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| In today's Daily Pitch, you'll find: | | | | | |
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| For clean energy founders, it feels like 2021 again | | In their best quarter since 2021, VC-backed clean energy startups brought in $5.4 billion in Q2, indicating the vertical's resilience. Driving the industry's success is major investment into solar and hydrogen technologies, per our latest Emerging Tech Research, another impact of the US Inflation Reduction Act and the Department of Energy's Hydrogen Shot initiative.
For new opportunities in the buzzy vertical, investors should brush up on nuclear fusion and geothermal energy, where engineers are recording breakthroughs in technologies targeting our reliance on fossil fuels. | | | | | | | | | Why VCs are suddenly flocking to mining deals | |  | | (MARTIN BERNETTI/Getty Images) | | | Mining is a quintessential legacy industry, controlled by a small cohort of entrenched companies like Rio Tinto and BHP. Fledgling companies have struggled to overcome the high costs required to disrupt traditional extractive technologies.
It's no wonder that venture investors have historically steered clear of the industry.
But enticed by new innovations, VCs recognize the need for critical minerals to power the energy transition and see a role for new technology in challenging the major players. | | | | | | | |
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| | Private equity's buy-and-build model has become a popular tool over the past decade. Today, add-ons account for almost 80% of all buyouts in the US—a big increase in a short amount of time. But a closer look at the data shows that the majority of add-ons are happening in only a handful of fragmented, highly competitive industries, like insurance, outpatient clinics, and landscaping, among others.
In partnership with PitchBook, AIC has released Building Competition: How buy-and-build helps the American economy. The buy-and-build model helps those sectors become more competitive, provide better goods and services to their customers, and generate higher returns for long-term investors like public pension plans.
To download the report, click here | | | | | | | |
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| The storm has passed for many agtech startups | | Aquaculture and farm management software companies rebounded in Q2, both scoring their second-strongest quarters in VC deal value on record. It's sunnier skies ahead for parts of agtech, as our recent Emerging Tech Research on the space forecasts a positive dealmaking outlook through the rest of the year.
Keep an eye out for sustainable fisheries, biofertilizer startups and retrofitting of farm machinery—all rapidly evolving segments. | | | | | | | | | How to play the private equity game without a fund | |  | | (Joey Schaffer/PitchBook News) | | | In 1998, Scott Dickes left his job as a vice president at a private equity firm and embarked on the quixotic journey of a fundless sponsor.
A fundless sponsor (or "independent sponsor," per a more recent conceptual rebrand) is an investor that pursues a deal without the security of the committed capital in a PE fund. A typical timeline for an independent sponsor starts when a PE professional spins out of an established investment shop, spots an asset that shows some potential, negotiates the acquisition, and scrambles to get the equity financing and leverage later.
Turns out you don't actually need a fund to play the private equity game. | | | | | | | | | How generative AI could fit into enterprise fintech | | | Enterprise fintech has been hitting the brakes from its highs in 2021 and 2022. Even counting Stripe's mega-deal of $6.9 billion, total VC deal value for Q2 2023 decreased 11.9% year-over-year. Still, generative AI is on the rise, and our recent Emerging Tech Research covers opportunities for enterprise fintech investors, especially in applying generative AI technology to segments such as fraud and compliance, sales, and productivity. | | | | | | | | | | PE firms borrow billions to expand fiber-optic broadband internet. [The Wall Street Journal]
Google is employing generative AI as part of its push to solve problems in healthcare. [Forbes]
America is using up its groundwater like there's no tomorrow. [The New York Times] | | | | | |
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| | Since yesterday, the PitchBook Platform added: | | 377 Deals | 2539 People | 525 Companies | 12 Funds | | | | | | |
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The Daily Benchmark:
2011 Vintage North American Real Estate Funds | | | | | | |
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Tiger Global has sold its remaining stake in Indian food delivery company Zomato in a deal worth 11.24 billion rupees (around $136 million), Reuters reported.
E.l.f. Beauty has agreed to acquire skin care brand Naturium for $355 million. Naturium received a minority investment from Prelude Growth Partners in 2021. | | | | | |
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| Lighter Capital, a provider of revenue-based financing, has raised a $130 million credit facility to fund early-stage SaaS, technology services, subscription services, and digital media startups. | | | | | |
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"Average deal size has come down in 2023, which is to be expected given sponsors are more diligent and hesitant in their approach towards megadeals, focusing rather on deals in the range of €10 million to €25 million."
Source: PitchBook's Q2 2023 European Venture Report | | | | | |
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