PitchBook News - VC valuations' golden handcuffs

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The Daily Pitch: VC

February 11, 2025

Presented by CIBC Innovation Banking

📈 While the price of bitcoin smashed through $100,000 in the fourth quarter—an all-time high—it appears VCs didn't get the memo. We've yet to see the usual flurry of checks that historically accompanied a booming bitcoin price. Go deeper.

👗 The sheen is coming off Shein's London IPO after the fast-fashion retailer abandoned warehouse plans amid mounting pressures that include tariffs and protests. The company has reportedly lowered its IPO valuation target to $50 billion, a $16 billion haircut from its last round. Full story.

🧐 An Elon Musk-led group of investors made a bid to acquire the nonprofit owner of OpenAI for $97.4 billion, The Wall Street Journal reported. The AI giant is reportedly finalizing an investment from SoftBank at a $300 billion post-money valuation.

Plus...
• LBO debt is getting cheaper to raise
• A new fund for AI media startups

VC valuations' golden handcuffs

VCs and startups are still reluctant to swallow a valuation discount in a liquidity event, according to our 2024 Annual US VC Valuations Report. The golden handcuffs of the VCs behind over-valued companies are holding back IPOs, even after the Fed made three consecutive interest rate cuts.

You'd think that we'd be seeing downward pressure on valuations, but AI startups are keeping VCs satiated: In 2024, nearly 50% of all deals valued over $500 million were for AI companies. But can the pace continue through 2025?

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Ex-Hollywood executive, startup banker team up for new seed fund

(Mario Tama/Getty Images)

The former head of SVB's startup banking division and a known Hollywood figure are raising a new VC seed fund. They're going after $10 million.

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Europe's PE dealmaking outlook brightens

European PE dealmaking is looking promising for 2025 following a recovery year. The AI sector is taking center stage, as overall dealmaking continues to thrive with increased US investor participation, and the exit backlog is showing signs of easing, according to our 2024 Annual European PE Breakdown.

Fundraising was strong in 2024, but the bulk of the capital was raised by experienced managers with proven track records. The Nordics region notched a record year of fundraising, while France and Benelux had its worst in a decade.

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Funds

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2018 Vintage Global PE Funds

Median IRR

16.17%

Top Quartile IRR

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People

Chicago-based investment bank William Blair has named John Ivey and B.T. Remmert as co-heads of technology investment banking, to succeed Pete Dalrymple in Q2.

VC Deals

A group of investors led by Elon Musk that includes Valor Equity Partners, Baron Capital and 8VC is offering to buy the nonprofit that controls OpenAI in a $97.4 billion deal, The Wall Street Journal reported.

Anduril, a defense-tech startup building autonomous weapons systems, is raising a $2.5 billion round at a valuation of over $28 billion led by Founders Fund, according to reports.

Epicore Biosystems raised a $26 million Series B led by the Steele Foundation for Hope for its wearable health devices that use sweat-monitoring technology.

Travel agency startup Exoticca, based in Barcelona, raised a €25 million venture debt facility from BBVA Spark, which brings the company's Series D funding total to €85 million.

Utah-based Boostly, the developer of an SMS marketing platform for restaurants, raised a $22 million Series A led by PeakSpan Capital.

Upcover, an Australian small-business insurance company, raised a Series A with $11 million in equity led by RealVC and an $8 million debt facility from Marshall Investments.

BRKZ, a Saudi Arabia-based construction tech startup, extended its Series A to $17 million with a new $8 million in equity and $1 million in debt from investors including Wa'ed Ventures, BECO Capital and Better Tomorrow Ventures.

Germany's Planted, an ESG software startup, raised €5 million in a seed round from investors including TechVision Fonds, Wenvest Capital and AWS Gründungsfonds.

Madrid-based Nido secured €5 million in seed funding from investors including Iberdrola, Ship2B Ventures and Zubi Labs to expand its AI-powered heat pump installation platform.

Upcoming webinar: Q4 2024 PitchBook-NVCA Venture Monitor

Although the US VC market's liquidity crunch continues, a slight increase in total commitments and the prospect of further rate cuts could mark friendlier conditions for investors in the year ahead.

Join PitchBook analysts in a live discussion of the Q4 2024 PitchBook-NVCA Venture Monitor—created in partnership with the National Venture Capital Association and sponsored by J.P. Morgan, Dentons, and Deloitte—and get a head start on 2025 with exclusive insights and outlooks.

Register now to secure your spot.

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PE Deals

Global Infrastructure Partners and HRL Morrison & Co. are among the bidders for Princeton Digital Group, a Warburg Pincus-backed data center operator in Asia. A deal could value Princeton Digital at $4 billion, Bloomberg reported.

BC Partners, Permira and TPG have submitted bids for Italy's SICIT Group, in a deal that could value the bio-stimulants and industrial chemicals company at around €1 billion, newspaper Sole 24 Ore reported.

Bolder Industries, the developer of an infrastructure platform for the rubber, plastic and petrochemical industries, was acquired by Tiger Infrastructure Partners.

Exits

Mizuho is nearing a deal to acquire KKR-backed Avendus Capital, an Indian financial services firm, to strengthen its presence in India's investment banking sector, Bloomberg reported.

IVC Evidensia, Europe's largest vet group, is considering a UK IPO, which could be one of London's largest listings in years, the Financial Times reported. The company, backed by EQT, Silver Lake and Nestle, was last valued at €12.3 billion in 2021.

Tabby, a buy-now, pay-later fintech startup based in Saudi Arabia, is preparing for an IPO, Bloomberg reported.

Chemicals producer Nouryon, which is backed by The Carlyle Group, filed confidentially for an IPO, Bloomberg reported.

Media company Red Seat Ventures, which produces podcasts, videos, live events and more, has been acquired by Fox Corporation.

Fundraising

London-based BC Partners is launching its latest flagship fund with a target between €5 billion and €6 billion, Bloomberg reported.

Manager of the Philippines' sovereign wealth fund, Maharlika Investment Corporation, is partnering with Thailand-based Charoen Pokphand Group to launch a PE fund targeting $1 billion in capital commitments.

Candriam and Kartesia launched a private credit ELTIF to provide diversified investment opportunities.

Thomson Reuters launched its second corporate VC fund, which is targeted at $150 million.

Investors

Activist investor Elliott Investment Management has acquired a stake in BP, which has a market value of about £69 billion.

Chart of the Day

Source: Trump’s latest move to save TikTok: Start a sovereign wealth fund

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PitchBook News - VC valuations' golden handcuffs

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