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In today's Daily Pitch, you'll find: - After two standout years for VC mega-funds, signals point to an end for the boom.
- In Europe, VC dealmaking involving companies with at least one female founder rebounded in March, ensuring a strong finish to the quarter.
- Our Global Real Estate Report provides clarity and insights on the opaque investing strategy.
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| The mega-funds boom of 2022 finished with a fizzle | | Thirty-five venture funds raised $1 billion or more in 2022—more than three times as many as any year prior to 2021. Andreessen Horowitz alone closed four mega-funds in 2022.
But the breakout years for mega-funds aren't likely to last. Our latest analyst note tracks 60 funds in 2021 and 2022 totaling over $147 billion, driven by VC exit activity topping over $1 trillion in the same time span. LPs were paying venture more attention and, in turn, fund managers were rushing to return to market at record speed. But as one-year performance fell and exits turned stale in mid-2022, the mega-funds boom came to an end. | | | | | | | | | Public real estate's woes start to hit private investors | | Private real estate investors have a lot less capital to work with today. Real estate funds raised just over $128 billion in 2022, the lowest figure since 2013, and did so through the fewest vehicles since 2009. Dry powder is down, too, having fallen 13% year-over-year.
That's despite the private real estate world's dogged outperformance of publicly traded REITs, whose assets are more vulnerable to fluctuations in value. Some observers have questioned how long private real estate can soar above the rest.
Our Global Real Estate Report provides clarity on the opaque investing strategy, with details on fundraising and challenges in various sub-strategies. | | | | | | | | | A speedy recovery ahead: Opportunities in commercial real estate | |  | | (leolintang/Shutterstock) | | | The commercial real estate service industry experienced record profitability in 2021 during a period of low interest rates, more available capital and strong real estate valuations. But the current economic landscape has left investors concerned about the prospects of CRE service firms.
Morningstar analysts argue that CRE service firms are well-positioned to weather the economic downturn with strong balance sheets and an ability to better control their expenses. Although the near-term outlook is challenging, valuations look compelling from a long-term perspective. | | | | | | | | | Are private equity valuations too high—and would we know? | |  | | (Jenna O'Malley/PitchBook News) | | | Should there be a better way to value private equity assets? With the specter of a new financial crisis looming over all asset classes, the question of how to value PE investments rings even louder than before.
A deep dive into the methods PE firms and auditors use to estimate the value of the companies they buy can yield some unsatisfying conclusions. | | | | | | | | | Global airlines crave green fuel. Few are willing to bet on it. | |  | | (Drew Sanders/PitchBook News) | | | A consortium of 300 airlines—responsible for more than 80% of all air passengers—has committed to reaching net-zero by 2050. Their strategy relies heavily on an industry-wide transition to sustainable aviation fuels.
But where the rubber meets the tarmac, the checks that airlines are writing for green fuel technology are nowhere near matching the daunting scale of the task ahead. | | | | | | | | | VC deals for European Female Founders rally to end Q1 strong | |  | | (Julia Midkiff/PitchBook News) | | | Data from PitchBook's European VC female founders Dashboard shows that VC dealmaking rebounded in March, ensuring a strong finish to the quarter. Despite this rally, the quarterly totals remain well below the highs of 2021 and 2022.
In Q1 2023, there were 465 VC deals involving companies with at least one female founder with a combined €2.1 billion (about $2.3 billion), according to PitchBook data. This is the first quarterly increase in dealmaking since Q2 2022. - Companies with at least one female founder have garnered 20% of all European VC capital raised in 2023, according to PitchBook data, the highest on record. Companies with only female founders have raised 1.2% of all capital.
- The largest financing round in Q1 2023 was London-based Adept's £500 million round (about $621.9 million) completed in February. Niki Parmar, who co-founded the AI company, left Adept earlier this year and is working on a new startup in stealth mode, according to her LinkedIn profile.
