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In today's Daily Pitch, you'll find: - Synthetic data has gained popularity as a useful tool for the advancement of AI and machine learning.
- Co-investments are on the rise as fund managers seek new sources of capital and LPs look to reduce fee burden.
- A slight majority of PE firms believe they have the right executives in place at their portfolio companies, but returns hinge on leadership.
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| GPs tap co-investments as debt capital dries up and fundraising lags | |  | | (Gajus/Shutterstock) | | | Fundraising for PE-led co-investments, which allow LPs to invest alongside a fund manager, has soared over the last decade as managers turn to these transactions to expand their access to capital and LPs are attracted by low- and no-fee structures.
Co-investments not only allow GPs to fill the equity gap in buyout deals when cheap debt financing is harder to come by but also give them more time to raise their next fund. Dealmakers anticipate this strategy will continue to gain momentum as fundraising remains challenging. | | | | | | | | | Synthetic data moves to the fore with computer-augmented datasets | | Generative AI is seemingly all the rage these days, but there's another field of computer-generated data that's hitting a new stride. Synthetic data, which is made up of computer-generated outputs supplementing real-world observations, is gaining more attention as AI and machine learning rapidly advance.
Pitchbook's latest emerging space brief has the background and breakdown you need to understand the growing space. According to our estimations, synthetic data is on track to hit $1 billion in market size within the next four years. | | | | | | | |
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| Nearly half of PE firms, portfolio companies doubt current management | |  | | (iJeab/Shutterstock) | | | Private equity firms rely on management teams to drive new strategies at their portfolio companies. But only a little more than half of firms—and an almost equal number of portco executives themselves—said in a recent survey that they were confident in current leadership.
That's an issue when almost three-quarters of PE firms say effective leadership is their top strategy for generating returns on their LPs' investments. | | | | | | | | | Regenerative agriculture is the new 'organic' | | Extreme weather and the Russian invasion of Ukraine captured the world's attention in 2022, and agtech investors were no exception. Although total VC deals dipped to $10.6 billion—compared with $12.3 billion in 2021—investors anticipate a coming bloom of entrepreneurship and investor capital to tackle global food insecurity and climate change.
Our 2022 Agtech Overview dives into the innovative tech solutions and investment opportunities that could change the game, from custom plant biotech to aquaculture and weeding robots. Key takeaways include: - Late-stage and venture-growth investments generated the most traction in 2022 agtech numbers, capturing 74.2% of total VC funding and bucking industry-wide trends.
- Still, exit activity in agtech was expectedly sluggish, plummeting from $31.6 billion in 2021 to just $2.2 billion in 2022.
- Ag biotech and indoor farming led the field, with vertical farm Plenty notching the biggest deal close of the year, a $400 million Series E.
| | | | | | | | | Market Map: Healthcare services not immune to broader economic trends | |  | | (Avocado_studio/Shutterstock) | | | The healthcare services sector saw robust PE deal activity in 2022, but it wasn't immune to the broader economic uncertainty and increased capital costs.
Quarterly deal activity in 2022, while in line with pre-pandemic trends, has declined for four consecutive quarters, according to PitchBook data. The number of deals completed in Q4 2022 was less than a third of 2021's average quarterly deal count.
Amid this decline, our Healthcare Services PE Market Map shows where deals are being completed. | | | | | | | | | Takeaways from a key gaming industry event | | | Startups and top industry players gather each year at the Game Developers Conference, showcasing the latest advances to help shape the next generation of games. PitchBook was on the ground in San Francisco this year and has the breakdown—from "Fortnite" creator Epic Games' splashy presence to a more subdued showing for blockchain and Web3. | | | | | | | | | | Personal coaches to PE executives report that their clients are increasingly worried about their impact on their employees, business and even the world. [Institutional Investor]
Telemedicine startups are wary of a regulatory shift in the war on opioid addiction. [The Wall Street Journal]
On today's battlefields, better camouflage is needed to hide from new electronic sensors. [The Economist] | | | | | |
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| | Since yesterday, the PitchBook Platform added: | | 482 Deals | 2038 People | 622 Companies | 29 Funds | | | | | | |
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The Daily Benchmark:
2016 Vintage North American Funds-of-Funds | | | | | | |
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Blockchain security specialist Ledger has raised a $108 million Series C extension from investors including True Global Ventures and VaynerFund, according to reports.
Green Labs, a South Korea-based agtech startup, has secured $38.4 million in debt financing from BRV Capital Management and Skylake Incuvest, TechCrunch reported.
Parloa, which offers an AI-based platform to automate customer communication, has raised €20 million in a round led by EQT Ventures.
Effy, a French home energy specialist, has secured €20 million from Felix Capital.
Inato, which offers a platform to connect pharmaceutical companies with clinical trial sites, has raised a $20 million Series A2 led by Cathay Innovation.
Anvil, a paperwork automation specialist, has raised a $5 million Series A extension, bringing the round's total to $10 million, with participation from Craft Ventures and Gradient Ventures.
Finverity, a supply chain finance specialist, has raised $5 million from investors including Outward VC, Acrobator Ventures and S16VC. | | | | | |
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Vista Equity Partners has completed its $2.6 billion take-private of Duck Creek Technologies, an insurance solutions provider formerly listed on the Nasdaq.
Roark Capital Group is among the PE firms vying to buy sandwich chain Subway in a deal expected to reach $10 billion, Bloomberg reported.
Edotco Group, the wireless tower arm of Malaysian telecom group Axiata, has shortlisted bidders including CVC Capital Partners, I Squared Capital and Stonepeak Partners for a $750 million stake sale, Bloomberg reported.
Crossplane Capital has made an equity investment in Kaemark, a provider of millwork and equipment for spas, salons, medical clinics and veterinary clinics.
The Riverside Company has agreed to buy German cleanroom garment distributor Dastex. The firm has also acquired Swedish lab equipment specialist Vita Verita as its first add-on to the platform.
Endless has acquired poultry supplier Smithfield Murray, which it plans to merge with its existing portfolio company Yorkshire Premier Meat. | | | | | |
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Prysm Capital has closed its debut growth equity fund on $305 million.
Paris-based VC firm Elaia Partners has reached a €200 million close on its fourth fund. The vehicle will be used to invest in up to 30 European early-stage B2B startups with a ticket size between €1 million and €15 million.
Goodwell Investments and Oxfam Novib have launched a €20 million fund targeting early-stage startups in Kenya, Uganda and Ethiopia, TechCrunch reported. | | | | | |
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| India's markets regulator will allow PE firms to invest in the mutual fund industry, Reuters reported. The Securities and Exchange Board of India said qualifying firms must have at least five years fund management experience and at least 50 billion rupees (around $609.3 million) in capital. | | | | | |
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