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Monday, July 31, 2023

Infrastructure giants face new players

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The Daily Pitch: VC, PE and M&A

July 31, 2023

The Daily Pitch is powered by PitchBook's industry-defining research and best-in-class data

In today's Daily Pitch, you'll find:

A new business model aims to shake up infrastructure industries

As US PE buyouts stall, growth equity deals gain ground

Through a new continuation fund, L Catterton plans to hold one asset into its 16th year

Today's Top Stories

Can decentralized infrastructure providers disrupt the status quo?

Physical multibillion-dollar infrastructure industries like wireless telecoms, sensor networks and cloud servers have long held the status quo, but decentralized physical infrastructure networks, or DePINs, could upend them with a new business model.

These networks, which use token incentives to help offset the huge capital expenditures required to build physical infrastructure, are the focus of our recent analyst note. DePINs may still have a way to go before they are ready for prime time, but VC deal trends indicate investors are bullish on the new vertical.

read the preview

Growth equity deal flow defies slowdown in PE dealmaking

(Eoneren/Getty Images)

Growth equity investors increased their share of US PE deal count during the first half of this year as buyouts saw a deeper decline amid market volatility and a dearth of cheap debt financing.

Valuation is only one piece of the puzzle when it comes to growth equity financing. During the bargaining process, other factors like synergies from the investment are also evaluated, making it easier to find common ground than in buyout negotiations.

A message from Apex Group

The Growth and Evolution of Private Markets—Research Report

The finance industry is undergoing a significant transformation. Several major trends are reshaping the space and opening new possibilities for investors and companies.

Get ahead of the trends with Apex's latest insights report, supported by PitchBook data. Apex experts explore how these new dynamics will impact investors and the market, giving you the facts, and insights, you need to navigate challenges and opportunities for your firm.

What insights can you expect from the report?

Exploring fundraising challenges
Ways to unlock opportunities
Trends in changing investor bases
ESG, fintech and new asset classes
Practical takeaways for fund management
Data insights from the numbers

To find out more, download the Apex Research report on the Apex Group website here.

L Catterton squeezes liquidity from old asset with continuation fund

(Bogdan Kurylo/Shutterstock)

Even after nearly 16 years together, L Catterton isn't ready to call it quits on one of its portfolio companies. The PE firm just closed a single-asset continuation fund for PatientPoint Health Technologies, a company it's held alongside other investors since 2007.

L Catterton's decision to renew its vows with PatientPoint is the latest example of GPs taking advantage of options to boost liquidity for their LPs while holding onto assets that could have more potential for growth.

Emerging managers' fundraising slump is a blow to smaller VC ecosystems

(Mara Potter/PitchBook News)

Emerging managers in the US are on track to see their annual fundraising slump below $20 billion for the first time in seven years, as economic volatility pushes LPs to stick with more established managers.

For the startup ecosystem, emerging managers' challenges mean less cash available outside of major metropolitan areas and fewer niche investors on the hunt for innovative companies.

PitchBook Benchmarks for PE, VC, and more

Now more than ever, allocators need clear-cut data to help guide their decision-making. But in the opaque world of private capital, finding transparent fund performance figures can be a challenge.

Enter PitchBook Benchmarks, which offer the latest data for closed-end fund returns across strategies and vintage years. The new edition is now available, updated through Q4 2022 with preliminary data for Q1 2023. It features downloadable XLS tables, data visualizations and PDFs that break down the numbers by strategy and geography.

see the data

Recommended Reads

Tech companies' friendly new strategy to destroy one another. [The Atlantic]

Inside Walmart's warehouse of the future. [The Wall Street Journal]

Can the US balance protectionism and cooperation in the global race to develop quantum technologies? [The New York Times]

Since yesterday, the PitchBook Platform added:

Deals

185

People

Companies

See what our data software can do

The Daily Benchmark:
2014 Vintage Global Debt Funds

Median IRR

8.10%

Top Quartile IRR

10.05%

1.08x

Median DPI

Select top performers

GoldenTree Distressed Fund II

Strategic Value Special Situations Fund III

GS Mezzanine Partners VI

*IRR: net of fees

61 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

VC Deals

Medical imaging startup Rivanna has secured $30.5 million from the Biomedical Advanced Research and Development Authority.

Cleantech startup Veir has raised a $24.9 million Series A2 from investors including Breakthrough Energy Ventures and Congruent Ventures.

Cancer monitoring specialist Entia has raised $20 million. The round was led by BGF and Parkwalk, Sky News reported.

Women's healthcare startup HerMD has raised $18 million from investors including Jazz Venture Partners, Amboy Street Ventures and B-flexion.

QuoIntelligence, a Frankfurt-based cyber threat intelligence specialist, has raised €5 million in a seed round led by Ecapital Entrepreneurial Partners.

PE Deals

Brookfield Asset Management is in talks to sell Everise to Warburg Pincus for up to $1.3 billion, The Economic Times reported. Investors including BPEA EQT-backed Sagility and Veritas Capital are also competing for the outsourcing company.

A joint venture formed by Saudi Arabian Mining Co. and PIF has agreed to acquire 10% of Brazilian miner Vale's base metals business, while Engine No. 1 will acquire an additional 3%, Reuters reported. Together, the transactions total $3.4 billion.

BPEA EQT has agreed to acquire a majority stake in Indian fertility services provider Indira IVF from TA Associates.

Asterion Industrial Partners and Daniel Kretinsky's EPH are the last remaining bidders for German power company Steag, Bloomberg reported. KKR and EQT had also been interested in acquiring the utility.

Travel industry data provider OAG, newly backed by Vitruvian Partners, has acquired air travel data specialist Infare from Ventiga Capital.

Bluestone Equity Partners has invested in Melbourne-based PMY Group, which provides international venues and major events with technical design, infrastructure and technology.

Exit & IPOs

Lone Star Funds-backed Portuguese bank Novo Banco has been preparing to make an IPO when markets reopen further, Reuters reported.

IK Partners is selling its stake in German medtech company Klingel to Stockholm-listed Elos Medtech.

Fundraising

Ecommerce software specialist Wex has launched a VC arm, Wex Venture Capital, with $100 million to invest in early-stage energy-transition startups. It has already backed Chargetrip and Ev.energy, which both offer software to support electric vehicles.

Corporate M&A

Biotech company Biogen has agreed to acquire Reata Pharmaceuticals, which focuses on treatments for rare neurological diseases, for around $7.3 billion. The deal would give Biogen access to Reata's medication Skyclarys.