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In today's Daily Pitch, you'll find: - Our European Venture Report examines how VCs and startups in the region are navigating a new normal.
- Our Private Equity Barometer indicates the industry's Q1 returns are likely to step up to the historical average of around 3%—a sign of stability.
- Sega's bid for Rovio, the maker of mobile game "Angry Birds," is a good sign for the VC exit market.
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| European VC navigates new normal | | Capital efficiency and profitability drove Europe's VC market as both deal count and value fell in the first quarter. Startups are finding it harder to grow and capital is becoming harder to come by, as inflation and monetary policy tighten their grip.
Our latest European Venture Report breaks down how VCs and startups are navigating the new normal—and the opportunities that have emerged with the downturn. Other takeaways include: - Early-stage rounds accounted for nearly 35% of overall deal value in Q1.
- M&A led the way for VC-backed exits, accounting for four out of the five largest deals.
| | | | | | | | | PE Barometer: Data indicates returns to recover from 2022 lows | |  | | (Drew Sanders/PitchBook News) | | | PitchBook's Private Equity Barometer indicates the industry's returns for Q1 are likely to step up to the historical average of around 3%—a sign of stability.
The barometer takes into account indicators such as PE returns, economic activity and credit conditions. It provides insights one quarter ahead of preliminary fund returns data. Factors that influenced the reading in Q1 include: - Consumer confidence remains low but is now trending positively.
- Lending standards have tightened significantly.
- Small-cap equities have rebounded after a bruising 2022, bringing the barometer up off recent lows.
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| Best practices to streamline your global talent search and acquisition | | The rise of remote work has revealed unexpected benefits for businesses and employees alike. Around the globe, rural areas are seeing a boost in quality of life as governments begin investing in technology infrastructure and offering financial perks for remote workers. In developing nations, remote work is providing access to fair market wages, increasing private wealth.
For employers, downsizing physical offices in favor of remote work has resulted in savings. Furthermore, organizations are tapping into international talent hubs using global market rates for cost-efficiency. In turn, employers gain efficient workers with varied skills and fresh ideas.
Check out G-P's blog How Remote Work Breaks Down Barriers to learn about remote work benefits and which principles you can apply to your workplace! | | | | | | | |
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| Sega's $776M offer for 'Angry Birds' maker Rovio gives hope for M&A | |  | | (OlegDoroshin/Shutterstock) | | | Sega, the Japanese game studio behind the "Sonic the Hedgehog" series offered €706 million (about $776 million) yesterday to buy Finnish game-maker Rovio, whose mobile game "Angry Birds" launched a bevy of spinoffs and movies.
The exit ramp for gaming startups fell off sharply in 2022, and the significant deal for Rovio is a hopeful signal in an otherwise moribund exit landscape. | | | | | | | | | Enterprises are rushing into AI, again. Will this time be different? | | Startups are giving the Big Tech giants a run for their money when it comes to the AI and machine learning field. OpenAI, Cohere and Stability AI have made significant gains with their language models and technology, driving much of the attention and resources from investors.
The result has been an explosion in new AI web applications in recent months. But skepticism of AI tools runs deep in many enterprises, and the rapid adoption of these tools is far from certain. Our recent Emerging Tech Research delves into opportunities and risks in PitchBook's annual industry overview of the red-hot sector. | | | | | | | | | Unfazed by volatility, Europe's private credit lenders uncork 'golden era' | |  | | (YRABOTA/Shutterstock) | | | | The burgeoning private credit segment in Europe snapped up almost every LBO financing that emerged in the first quarter—this was the case in the US as well—laying claim to a highly profitable domain once controlled by banks that arrange traditional syndicated credits. Private credit pros say this momentum will continue despite headwinds caused by bank failures in the US and Europe, a halting global economy, war, and rising rates. | | | | | | | | | Ynsect bags $175M, lays off staff as downturn hits agtech | |  | | (Sebastien Bozon/Getty Images) | | | Insect farming startup Ynsect has raised €160 million (roughly $175 million) and cut back its staff as higher costs eat into agtech startups' bottom lines.
In addition to widespread layoffs, the company has shut down its Dutch production facility as it pivots away from producing animal feed and toward consumer pet products. | | | | | | | | | | Why private equity firms still love enterprise software. [PE Hub]
First Republic doubled its assets in four years by wooing rich clients with bargain rates. Now, the stockpile of low-interest loans may be the bank's undoing. [Bloomberg]
The elusive dream of fully autonomous construction vehicles. [Wired] | | | | | |
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| | Since yesterday, the PitchBook Platform added: | | 450 Deals | 2353 People | 605 Companies | 31 Funds | | | | | | |
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The Daily Benchmark:
2017 Vintage Global PE Funds | | | | | | |
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| A message from Apex Group | | |
Fund managers benefit from $3.8M savings with Apex Group | | Forrester Consulting, in an independent study, interviewed key decision-makers across a number of large Apex Group clients, and the findings included in its Total Economic Impact™ study of Apex Group are compelling: - Around $5.4M in cost benefits
- $2.75M Net Present Value over three years
- 105% return on investment ROI
To find out more about the benefits and savings that Apex Group's single-source solution can provide, download Forrester's Total Economic Impact™ report.
Download now | | | | | | | |
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German ecommerce aggregator Razor Group has extended its Series C to a total of €80 million with participation from Upper90. The company also acquired peer Stryze Group.
Complement Therapeutics, a Munich-based biotech company, has closed a €72 million Series A led by Gimv and Forbion.
Yonder, a London-based credit card rewards startup, has raised £62.5 million in a Series A led by Northzone and RTP Global.
Amsterdam-based invoicing platform Factris has secured €50 million from Aegon Asset Management.
Paligo, a Swedish developer of a component content management system, has raised $29 million from GRO and Alfvén & Didrikson.
Capitola has raised a $15.6 million Series A led by Munich Re Ventures for its AI-powered insurance marketplace.
London-based medical imaging startup Scan.com has closed a $12 million Series A. The round was co-led by Aviva Ventures, YZR Capital, Oxford Capital, Triple Point and Simplyhealth.
Perci Health, a London-based digital cancer-support clinic, has secured a £3.4 million seed investment led by Octopus Ventures. | | | | | |
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| Athletic apparel brand Lululemon Athletica is considering a sale of in-home fitness equipment company Mirror, Bloomberg reported. Lululemon acquired formerly VC-backed Mirror in 2020 for $500 million. | | | | | |
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AEA Investors has closed a continuation fund for Singer Industrial, an industrial rubber and fluid power products distributor, on $384 million.
Insurance company Aviva has committed an additional £150 million to its VC arm, Aviva Ventures. The new funding has already been used to invest £1.5 million in medical imaging specialist Scan.com. | | | | | |
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| Merck has agreed to buy Prometheus Biosciences for about $10.8 billion, strengthening the pharmaceutical company's position in the immunology market. | | | | | |
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"The quarterly data has taken on the appearance of a stock chart trying to find support. While we are well above the pre-COVID-19 averages of roughly 1,400 deals and $180 billion in deal value, the trend is still flat to down, and we have yet to make a definitive bottom."
Source: PitchBook's Q1 2023 US PE Breakdown | | | | | |
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