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| In today's Daily Pitch, you'll find: | | | | | |
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| 37% of first-time VCs might not be able to raise a second fund | | 2021 was the heyday for new entrants in venture capital: First-time fundraising reached a peak of $14.7 billion, including to more inexperienced managers without bulletproof track records or networks. Now that LPs have retreated, those same fund managers are in trouble, according to our latest analyst note.
More than 247 first-time managers that closed funds between 2019 to 2021 won't be able to raise a sophomore fund, according to PitchBook estimates. Those particularly at risk of being incapable of raising a second VC fund will likely be managers of funds with less than $10 million in commitments and those in emerging US markets. | | | | | | | | | Q&A: How technology can streamline fund financing | |  | Bridge founder Andrew Frazer Smith
(Courtesy of Bridge) | | | The fund financing market has felt a particular strain on subscription credit lines, a kind of facility secured against LP commitments.
We talked with Andrew Frazer Smith, the UK-based founder of Bridge, a platform to connect GPs to lenders and remove many of the inefficiencies in the market. | | | | | | | |
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| A message from the American Investment Council | | |
| How PE complements and strengthens the health care system | | America's health care system is one of the most complicated in the world. That is why private equity deserves credit for helping health care companies achieve better patient outcomes. Academic studies point to those successes: One concluded that "PE-acquired hospitals have better survival prospects" compared with hospitals that are not PE backed,1 while another concluded that one PE firm's push into urgent care centers in Appalachia yielded a long list of better patient outcomes.2
In conjunction with PitchBook, the American Investment Council has released A Partner to Health Care: How Private Equity Complements and Strengthens the Health Care Industry, which shows, with data and examples, how PE firms do just that.
To download the report and learn more, click here.
1: "Private Equity in the Hospital Industry," SSRN, Janet Gao, Merih Sevilir, and Yongseok Kim, September 15, 2021.
2: "The Effect of Health Care Entrepreneurship on Local Health: The Case of MedExpress in Appalachia," West Virginia University, Amir B. Neto and Joshua C. Hall, 2017. | | | | | | | |
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| Private markets lag historical returns. Is a catch-up in store? | | The first half of 2023 was a challenging period for private market strategies. PE, VC and private debt lagged their historical returns, and only real assets outperformed its 10-year average. In fact, PE returned only 6.6% for the year through June, a massive dip from its average return of 16.4% over the last decade.
But the surge in public market returns is a sign of optimism for PE and VC. Our Q2 2023 Global Fund Performance Report, with preliminary Q3 data, shows that private market strategies are hinting at signs of life. Last year was a surprisingly good year in the public markets, a trend that may spur private fund write-ups in Q4 2023. Only time will tell. | | | | | | | | | Are take-privates taking off again in 2024? | |  | | (Epixx/Getty Images) | | | Take-private dealmaking may not have reached the same dizzying heights last year as 2021 and 2022, but it was still a strong year.
Several take-private mega-deals—including the two largest PE buyouts of the year—pushed through along with a wave of smaller deals, encouraged by lower valuations. Will we see more of the same in 2024? | | | | | | | | | Biotech IPO surge sparks hope for tech offerings | |  | | (Tanja Ivanova/Getty Images) | | | The biotech IPO calendar has suddenly filled up. Some see it as a harbinger of future tech offerings—after all, pharma and biotech listings led the rise and fall of the last IPO wave.
But not everyone is convinced: Biotech companies have different motivations for going public, and tech startups may wait for a market leader to test the waters before they risk stepping forward. | | | | | | | | | London still the center of European PE growth fundraising | |  | | (Alexander Spatari/Getty Images) | | | London remains the biggest hub for European PE growth fundraising, accounting for five out of the 10 biggest fund closes last year. But European growth funds remain small in size compared to their US cousins.
Take a look at the list of those 10 biggest closes. | | | | | | | |
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| | Since yesterday, the PitchBook Platform added: | | 3 Deals | 35 People | 34 Companies | | | | | | |
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The Daily Benchmark:
2014 Vintage Global VC Funds | | | | | | |
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Firefly Bio, a biotech startup based in San Francisco, has emerged from stealth with a $94 million Series A co-led by Versant Ventures and MPM BioImpact.
Childcare network startup Upwards, which is based in Los Angeles, has raised a $21 million Series B led by Alpha Edison.
Israeli insect farming startup FreezeM has secured a $14.2 million Series A from investors including the European Innovation Council Fund.
California-based Vatom has raised a $10 million Series B led by GSV AirCO for its customer engagement platform.
Coding permissions startup Permit.io, which is based in New York, has raised an $8 million Series A led by Scale Venture Partners.
Coatue, Gigascale Capital and ReGen Ventures are among participating investors in a $6.2 million seed round for HVAC intelligence software company Arch.
Toronto-based Armilla AI, an AI testing and assurance startup, has received a $4.5 million seed round led by Mistral Venture Partners.
Simplyblock, a German high-performance cloud storage startup, has raised a $2.75 million seed investment led by 42CAP.
UK-based HR tech startup MeVitae has secured €1.7 million in a round led by Apex Black. | | | | | |
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