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In today's Daily Pitch, you'll find: - Our latest report explores trends in global private debt, which is now the third-largest private market strategy in terms of assets under management.
- Scenic Advisement, which helps startup founders and early-stage venture investors sell their private stock on the secondary market, is joining the buy side of the deal flow.
- Cann has raised a $27 million Series A as cannabis-infused beverages gain popularity and social acceptance.
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| Private debt funds raise $191B in 2021 as LBO trend accelerates | | Private debt managers secured $191.2 billion last year, the second-highest annual tally on record despite the lowest number of funds closed since 2011. It's a remarkable figure amid a challenging macroeconomic environment, and private debt is now the third-largest private market strategy in terms of assets under management, trailing only PE and VC.
Our 2021 Annual Global Private Debt Report, sponsored by the American Investment Council and Tree Line Capital Partners, tracks last year's major storylines in private debt and details why the evidence points to continued support for the strategy. Among the takeaways: - While private debt fundraising and AUM are both predicted to continue growing, the rate of increase is expected to be dampened by rising interest rates in the medium term.
- The accelerating trend of leveraged buyouts relying on private financing as opposed to bank loans or high-yield bonds has helped fuel the strategy's rise as fund sizes have grown to meet the demand.
- Direct lending funds' available dry powder has decreased annually since 2018, indicating lenders are finding it relatively easy to deploy capital.
| | | | | | | | | | Exclusive: Secondary firm Scenic raising $250M first fund | |  | | (Loop Images/Getty Images) | | | Scenic Advisement, which helps startup founders and early-stage venture investors seeking to sell their private stock on the secondary market, is expanding its presence by joining the buy side of the deal flow. - San Francisco-based Scenic is raising its first fund, with a target of $250 million, to take ownership stakes in the burgeoning class of venture-backed pre-IPO tech companies, according to people familiar with the firm's plans.
- The launch is one of the latest twists among trading platforms seeking to capitalize on the maturing market for late-stage secondhand shares.
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| A message from West Monroe | | |
| Across PE investments, underwriting digital investments is the new imperative | | Technology and operations are merging. So, too, are diligence and post-close value creation. These converging pressures mean that genuine insights—often based on outside-in analysis and third-party data—are more important than ever. So are operational improvements. Our experience in over 600 deals in 2021 suggests that becoming a digital organization will be the linchpin for realizing improvements in operational KPIs, financial performance and ultimately exit multiples.
Furthermore, in our recent poll of 300 business leaders, 88% of private equity executives said digital is a significant part of their 2022 growth strategy.
Our 2022 report outlines three key trends private equity firms will continue to face this year, and how to capitalize on them.
Download the report | | | | | | | |
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| Cann drinks up $27M as cannabis-infused beverages gain popularity | |  | | (Jena Ardell/Getty Images) | | | Cann, a provider of cannabis-infused beverages, has raised a $27 million Series A from investors such as existing backer Imaginary Ventures. An array of celebrity investors including Nina Dobrev, Adam Devine, Zoey Deutch, Jordan Cooper, Sara Foster and Rosario Dawson also participated in the funding.
Based in Los Angeles and founded in 2019, the startup recently expanded its operations into Illinois, Massachusetts and Arizona. Along with the new round, Cann has also announced its first international expansion with the launch of its brand in Canada.
Other notable VC-backed startups in the space include K-Zen, a California-based developer of cannabis consumables, and Mirth Provisions, a Washington-based producer of specialty cannabis-infused edibles and drinkables.
As cannabis becomes legalized in more US states and across the world, such beverages are gaining social acceptance among consumers seeking an alternative to alcohol. The global cannabis beverage market is expected to reach $2 billion by 2026 and increase at a compound annual growth rate of nearly 17%, according to market research company Global Industry Analysts. | | | | | | | | | | VC funding for HR tech soars amid focus on diversity, remote work | |  | | (Feodora Chiosea/Getty Images) | | | HR tech had an exceptionally robust 2021 as companies in the sector stepped up to help employers hire diverse workforces and navigate hybrid or remote work arrangements.
