Mythical's cautionary tale for Web3 gaming

Gaming reaches for the clouds; are IPOs back? Instacart files for long-awaited debut; PE targets Europe's undervalued software sector

Read online | Don't want to receive these emails? Manage your subscription. Log in The Daily Pitch: VC, PE and M&A August 28, 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: VC funding for gaming may be flat, but the sector is still reaching for the clouds Mythical Games was a Web3 gaming darling, then came layoffs, a down round and a lawsuit Are IPOs back? Instacart files for long-awaited market debut Investor appetite remains for European software companies despite tougher dealmaking conditions   Today's Top Stories   How Mythical became a cautionary tale of the Web3 gaming gold rush (Jenna O'Malley/PitchBook News) Web3 gaming enjoyed massive investment in 2021 and early 2022 as VCs chased the next big thing in interactive entertainment. Now, that gold rush is over. Mythical Games, a one-time darling of the space, is finding out what happens when overzealous investment in a sector suddenly ends. Along with a $37 million down round, the startup has completed a third round of layoffs, scrapped its cash bonuses and shifted to issuing cryptocurrency awards to employees, and sued three former executives. Former employees share with PitchBook how the startup's fortunes suddenly turned. read more   Share: Gaming reaches for the clouds While consumer spending on video games has remained healthy, VC funding has stayed flat, according to our latest Emerging Tech Research on the space. In the second quarter, startups added $1.1 billion across 110 deals—showing funding in H1 2023 to be on par with 2020 levels. But gaming is still reaching for the clouds. The development segment has outpaced content as startups look for new ways to help create the next big games. Emerging opportunities within the sector include startups focused on cloud gaming and user-generated content sandboxes for players. read the preview   Share:   A message from PitchBook   PitchBook's 2023 Media Kit released With uncertainty across the private and public markets likely to continue, strong and insightful thought leadership is critical to your clients and prospects. By partnering with PitchBook Media, you will have daily opportunities to reach 1.5M+ industry professionals in our newsletter, and you can broaden exposure of your brand through our core industry reports. We also help clients create custom research to share data-driven insights on the market. Our 2023 Media Kit contains all the details to help your firm position itself in front of a VC or PE audience. Click here to download it today or to speak to someone on the media team. Share:   Instacart files for long-awaited IPO (SOPA Images/Getty Images) Grocery delivery specialist Instacart unveiled paperwork Friday for its arrival on Wall Street in what is expected to be the year's most-watched VC-backed IPO. That came the same week that giant chipmaker Arm filed for its public offering and could signal a long-awaited wave of IPOs. Instacart, which has raised $2.7 billion from VCs since its founding in 2012, is expected to be valued by Wall Street at a fraction of its last private valuation of $39 billion, which was set in March 2021. read more   Share: Medtech regains some strength VC funding for medical tech skyrocketed to $19.7 billion in 2021 before plummeting, and funding this year could remain moderately below 2022's levels. According to our Q2 2023 Medtech Report, deal count and value in the sector have increased since the first quarter, with a larger array of medtech categories seeing $100 million-plus VC deals—including surgical robotics and neurostimulation. VCs are also intrigued by new technologies related to precision medicine, sleep disorder treatments and mixed-reality surgical navigation. And with improved hospital margins and robust patient interest in elective surgeries, the prognosis is good for investors to return to the space. read the preview   Share: PE splurges on Europe's undervalued software sector (Weiquan Lin/Getty Images) PE investment in European software companies is on pace to match last year's total as investors continue to be attracted by a combination of low valuations, high profit margins and recurring revenues. During the surge in software investment in 2021 and 2022, €146 billion was invested across 1,795 deals, according to PitchBook data. read more   Share: Recommended Reads The Silicon Valley elite who want to build a city from scratch. [The New York Times] Why the battle against the fungal apocalypse is just beginning. [Wired] In the race to