News: Perfecting a pitch in a VC downturn

Tuesday, July 25, 2023

Perfecting a pitch in a VC downturn

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The Daily Pitch: VC, PE and M&A

July 25, 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:

Investors share tips for founders pitching startups during a VC downturn

Altice's potential sale of Cheddar News highlights a struggling adtech sector

These five trends defined Europe's VC market in H1

US PE records its first significant jump in exit value in more than a year

Today's Top Stories

How-to guide: Pitching in a VC downturn

(Gonzalo Aragon/Shutterstock)

When it comes to pitching during a downturn, startups are under increasing pressure to focus on the financials. At the same time, a lot of the old rules still apply when lining up those crucial meetings.

We spoke to VC investors about what they are looking for in the current climate when meeting with potential future portfolio companies.

US PE picks up the pace of exits

With four big M&A sales and IPO listings to close out the quarter, US private equity recorded its first big bounce in exits in more than a year. Our Q2 2023 US PE Breakdown, sponsored by Stout, West Monroe and Twin Brook Capital Partners, details how PE firms kept busy buying and selling despite a tough lending environment.

Exit value surged by 66.9% quarter-over-quarter, a high point since crashing six quarters ago and a much-needed boost as funds run out of time to wind down holdings.

Debt for LBOs has dropped off noticeably in 2023. The average loan-to-value ratio has fallen to 43% this year, down from the five-year average of 52%.

Among other deal types, take-privates got smaller this year. More than half of announced deals have clocked in under $1 billion.

read the report

A message from Cherry Bekaert

Carve-out transactions and how they differ from a typical acquisition

As persistently higher interest rates and inflation pressure dampen the earnings outlook, corporations have begun to focus on opportunities to raise cash from divestiture of non-core business segments. On the surface, these carve-out transactions may present a compelling opportunity to acquire a mature business, but there are often hidden challenges below the surface that can impact the buyer’s ability to produce transformative growth and profitability improvements.

Digital due diligence—often undertaken in tandem with other diligence streams including financial, tax, and commercial activities—can aid in assessing entanglements with parent systems and operations that need to be addressed to unlock the true growth potential of a carve-out acquisition strategy.

Watch this short video to learn more

Troubled times for adtech: Altice weighs Cheddar News sale

Altice USA owner Patrick Drahi
(Christophe Morin/Getty Images)

After less than four years, Altice USA is looking to sell online news site Cheddar News. It's the latest sign that companies relying on advertising sales—even digital news providers like Cheddar that were once touted as future heavyweights of their industry—are in deep water. Adtech sales are on the decline, and VCs have pulled back on funding.

5 charts: European VC struggles persist in H1

(i am adventure/Shutterstock)

Venture dealmaking in Europe continued to decline during the first six months of the year as high inflation, higher interest rates and a challenging fundraising landscape kept activity muted.

PitchBook's Q2 2023 European Venture Report highlights five key trends that have defined the region's VC market so far this year.

Recommended Reads

Does OpenAI CEO Sam Altman know what he's creating? [The Atlantic]

From Twitter to X: Elon Musk begins erasing an iconic internet brand. [The New York Times]

Fear of missing out drives investors as the IPO market awakens from a long slumber. [The Wall Street Journal]

Since yesterday, the PitchBook Platform added:

536

Deals

2059

People

712

Companies

Funds

See what our data software can do

The Daily Benchmark:
2018 Vintage Global VC Funds with less than $250M

Median IRR

29.16%

Top Quartile IRR

42.68%

0.14x

Median DPI

Select top performers

Boulder Ventures VII

Inter-Atlantic Ivy

Snö True North

*IRR: net of fees

47 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

VC Deals

Data privacy specialist OneTrust has raised $150 million in a round led by Generation Investment Management.

Space-tech startup Impulse Space has raised a $45 million Series A led by RTX Ventures.

European neobank Bunq has raised €44.5 million from investors including Pollen Street Capital at a €1.65 billion valuation.

Crescendo Biologics, which develops therapeutics for cancer, has raised $32 million from Sofinnova Partners and Andera Partners, among others.

Constellr, a German startup that uses satellite imaging to track vegetation and soil health, has secured €17 million in a seed round led by Karista.

Motion G, a Singapore-based AI engineering startup, has raised a $16 million round led by Episteme.

Electric vehicle charging startup Voltpost has raised a $3.6 million seed round led by RWE Energy Transition Investments.

Don't miss our upcoming webinar

ESG and sustainable investing are now a mainstay of market discourse, but there remains a lack of consensus on how and where these terms should be applied. Join our speakers from the PitchBook Institutional Research Group for a discussion on ESG's evolving perception and usage, as seen through the lens of the 2023 Sustainable Investment Survey.

Register now to secure your spot.

PE Deals

Public Storage, a self-storage facility network, has agreed to buy Simply Self Storage from Blackstone Real Estate Income Trust for $2.2 billion.

Beauty ecommerce company The Hut Group has sold its OnDemand division to its management team, funded by investment firm Gordon Brothers.

Bain Capital has agreed to acquire Indian shadow banking firms Adani Capital and Adani Housing from founder Gautam Adani.

Ardian has agreed to buy Attero, an independent waste management and circular economy company based in the Netherlands.

London's Flywheel Partners has picked up a majority stake in UK plant-based ingredients manufacturer Freshcut Foods.

Workforce management software provider Smartlinx has received a strategic investment from Lone View Capital, which has acquired a majority ownership stake in the company.

GTCR has agreed to acquire Once For All from Warburg Pincus. Headquartered in the UK and France, the company offers compliance and supply chain management software for the construction industry.

Fundraising

Venture firm DCVC has raised $1 billion to invest in deep-tech startups.

Gainline Capital Partners, which targets lower-middle-market companies in the US, has closed its second fund on $400 million.

Eagle Merchant Partners has closed its first fund on $265 million. The Atlanta-based PE firm invests in consumer and industrial businesses.

Milan's United Ventures is raising a €150 million fund that will make investments in early-stage European technology companies focused on digitization.