Last year, venture investors funneled more than $12.3 billion into global HR tech startups, according to PitchBook data. So far, that momentum has carried over into 2022. | | | | | | | | | | Despite net-zero promises, green slogans and acknowledgments that carbon emissions must be curbed, banks and institutional investors are still pumping money into coal. [Fortune]
Companies are swapping plastic ID badges for apps, scanners and sensors as workers trickle back into the office. [The New York Times]
Warby Parker co-founder Neil Blumenthal on how CEOs can rely on health experts to devise a flexible future. [The Washington Post] | | | | | |
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| | Since yesterday, the PitchBook Platform added: | | 549 Deals | 1905 People | 566 Companies | 25 Funds | | | | | | |
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| 2015 Vintage Global Real Estate Funds | | | | | | |
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| Arielle Zuckerberg joins Long Journey Ventures as GP | | | | | | |
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| Edtech provider Paper secures $270M Series D | | | Paper has raised $270 million in a round co-led by Sapphire Ventures and SoftBank. Based in Montreal, the edtech company partners with school districts to provide on-demand tutoring resources. | | | | | | | | Kallyope brings in $236M for gut-brain biology-based therapeutics | | | Kallyope has raised a $236 million Series D co-led by Mubadala and The Column Group. The New York-based company is developing therapeutics that use gut-brain biology to target diabetes, obesity and diseases of the gastrointestinal barrier. Kallyope was valued at $462 million after a $112 million round in 2020, according to PitchBook data. | | | | | | | | Veho lands $170M in Series B led by Tiger Global | | | Veho has raised $170 million at a valuation of more than $1.5 billion in a round led by Tiger Global, with support from SoftBank's Vision Fund 2. Founded in 2016, Veho offers a package delivery platform for ecommerce brands. The new round comes about six weeks after the startup hit a unicorn valuation with its Series A. | | | | | | | | | Ro has raised $150 million in a round led by ShawSpring Partners. Founded in 2017 and based in New York, the company provides telehealth, diagnostics and pharmacy services to users without insurance. It was valued at $5 billion in March, according to PitchBook data. | | | | | | | | | SourceDay has raised a $31.5 million Series C led by Norwest Venture Partners. The Austin-based company is the developer of a purchase order management platform for manufacturers, distributors and consumer brands. | | | | | |
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| Blackstone announces $24B Mileway recap | | | Blackstone has announced a €21 billion (about $24 billion) recapitalization of Mileway, a Dutch owner of 1,700 last-mile logistics real estate assets in 10 major European countries. As part of the deal, existing Mileway investors have been offered the opportunity to retain or increase their shareholding or exit for cash. Blackstone launched the company in 2019. | | | | | | | | Apollo to acquire Novolex from Carlyle in $6B deal | | | Apollo Global Management has agreed to buy a majority stake in Novolex from The Carlyle Group, with Bloomberg reporting the transaction values the company at $6 billion. Carlyle, which acquired Novolex from Wind Point Partners and TPG in 2016, will retain a minority stake in the South Carolina-based provider of sustainable packaging products for the foodservice, retail, health and industrial sectors. | | | | | | | | MDP to buy MoneyGram for $1.8B | | | Madison Dearborn Partners has agreed to acquire MoneyGram for $1.8 billion in cash. MDP will pay $11 a share for the digital payments provider. That represents a premium of around 50% to the company's closing stock price Dec. 14, the last trading day before news of a potential deal was first reported. | | | | | | | | Vista Equity leads $1B+ investment in Securonix | | | | | | | | | Gryphon Investors purchases HVAC parts distributor | | | Mid-market PE firm Gryphon Investors has acquired Benoist Brothers Supply Co., a distributor of HVAC and refrigeration equipment, parts and supplies in the US Midwest. Gryphon will operate the company as an independent division of its Wittichen Supply Holding Company, with Benoist's current management team set to remain in place. | | | | | |
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| Apax eyes $13B for latest buyout vehicle | | | London-based Apax Partners is targeting $13 billion for its 11th namesake fund, The Wall Street Journal reported. The majority of the capital will go toward investments in Europe and North America, with some 10% to 15% earmarked for China, India and other regions, the report said. In January 2021, Apax closed its 10th flagship effort on $11 billion for investments in the tech, services, healthcare and consumer sectors. | | | | | | | | Hildred wraps debut institutional fund on $362.5M | | | Hildred Capital Management has closed its first institutional fund with $362.5 million in capital commitments, surpassing its target. The New York-based firm will use the funds to make majority and minority investments in healthcare-related areas such as consumer products, medical provider services, information technology and diagnostics. | | | | | |
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"2021 was a record year for European PE-backed IPOs, with 118 completed worth an aggregated €105.0 billion—almost double the previous IPO exit value high of €54.2 billion set in 2010. Public equity investors' willingness to pay outsized premiums for PE-backed assets in favorable sectors such as technology was the main reason sponsors rushed to the public markets—reversing a multiyear trend of staying private for longer."
Source: PitchBook's 2021 Annual European PE Breakdown | | | | | |
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