sell AI chips, how do the giants stack up? [Visual Capitalist]   Since yesterday, the PitchBook Platform added: 11 Deals 298 People 70 Companies 1 Funds See what our data software can do   The Daily Benchmark: 2015 Vintage Global VC Funds Median IRR 23.20% Top Quartile IRR 29.11% 0.41x Median DPI Select top performers Index Ventures Growth III India Quotient II Summit Partners Venture Capital Fund IV *IRR: net of fees 56 Funds in Benchmark » Check out the latest version of PitchBook Benchmarks   VC Deals   India-based grocery delivery startup Zepto has raised $200 million at a $1.4 billion valuation from investors including StepStone Group and Goodwater Capital, according to reports. International payments company LemFi has raised a $33 million Series A led by Left Lane Capital. AI SaaS company Aily Labs has secured a €19 million Series A led by Insight Partners. Qase, which offers a software testing platform, has raised $7.2 million across Series A and seed funding rounds. The Series A was led by Chrome Capital. Calopad, the Swiss developer of a heat patch used to treat local pain, has raised €4.2 million from investors including the Swiss government-backed Technology Fund. Helsinki's Metroc, which offers a sales platform for the construction industry, has secured €2 million from backers including Lifeline Ventures.   Don't miss our upcoming webinar In 2022, more than $200 billion in ecommerce merchandise was returned, significantly straining merchant supply chain operations. In this discussion, PitchBook analyst Eric Bellomo hosts Kyle Bertin from VC-backed Two Boxes, developer of a returns processing platform. Key topics include: An overview of the state of reverse logistics and the current state of operations. Technical and strategic trends impacting reverse logistics in the near-term. Opportunities and challenges to designing scalable and sustainable reverse logistics processes moving forward. Register now to secure your spot. Share:   PE Deals   I Squared Capital has been in talks to acquire Arriva, a UK-based bus and train system specialist, from German railroad operator Deutsche Bahn at a potential valuation of roughly $1.7 billion, Bloomberg reported. GKSD and Italian hospital operator Gruppo San Donato have agreed to acquire American Heart of Poland, a cardiovascular care provider, in a deal valued at around $539 million, Bloomberg reported. PAI Partners has agreed to buy pet food maker Alphia from JH Whitney Capital Partners in a deal that Reuters reported would value the company at around $1 billion, including debt. Veritas Capital has made an offer to acquire BlackBerry, a Canadian software maker formerly known for its cell phones, Reuters reported.   Portfolio Companies   Cybersecurity startup Wiz is considering a bid for SentinelOne, Bloomberg reported. Wiz is backed by investors including Lightspeed, Insight Partners and Sequoia.   Exit & IPOs   Marketing automation company Klaviyo has filed for an IPO on the NYSE. Klaviyo has raised funding from investors including Accel, Sands Capital and Summit Partners. Biotech company RayzeBio has filed for an IPO on Nasdaq. RayzeBio's backers include Sofinnova Investments and Viking Global Investors. SoftBank-backed food delivery company Swiggy is resurfacing plans for an IPO, Reuters reported. The Indian company had placed its plans on hold due to weak markets, according to the report.   Investors   Blackstone has agreed to sell a 22% stake in the Bellagio casino and resort in Las Vegas to Realty Income for $300 million, The Wall Street Journal reported. Realty Income will also invest $650 million for preferred equity through its credit business, valuing Bellagio at $5.1 billion.   Chart of the Day   Source: PitchBook's Q2 2023 European PE Breakdown   Who's in the newsletter today? Investors Accel Blackstone Chrome Capital Deutsche Bahn GKSD Goodwater Capital Gruppo San Donato I Squared Capital Insight Partners JH Whitney Capital Partners Left Lane Capital Lifeline Ventures Lightspeed PAI Partners Realty Income Sands Capital Sequoia Sofinnova Investments SoftBank StepStone Group Summit Partners Technology Fund Veritas Capital Viking Global Investors Wiz Companies Aily Labs Alphia American Heart of Poland Arriva Bellagio BlackBerry Calopad Klaviyo LemFi Metroc Qase RayzeBio SentinelOne Swiggy Zepto     About PitchBook | Terms of use | Advertise with us | Contact Follow us: This email was sent to edwardlorilla1986.paxforex@blogger.com via the PitchBook Platform. Do you want to change your email address, get a different edition or unsubscribe? Manage your subscription here. © 2023 PitchBook. Win what's next. All rights reserved.