San Francisco-based /dev/Agents, which develops an operating system for AI agents, raised a $56 million seed round led by Index Ventures and CapitalG.

Fintech startup Cardless, which operates credit card and loyalty programs, raised a $30 million round led by Activant Capital.

Range, a startup developing AI for wealth management services, raised a $28 million Series B led by Cathay Innovation.

Ampeco, a Bulgarian EV charging management company, raised a $26 million Series B led by Revaia.

Wherobots, which specializes in geospatial technology, raised a $21.5 million Series A led by Felicis.

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.

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PE Deals

TPG is in discussions to acquire Siemens Energy’s Gamesa wind energy assets in India for over $300 million, Bloomberg reported.

Keensight Capital acquired a minority stake in Advancis Software & Services, a physical security software.

Cybersecurity platform developer IDX has been acquired by Kingswood Capital Management.

Exits

Stahl Holdings, manufacturer of chemical coatings, maybe be sold by Wendel at a valuation of up to €2 billion, Bloomberg reported.

Apotea, an online pharmacy operator backed by Creades and Beijer Ventures, is looking to raise 1.64 billion Swedish kronor (about $149 million) in its IPO.

Texas-based Mercury Financial, a credit card platform developer owned by Värde Partners, is in talks for a sale, Bloomberg reported.

EQT-owned Indira IVF, the largest IVF provider in India, may pursue an IPO in which the company could raise around $400 million, Bloomberg reported.

CVC Capital Partners is in talks to sell its majority stake in Italian drug manufacturer Recordati, Reuters reported.

Fundraising

UK-based impact investor LeapFrog held a $1.02 billion close for its fourth fund, beating its initial target of $1 billion.

RCG Ventures is targeting $650 million in commitments for its eighth fund, according to SEC filings.

Chart of the Day

Source: PitchBook Analyst Note: Top US PE-Backed IPO Candidates and Outlook

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PitchBook News - AI's VC arms race heats up

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