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In today's Daily Pitch, you'll find: - VC fintech investors have shifted favor from retail fintech startups to those offering B2B services, as shown by our latest Emerging Tech Research.
- Five VCs share which European startups they think are game changers in solving the world's climate crisis.
- PitchBook analysts break down the causes and ramifications of LPs' pullback from private fund strategies.
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| Enterprise fintech takes a bigger bite of the VC pie | | The fintech industry remains one of the most well-funded spaces in the VC landscape. With the digitization of financial products and services brought about by the COVID-19 pandemic, the fintech ecosystem continues to present plenty of opportunities for growth.
Enterprise fintech startups are capturing more of the broader fintech VC pool, and our latest Emerging Tech Research explores why investors are paying attention to this segment. Key takeaways include: - Global VC investment in the broader fintech space reached $57.6 billion across 2,747 deals in 2022, declines of 40.7% and 18.1% year-over-year, respectively.
- Within the vertical, enterprise fintech startups raised 60.9% of capital from investors compared to their retail counterparts. In 2020, that number was 48.2% of capital.
- Exit activity sharply declined due to difficult economic headwinds, dropping 74.3% from last year to $18.1 billion.
| | | | | | | | | Fundraising declines as LPs assess damage from denominator effect | | In 2022, LPs cut back their commitments across all private fund strategies amid questionably high valuation marks and macroeconomic headwinds. But the denominator effect, caused by public market values falling faster than those of alternative assets, was arguably the primary reason for the LP pullback.
Another factor in declining commitments was the fear that slowing distributions could lead to an inability to meet capital calls. But our data shows that scenario didn't play out in 2022.
Other takeaways from our Global Private Market Fundraising Report include: - While VC saw the smallest decline in fundraising compared to other private market strategies, we expect LP support of VC to drop further in 2023 amid a decline in distributions from IPOs or other exit options.
- Real estate and fund-of-funds fundraising hit their lowest points in 10 years.
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| A message from McDermott Will & Emery | | |
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| Startup radar: Europe's climate-tech startups to watch | |  | | (lookslikephoto.com/Shutterstock) | | | Venture dealmaking in European climate tech is expected to remain active this year, even as other sectors suffer.
We asked five VCs that invest in European climate tech which startups they think are game changers in solving the world's climate crisis. | | | | | | | | | SoftBank-owned Arm picks US listing in a blow to UK tech ambitions | |  | | (KAZUHIRO NOGI/Getty Images) | | | SoftBank-owned Arm has confirmed that it will pursue a US-only IPO this year despite efforts by the British government to persuade the UK chip designer to list in London.
The decision comes amid the UK's ongoing reform to its listing regime in a bid to become the go-to exchange for European tech IPOs and encourage home-grown success stories like Arm to list locally. | | | | | | | | | Private debt secondaries flooding the market overwhelm limited capital | |  | | (pogonici/Shutterstock) | | | Private debt secondaries experienced record transactions in 2022—totaling $17 billion—largely driven by LPs seeking to rebalance their investments.
But the market remains undercapitalized. Despite heavyweight buyers dedicating capital to private debt secondaries, the market has been pulling out all the stops to absorb big-ticket LP portfolio sales, and it's been difficult to find buyers for some larger GP-led transactions. | | | | | | | | | | | | | | |
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| 2020 Vintage Real Assets Funds | | | | | | |
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Stability AI, the maker of generative AI model Stable Diffusion, is seeking to raise new funding at a roughly $4 billion valuation, Bloomberg reported. The startup was valued at $1 billion in October.
Electrify Video Partners, which invests in and buys YouTube channels, has raised a $50 million round led by MEP Capital.
Agtech startup Hectare has secured a $20 million Series A from undisclosed investors.
Italian industrial 3D printing startup Caracol has raised a €10.6 million Series A from investors including CDP Venture Capital, Primo Space Fund and Eureka! Venture.
South Korea's Indent, which helps shoppers leave video reviews, has secured an $8.1 million Series A led by SV Investment, TechCrunch reported.
Seattle-based SafKan Health has raised an $8 million Series A led by Unorthodox Ventures for its earwax removal device, according to reports.
OnePlan, a provider of digital mapping tools for event planners, has secured $6 million from Elysian Park Ventures and Verance Capital. | | | | | |
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Sweden's EQT and the Public Sector Pension Investment Board have agreed to acquire Radius Global Infrastructure for $3 billion.
Aster DM Healthcare, a Dubai-based hospital operator, has been attracting potential acquirers, including PE firms, Reuters reported. The company hopes to sell a stake of at least 50%. Prospective buyers include Fajr Capital and Gulf Islamic Investments.
TRM Equity has acquired most of Gamma Aerospace's assets, including its headquarters in Mansfield, Texas, and two facilities that manufacture parts for the aerospace and defense industries.
Further Global Capital Management-backed Progeny Group plans to buy UK financial planning company Gibbs Denley. Following the deal, Progeny's AUM will rise to over £7.5 billion.
Cuadrilla Capital-backed Chartbeat has acquired two other SaaS companies: revenue management specialist Lineup Systems and Tubular Labs, a social video analytics platform.
Authentic Brands, backed by CVC Capital Partners and HPS Investment, is among those hoping to acquire British footwear brand Hunter Boot. | | | | | |
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| PSG targets $6.5B for software | | | PSG, which invests in software companies, aims to raise $6.5 billion for its sixth fund, a target that would far outpace the $4.5 billion committed to predecessor PSG V, The Wall Street Journal reported. | | | | | | | Indiana pension commits $450M to PE funds | | | | | | | | Gwyneth Paltrow to raise $75M | | | | | | | | Founders Fund slashes target | | | Founders Fund has cut the target size of its eighth flagship fund in half from $1.8 billion to $900 million, Axios reported. | | | | | |
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| Myne buys proptech startup VillaCircle | | | | | | |
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| | | Equinor has agreed to acquire Suncor Energy UK for $850 million. The move comes as Equinor attempts to bolster its oil and gas capabilities. | | | | | |
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