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In today's Daily Pitch, you'll find: - An analysis of the key trends driving Europe's PE ecosystem to record highs.
- As the SPAC boom fizzles, VCs are leading a new kind of charge in the electric vehicle space.
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| European PE rides the wave to record-breaking numbers | | European private equity has reached a fever pitch, with deal activity already hitting a new annual record in 2021. The three largest-ever quarters for PE occurred this year, driven partly by the increasing vaccination rate, massive levels of dry powder and sellers wanting to take advantage of the frothy valuation environment.
Our Q3 2021 European PE Breakdown examines the key trends shaping the continent's PE ecosystem, breaking down activity across deals, exits, fundraising and countries. Highlights of the report include: - After three outstanding quarters, deal activity is expected to slow as sponsors near the completion of their dealmaking catch-up after 2020's down year.
- Q3's exit volume reached a new quarterly peak, with 425 closed deals worth around €126.4 billion, marking year-over-year increases of 96% and 202.8%, respectively.
- Despite an explosive start to the year, fundraising activity cooled slightly in Q3, putting 2021 on pace for the lowest annual fund count total since 2012.
| | | | | | | | | | As EV blank-check boom fades, VCs double down on electrification startups | |  | | (Marija Obradovic/Getty Images) | | | A year ago, SPAC dealmakers created a furor of excitement for electric vehicle makers, striking pacts to take more than a half-dozen companies public with dizzying speed. Now venture capitalists are leading a new kind of EV charge. - VC investment in the EV sector hit $17.8 billion in the first nine months of 2021, up from $10.6 billion last year.
- It's no longer about finding the next Tesla—much of the money is going to startups that support electrification in ways other than making vehicles.
- Many new EV stocks have performed poorly, but they have also driven new deals by giving VCs a clearer line of sight to future exits.
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| A message from SS&C Intralinks | | |
| ESG and DEI reporting: Rising quality, but volume falling short of LP demands | | More GPs are integrating environmental, social and governance (ESG) and diversity, equity and inclusion (DEI) data into their investor reporting. But while data quality is improving, a new survey from PineBridge Investments suggests that LPs are unhappy with the data volume, frequency and formats.
Intralinks' new report, How Limited Partners Are Mitigating the ESG Data Gap, produced in association with Private Equity Wire, features interviews with top LPs that reveal evolving investor sentiment and offer ways for fund managers to course-correct on environmental and diversity reporting. Highlights include: - Reporting standardization models.
- Criteria in Europe versus the US.
- Secure, technology-enabled fund transparency.
- KPI reprioritization: leaner and greener.
- Investor reporting preferences forecast.
Bridge the ESG and DEI data gaps. Download this new report now. | | | | | | | |
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| Thinking through GP stakes fund weighting and location in a portfolio | |  | | (Serg Myshkovsky/Getty Images) | | | GP stakes funds are unique among private equity strategies. This allocation has its appeal—offering yield and differentiated downside protection, and the funds benefit when the underlying firms perform well.
With over $20 billion currently being raised across GP stakes funds, many LPs are looking to make their first allocation to this strategy.
Yet because the strategy is so unlike others, it can be challenging to choose the right allocation bucket and weight within a broader portfolio. Our recent analyst note explores GP stakes allocations and theorizes on how best to bucket and weight these funds. | | | | | | | | | | As other central banks raise interest rates, the Federal Reserve and the European Central Bank are betting against the inflation surge. [The Wall Street Journal]
How the cables are being laid to knit together the world's electricity grids. [The Economist]
Pedro Guazo's plans for the UN pension fund's billions. [Institutional Investor] | | | | | |
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| 2018 Vintage North American Venture Funds | | | | | | |
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| A message from RBC Capital Markets | | |
| How will private equity strategies drive the market moving into 2022? | | M&A volume has reached record levels driven by a few catalysts, including an accommodating low-rate environment, faster-than-anticipated economic recovery and sponsors putting significant private capital to work. According to RBC's co-head of Global M&A, Vito Sperduto, "In the first half of 2021, about a quarter of the deals $1 billion or more were private equity acquisitions. We also had almost half a trillion dollars of new LBOs in the first half of the year."
What types of deal structures are evolving in this environment? Will convergence continue to drive M&A? How are PE firms diversifying across sectors?
See why more complex PE deals are the future, and what the M&A outlook is for 2022, with insights from RBC Capital Markets' industry experts. | | | | | | | |
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| Culture Biosciences raises $80M | | | | | | | | | Clarifai lands $60M Series C | | | Clarifai has raised $60 million in a round led by NEA. The New York-based company is the developer of an AI-based visual recognition platform designed to interpret unstructured images, videos and audio data. | | | | | | | | Zeus Living brings home $55M | | | Zeus Living has raised a $55 million Series B led by TI Platform Management. The company is a provider of furnished housing intended for short-term business and personal travel. Zeus Living was valued at $110 million in May 2020, according to PitchBook data. | | | | | | | | Spot AI launches with $22M Series A | | | Spot AI has raised $22 million in a round led by Redpoint Ventures, with support from Bessemer Venture Partners. Based in the Bay Area, the company is the developer of a video intelligence platform that allows businesses to easily access, search and share security footage. | | | | | |
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| Medallia shareholders approve $6B+ takeover by Thoma Bravo | | | Shareholders of Medallia, the provider of a customer and employee experience platform, have approved a $6.4 billion takeover by Thoma Bravo. Medallia shareholders will receive $34 per share in cash, which represents a 20% premium to the company's closing stock price June 10. The deal is expected to close by Nov. 1. | | | | | | | | Clearlake seals $5B+ Cornerstone buyout | | | Clearlake Capital has completed its $5.2 billion acquisition of Cornerstone OnDemand, a provider of talent management software. Cornerstone shareholders will receive $57.50 per share in cash, which represents a 31% premium to the company's closing stock price June 1. | | | | | | | | EQT circles German credit bureau Schufa at $2B+ value | | | EQT is targeting a takeover of German credit bureau Schufa Holding at a €2 billion value (about $2.3 billion), Bloomberg reported. Schufa is the equivalent of the FICO credit score business in the US. EQT currently owns a 10% stake in the company. | | | | | | | | Bain Capital invests $82.5M in Bionexo | | | Bain Capital Technology Opportunities has invested 450 million Brazilian reals (around $82.5 million) in Latin American cloud software and data analytics provider Bionexo. The company connects healthcare suppliers and providers and has received past funding from Prisma Capital, Apus and Temasek. | | | | | |
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| PE-backed telecom company raises $378M in IPO | | | | | | | | | Laser hair removal specialist files for IPO | | | Milan Laser, a hair removal specialist backed by Leonard Green & Partners, has filed for an IPO. The Omaha-based company plans to list on the NYSE under the ticker symbol MLAN. | | | | | |
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| Evolution Equity Partners closes second tech fund on $400M | | | Evolution Equity Partners has closed its second technology vehicle on $400 million. The firm will use the financing to make investments of $10 million to $50 million in cybersecurity and enterprise software companies. The fund's predecessor closed on $125 million in 2017. | | | | | |
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"Mega-deal activity marched onward in Q3 as the YTD number of $1 billion+ deals surpassed 2020 by both number and value. In an environment of low interest rates, high asset prices, a preponderance of mega-funds ($5 billion+), and record levels of dry powder, PE firms are emboldened to pursue massive deals."
Source: PitchBook's Q3 2021 US PE Breakdown | | | | | |
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