PitchBook News - Databricks topples OpenAI in VC record

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The Daily Pitch: VC

December 18, 2024

Presented by Fidelity Private Shares^SM

👑 Databricks dethroned OpenAI for the title of 2024's largest VC deal with an $8.6 billion haul led by Thrive Capital. The ongoing Series J could get bigger: The AI analytics and infrastructure company is targeting $10 billion in total at a $62 billion valuation. Read more.

⚖️ The FDIC is considering suing former Silicon Valley Bank executives. The US regulator may pursue charges against six former officers and 11 former directors, for what it called "breaches of duty" that led to an estimated $23 billion loss for the deposit insurance fund.

Digital health startups defy the skeptics

VC funding for the digital health industry hit $2.2 billion in Q3, the highest level since early 2022, according to our latest Emerging Tech Research.

The surge is thanks to seven deals of $100 million or more—the largest of which was Flo Health's $200 million Series C, at a $1.2 billion valuation for the consumer-facing women's health platform.

Publicly traded digital health companies have faced skepticism from investors, but IPOs could still make a resurgence. Diabetes startup Omada Health confidentially filed for an IPO earlier this year.

A key area of innovation is smart rings: Oura hit a $5 billion valuation this year amid swift growth.

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What will shape the PE industry in 2025?

Wondering what lies ahead for PE? Trends poised to redefine the market include a rise in PE-backed IPOs driven by more GPs tapping strong public markets to realize investments.

However, it's not all smooth sailing. Our 2025 US Private Equity Outlook also warns of rising pressure on fund life cycles, with analysts anticipating that more funds will hit the maturity wall as vintages from historically active fundraising periods begin to wind down.

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Private funds pine for a pop

Optimism is growing for a boom in dealmaking and exits—potentially driving distributions for LPs and making future fundraising easier, according to our Global Private Market Fundraising Report.

Not that fundraising has been bad: While the latest numbers can be deceptive given a lag in reporting, PitchBook senior strategist Hilary Wiek believes the last 12 months have been a strong period for private market fundraising. Infrastructure vehicles experienced a surge in Q3, and secondaries are benefiting from a cyclical bump as large asset managers close their latest vintages.

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Sovereign wealth funds engulf AUM

(Mara Potter/PitchBook News)

Earlier this year, an Abu Dhabi-based sovereign wealth fund set the art world abuzz when it saved auction house Sotheby's from a heavy burden.

ADQ acquired newly issued shares of Sotheby's for a total of $1 billion in an effort to reduce the company's leverage and bring the fine art establishment's operations to the Middle East. The deal marks one of many PE-sponsored direct pacts with sovereign backers that closed this year, a trend that is expected to ramp up through the end of the decade.

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Funds

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0.17x

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VC Deals

Zhipu, a Chinese generative AI startup, raised 3 billion yuan (around $412 million), Bloomberg reported.

Vacation rental software startup Hostaway raised a $365 million round led by General Atlantic at a $925 million valuation.

Tyme, a Singapore-based digital bank, received a $250 million Series D led by Nubank at a $1.5 billion valuation.

Boston-based Familiar Machines & Magic, a newly founded home robotics startup, is raising $30 million, according to SEC filings.

Slip Robotics, which develops autonomous truck-loading robots, raised a $28 million Series B led by DCVC.

Agave Games, an Istanbul-based mobile gaming startup, raised $18 million in a round led by Felix Capital and Balderton Capital.

PE Deals

An affiliate of ArcLight Capital Partners is acquiring a 25% stake worth $865 million in the Gulf Coast Express Pipeline from Phillips 66.

Media analytics platform developer Unicepta has been acquired by marketing-focused PE firm Stagwell.

RedBird Capital Partners and Jeff Zucker invested in Prologue Entertainment, a new independent film production studio.

AI consulting specialist Sia Partners received up to €250 million in an investment from Blackstone.

Construction software developer hsbcad was acquired by Germany-based PE firm Maguar Capital.

Pennsylvania-based Planning Capital Management has been acquired by wealth management firm Waverly Advisors.

Exits

Coda, a productivity tools specialist last valued at $1.4 billion, has been acquired by Grammarly. Coda CEO Shishir Mehrotra will lead Grammarly moving forward.

Rivery, an Israel-based data integration startup, was acquired by Boomi, which offers an integration and automation platform.

Ventive Hospitality, an India-based hotel operator backed by Blackstone, priced its IPO at 16 billion rupees (about $188.4 million).

Carraro International unit Carraro India has priced its India IPO at $147 million.

Almoosa Health, a Saudi Arabia-based hospital operator, received $46 billion in orders for its $450 million IPO.

Fundraising

BlackRock held a $1.1 billion first close for its fifth infra solutions fund, Infrastructure Investor reported.

VC firm Category Ventures debuted with a $160 million fund focused on early stage investments in AI, infrastructure, development tools and applications.

Investors

Blue Owl Capital co-founder Michael Rees is considering merging several firms in the company's portfolio to create a larger PE investment entity, the Financial Times reported.

Chart of the Day

Source: RFK Jr. nomination dents PE confidence in CRO market

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PitchBook News - Databricks topples OpenAI in VC record

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