- Despite the economic headwinds affecting the UK, female-founded companies based there completed the most deals and raised the most capital out of any European country, with 137 deals garnering €1.1 billion. France came in second with 79 deals worth €323 million.
| | | | | | | | | | Stocks haven't looked this unattractive since 2007. [The Wall Street Journal]
With Russian natural gas out of the picture, Norway is stepping up to the plate. [The New York Times]
Cameras can help cities identify dangerous drivers, but officials can't always do much with that information. Now, some are considering speed-limiting tech. [Bloomberg] | | | | | |
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| | Since yesterday, the PitchBook Platform added: | | 159 Deals | 525 People | 141 Companies | 8 Funds | | | | | | |
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The Daily Benchmark:
2014 Vintage European Real Estate Funds | | | | | | |
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Full-stack observability specialist Honeycomb has raised a $50 million Series D led by Headline and joined by Insight Partners and Scale Venture Partners, among others.
Malaysian fintech startup Soft Space has secured $31.5 million in a round led by Southern Capital Group.
Spring Free EV, an electric vehicle-focused fintech company, has raised $31 million in debt and equity. The Series A equity investment was led by Spring Lane Capital.
Social Future, the creator of metaverse app MAY, or Meet Another You, has raised $6 million.
Rodeo, which offers a finance platform for gig economy workers, has raised a $5 million seed investment led by LocalGlobe.
Carbonwave, which upcycles seaweed bloom into biomaterials, has raised a $5 million Series A led by Mirova.
Biotech startup CND Life Sciences has secured $4.5 million, bringing its total seed funding to $12.5 million. Investors including Top Corner Capital participated in the round.
Third Summit, the parent of content creation platform Alteon.io, has raised $4.5 million in a seed round led by Florida Innovation Capital.
Native AI, the developer of a market intelligence platform, has raised $3.5 million in seed funding co-led by Jumpstart Ventures and Ivy Ventures.
Recruitment software startup Engin has secured $2.5 million in a seed round led by Gotham Green Partners. | | | | | |
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KKR is closing in on a deal to buy a large stake in London-headquartered communications company FGS Global, the Financial Times reported. The deal would value the company at $1.4 billion, according to the report.
Hunter Point has taken a passive minority stake in UK middle-market PE firm Inflexion. Founded in 1999, Inflexion has returned £5.3 billion to investors with a 39% IRR to date.
Accession Capital has acquired a 25% stake in Exact Systems, a testing, inspection and certification company based in Poland.
Brand investor Piper has reinvested £8 million in Monica Vinader about a month after exiting its stake in the London-based jewelry company. Bridgepoint bought a majority stake in the business March 10.
Fintech company Arcesium has acquired Aquata, an investment management-oriented data platform. Arcesium was founded in 2015 as a joint venture of DE Shaw Group and Blackstone Alternative Asset Management, with later backing from JP Morgan.
Mill Point Capital has acquired Florida-based horticulture-tray manufacturer Nursery Supplies from Lincolnshire Management, which first acquired the company alongside other investors in 2005. | | | | | |
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Canaan has raised $650 million for its eighth flagship fund to invest in early-stage healthcare and technology companies. The firm also raised $200 million to reinvest in its existing portfolio companies.
Coller Capital is looking to raise 1.5 billion yuan (about $218 million) for its first Chinese-currency secondaries fund. Coller, which has offices in Beijing and Hong Kong, will use the fund to provide liquidity to the private capital markets in China.
Africa-focused VC firm Equator has held a $40 million first close for its debut fund. The vehicle will target seed and Series A investments in sectors including energy, agriculture and mobility. | | | | | |
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"Nordic exits were much more resilient than exits elsewhere in Europe: Exit value decreased 45.1% for Europe in 2022, marking the worst performance in nine years. In comparison, the Nordics fared much better and recorded their second-best year on record, totaling €57.7 billion in exits."
Source: PitchBook's 2023 Nordic Private Capital Breakdown | | | | | |
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