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In today's Daily Pitch, you'll find: - The cross-border M&A market holds steady and, despite unique risks, keeps its eyes on the long game.
- PitchBook analysts predict how private equity will navigate a tough market in our 2023 US Private Equity Outlook.
- Chart of the day: Median time since founding for US female-founded companies to reach unicorn status.
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| PE returns, fundraising could falter in 2023 | | There's little doubt that the private equity universe will have to grapple with drooping company valuations and expensive debt in 2023. But what are the implications?
PE funds' returns will likely underperform public markets. Take-private deals should continue, but firms will probably shift gears to much smaller targets. Exits could hit a 15-year low, relative to new investments. And buyers in need of leverage are likely to tap nonbank lenders almost exclusively in coming months.
That's what PitchBook analysts think the new year will bring, and those predictions and others—such as which types of healthcare deals are poised to bounce back—are laid out in our 2023 US Private Equity Outlook. | | | | | | | | | Cross-border activity by North American acquirers holds firm | | The market for cross-border M&A, in which GPs and corporations seek new markets via acquisitions in other countries, held steady in 2022. Cross-border activity by North American acquirers has fully recovered from 2020 lows and closed slightly higher in value despite a decline in the overall M&A market.
Buying overseas companies has always involved a higher degree of risk and return due to unexpected changes in currencies and foreign regulations as well as geopolitical tensions. North American companies that successfully navigate these risks have reaped large gains, and the stability in this year's activity suggests their appetite is still intact.
In our latest analyst note, PitchBook analyst Jinny Choi takes region-by-region snapshots of the market and explores where potential headwinds could lead. | | | | | | | |
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| Achieve greater financial resilience while scaling for growth | | When is a company ready to IPO? Coupa created a five-point IPO Readiness Checklist based on years of experience in helping businesses worldwide prepare for an IPO and the results of a 2022 IPO readiness survey conducted among finance decision-makers.
Even in delaying an IPO (due to volatile economic conditions), it's crucial to get the financial house in order, prepare for compliance, and begin behaving like a public company. This undertaking takes longer than most realize, so starting earlier rather than later is pertinent.
The IPO Readiness Checklist will also help to: - Establish scalable financial processes
- Mitigate risks that impact business continuity
- Create a trusted IPO team
- Implement clear financial controls that hinder fraud
- Ensure financial processes are compliant with audits, and regulations
Get your free copy of the Checklist today | | | | | | | |
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| Female founders take the good with the bad in a challenging 2022 | |  | | (Drew Sanders/PitchBook News) | | | Companies with at least one female founder have raised about $38 billion in venture funding so far in 2022, while startups with only female founders have garnered about $4.3 billion, according to PitchBook data. These both represent sharp declines from 2021, although they are still the second-highest annual totals on record.
While funding for female-founded companies has declined year-over-year, the share of capital for female co-founded startups has ticked up to 15.4% of total US VC funding, the highest it's been since 2017.
As the VC market faced headwinds amid uncertain economic conditions, see how female founders fared in 2022. | | | | | | | | | Chip war spurs sell-off, but pockets of potential remain | |  | | (PastryShop/Shutterstock) | | | This fall, the US placed strict export restrictions on advanced semiconductors to China, the latest salvo in a yearslong conflict over critical technology.
Investors have punished global chipmakers caught between the saber-rattling sides, but they may have gone too far, according to Morningstar analysts. There may be buying opportunities for institutional investors that can weather the political storms in return for long-term growth. | | | | | | | | | Real assets funds get bigger, give better returns | | Fundraising for private real assets investing slowed in Q3, but the vehicles collecting LP commitments are ballooning in size. Meanwhile, returns are sitting at 15-year highs, the most recent data shows.
Infrastructure funds' rolling one-year IRR reached a post-global financial crisis peak of 16.7% through Q1. That's good news for the overall strategy, as infrastructure investments have made up the vast majority of real assets in 2022.
As the often long-term, low-risk strategy attracts more attention for its recent achievements, our Q3 2022 Global Real Assets Report breaks down who is investing in what, and why. - Increasingly large infrastructure funds are likely to continue the big take-private dealmaking of 2021 and 2022.
- LPs' commitments to riskier types of infrastructure funds are far higher than five- and 10-year averages.
- Oil and gas fundraising has dwindled through Q3 as more investors embrace energy infrastructure with lower emissions.
| | | | | | | | | | Hundreds of companies that went public in the IPO boom have suffered such sharp reversals that their shares may never recover. [The Wall Street Journal]
Binance's corporate filings show that much about the crypto exchange remains mostly hidden from public view. [Reuters]
Years into the pandemic, it's still difficult to get a handle on what comes next for the economy by looking at examples from the past. [The New York Times] | | | | | |
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| | Since yesterday, the PitchBook Platform added: | | 470 Deals | 2022 People | 607 Companies | 41 Funds | | | | | | |
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| 2020 Vintage Global Funds-of-Funds | | | | | | |
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| CyberCube gets $50M growth round | | | | | | | | Helm.ai drives off with $31M Series C | | | Autonomous driving and robotics company Helm.ai has secured a $31 million Series C led by Freeman Group. The round valued Helm at $431 million, TechCrunch reported. | | | | | | | ImagenAI lands $30M for creative AI | | | ImagenAI, which is creating AI-powered photo editing tools, has raised a $30 million investment led by Summit Partners. | | | | | | | Protillion Biosciences raises $18M | | | | | | | | Mangomint grabs $13M for salon software | | | | | | | | Revel raises $7.8M for NFT platform | | | NFT collecting and trading platform Revel has secured $7.8 million in a round led by Dragonfly. | | | | | | | | | | | | |
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| CPPIB, others ink $200M Redaptive investment | | | | | | | | Wynnchurch lands industrial services company | | | | | | | | Shoreline Equity backs chemicals specialist | | | | | | | | Madison Dearborn to acquire Wilmington Trust business | | | | | | |
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| Binance to buy Voyager assets for $1B | | | Crypto trading platform Binance.US has agreed to pay around $1 billion to acquire the assets of Voyager Digital, which filed for bankruptcy protection earlier this year following the collapse of Three Arrows Capital. FTX US, another crypto exchange, had planned to take Voyager private for more than $1.4 billion before it too filed for bankruptcy protection. | | | | | | | Epic Games fined $520M by FTC | | | "Fortnite" developer Epic Games has been ordered by the Federal Trade Commission to pay $520 million in penalties for violating children's privacy and misleading users into making unintended purchases. | | | | | |
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| Linse Capital raises $700M | | | Growth equity firm Linse Capital has raised $700 million, which will go toward its flagship fund as well as co-investment vehicles for Skydio and Verkada, two of the firm's portfolio companies. Linse Capital was started by former Kleiner Perkins partner Michael Linse and is based in Puerto Rico. | | | | | | | Axelar launches $60M Web3 funding program | | | Crypto company Axelar has raised $60 million from investors to start an ecosystem fund for decentralized app makers that use Axelar's interchain infrastructure platform. | | | | | |
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| Berkshire sells minority stake | | | | | | |
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"Among the highest-valued female-founded unicorns, the top three were founded by individuals who have founded two additional companies, highlighting how the experience of seasoned entrepreneurs can be an important asset for their companies."
Source: 2022 All In: Female Founders in the US VC Ecosystem | | | | | |
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