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In today's Daily Pitch, you'll find: - Our inaugural Emerging Tech Research report on gaming explores VC's quest in the space.
- The healthcare staffing shortage has restricted PE dealmaking in the sector.
- Two fund managers have lined up a combined $10 billion for their flagship private debt vehicles, showing the appetite for private market loans.
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| Gaming continued leveling up in 2022 | | Video games are everywhere—from musicians performing concerts inside "Fortnite" arenas, to esports championships broadcast on ESPN. In 2020 alone, game sales were nearly triple the revenue generated by all major US sports, digital music sales and cinema box office sales combined.
As a result, digital entertainment has seen massive growth over the past four years, gaining the attention of investors. Despite some drops in deal activity, 2022 proved to be a robust year for venture investment in gaming, according to our inaugural Emerging Tech Research report on the space. Key takeaways include: - While 2022 saw the industry's first contraction in global VC funding in five years—down to $13.3 billion from $16.6 billion in 2021—totals remain historically high.
- Exit value totaled $2.5 billion in 2022, down from $30.5 billion in 2020—amid a difficult regulatory climate following Microsoft's proposed acquisition of Activision Blizzard.
- The market is expected to reach $562.3 billion by 2026.
| | | | | | | | | Worker shortage plagues PE healthcare deals | |  | | (Chompoo Suriyo/Shutterstock) | | | In the US and Canada, aging populations and a greater need for mental illness treatment—among many other challenges—are boosting demand for in-home healthcare and behavioral health services. And PE firms have taken note.
But the healthcare staffing shortage is hitting those agencies and practices especially hard, squeezing businesses that previously delivered margins as high as 15% and demanding greater operational expertise from would-be buyers.
As one senior analyst said: "It's not just a simple roll-up anymore." | | | | | | | | | SPACs face liquidation as deal deadlines loom | |  | | (Supamotionstock.com/Shutterstock) | | | SPAC listings peaked in 2021, and many are now facing deadlines to complete a merger this year in a market that has turned against them.
Volatility in the public markets and increased competition have made acquisitions more challenging and, for some, liquidation may be the only option. | | | | | | | | | Momentum for private debt funds is building | |  | | (William Potter/Shutterstock) | | | Two fund managers—Crescent Capital Group and Willow Tree Credit Partners—have lined up a combined $10 billion in commitments to their flagship private debt vehicles, underscoring investors' growing appetite for private market loans.
Private debt is taking on greater importance as banks around the globe are tightening lending conditions and more companies are seeking liquidity amid increased economic uncertainties. Despite challenging market conditions, capital raised by private debt funds topped $200 billion in 2022 for the third consecutive year. | | | | | | | | | Software, healthcare sectors lead rise in leveraged loan 'weakest links' | |  | | (Sashkin/Shutterstock) | | | Negative ratings actions have driven up the share of leveraged loan "weakest links," with the software and healthcare sectors leading the count. LCD's Weakest Links represent loans with a corporate credit rating of B-minus or lower and a negative outlook from S&P Global Ratings.
The number of such loans climbed nearly 50% in the second half of 2022—amid a streak of negatively skewed ratings actions on loan facilities in the Morningstar US Leveraged Loan Index. By the end of the year, downgrades were outpacing upgrades by a ratio of 2.77x, the highest rate since September 2020. | | | | | | | | | | How CEOs and businesses in Ukraine have survived a devastating year of war with Russia. [Fortune]
Goldman Sachs is allowing its richest clients to invest in Stripe's $4 billion fundraise as the payments giant looks to pay off an upcoming tax bill. [Bloomberg]
A visual analysis of consumer price inflation, broken down by type of good or service. [Visual Capitalist] | | | | | |
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| | Since yesterday, the PitchBook Platform added: | | 445 Deals | 2494 People | 655 Companies | 39 Funds | | | | | | |
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| 2012 Vintage Global PE Funds between $500M-$1B | | | | | | |
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ProsperOps, which helps businesses manage their cloud costs, has raised a $72 million round led by HIG Growth Partners.
Chain Reaction, a blockchain-focused chip designer based in Tel Aviv, has raised a $70 million Series C led by Morgan Creek Digital.
Logistics software startup Slync has raised $24 million in fresh funding led by Goldman Sachs. Last week, the SEC charged Slync's co-founder with fraud.
Web3 gaming company Kratos Studios has secured $20 million in a seed round led by Accel, The Block reported.
CyberSmart, which offers cybersecurity tech and insurance, has raised roughly $15 million in a Series B led by Oxx.
Digital estate planning company Trust & Will has raised a $15 million round from investors including Northwestern Mutual Future Ventures and SEI Ventures, TechCrunch reported.
Canadian agtech startup Future Fields has raised $11.2 million from investors including Bee Partners and Toyota Ventures.
German fintech startup Finway has raised €9.2 million from backers including Capital 49, Force Over Mass and Btov Partners.
DirectID, the provider of a credit risk platform, has raised €9 million from Ingka Investments.
DeFi startup Affine has secured a $5.1 million seed round co-led by Hack VC and Jump Crypto, The Block reported.
Speedinvest has led a €2 million seed investment for Berlin-based Konfetti. The startup's platform allows users to find and book local courses, events and workshops. | | | | | |
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| Private equity icon Thomas Lee dies | | | | | | |
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| Blackstone raises $10B for tactical funds | | | Blackstone has raised roughly $10 billion between its Blackstone Tactical Opportunities Fund IV and a collection of associated accounts, Reuters reported. The firm's tactical opportunities funds are designed to allow Blackstone flexibility to invest across industries, regions and asset classes. | | | | | | | Resource Capital eyes $250M for mining | | | Resource Capital Funds has been raising capital for RCF Opportunities Fund II, which has a target of $250 million, The Wall Street Journal reported. The fund will take minority stakes in mining companies, especially those producing battery metal ore. | | | | | | | Altai closes financial services fund | | | | | | |
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