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In today's Daily Pitch, you'll find: - Edison Partners GP Kelly Ford joins the "In Visible Capital" podcast to discuss how her firm has fared during the pandemic and managed to exceed benchmarks when it comes to a diverse workforce.
- An analysis of how startups are breaking new ground in AI and machine learning while racking up record funding from VCs.
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| How AI and machine learning are landing record VC funding | | The pandemic pushed data-driven enterprises to adopt AI and machine learning across industries. However, AI development is costly, and its usage remains limited within organizations.
Our latest installment of Emerging Tech Research spotlights private companies in the space, including Databricks, DataRobot and Samsara. The report also tracks major industry trends—covering developments in natural language processing, AI chip optimization and intelligent robotic systems. Key takeaways include: - AI venture funding set a third consecutive quarterly record in Q2 2021, with $31.6 billion invested in the vertical. The number includes 11 deals that closed at more than $500 million.
- VC exits in the vertical continued to boom in Q2, with more than $68 billion in exit value. Of the 13 IPOs during the quarter, notable exits include autonomous vehicle maker TuSimple and UiPath, an enterprise automation software provider.
- Natural language AI is becoming more widely used in text classification, chatbots, translation, call center automation and survey analysis.
| | | | | | | | | | On the podcast: The rise of Edison Partners in the PE growth landscape | | As private equity fundraising continues to surge, it's become harder than ever for lower-middle-market investors to compete.
But firms like Edison Partners have managed to succeed by showing that bigger isn't always better. General partner Kelly Ford joins the latest episode of "In Visible Capital" to discuss how the New Jersey-based investor has successfully transitioned from venture capital to growth equity investing. Other highlights include: - Ford discusses how the firm and its portfolio companies have fared during the pandemic.
- Ford describes how Edison has managed to exceed benchmarks when it comes to hiring a diverse workforce.
- PitchBook emerging tech analyst Robert Le shares some insights from our Q1 and Q2 Emerging Tech Research reports on insurtech.
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| Considerations in the valuation of pre-IPO equity interests | | It's more important than ever to follow a rigorous methodology when valuing pre-IPO equity interests. The AICPA's Accounting and Valuation Guide suggests: - Determining possible future outcomes available to the company
- Estimating and allocating future equity value to each share class
- Weighting each possible outcome by its respective probability to determine the expected future probability-weighted cash flows to each share class
- Discounting the expected equity value to present value
- Dividing the present value by the respective number of shares outstanding to calculate the value per share of each class
Download Stout's A Roadmap for the Valuation of Pre-IPO Equity Interests to learn more about what companies need to consider as they begin their pre-IPO journey. | | | | | | | |
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| KKR-led group to buy Australia's Spark Infrastructure for $3.8B | |  | | (Carlos Dafonte/Getty Images) | | | A KKR-led consortium has struck a deal to take Australian electricity investor Spark Infrastructure private for A$5.2 billion (about $3.8 billion), as PE firms continue to turn to infrastructure as a viable investment. - The revised offer from the consortium, which also includes Ontario Teachers' Pension Plan and Public Sector Pension Investment Board, values the company at A$2.95 per security, up 15 cents from last month's offer of A$2.80.
- Spark controls minority stakes in Australian electricity distributors SA Power Networks and Victoria Power Networks and owns the Bomen Solar Farm in New South Wales.
- Private equity infrastructure fundraising has gradually increased over the past decade, with the total raised peaking at more than $46 billion in 2018, according to PitchBook data.
Related read: A PE windfall from infrastructure package is no sure thing | | | | | | | | | | Machines have spent decades using artificial intelligence to grasp the meaning of English words and sentences. Now AI is learning other languages. [Wired]
While there may be a science to picking a fund manager, one writer argues that it can sometimes be best to just go with your gut. [Institutional Investor]
How do you rack up 1.7 million followers on TikTok? Just ask professional slackliner Breannah Yeh. [The New York Times] | | | | | |
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| | Since yesterday, the PitchBook Platform added: | | 412 Deals | 1360 People | 425 Companies | 18 Funds | | | | | | |
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| 2010 Vintage European VC Funds | | | | | | |
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| The booming tech M&A cycle shows no signs of stopping | | Midway through 2021, well over $360 billion in deal value and nearly 2,800 transactions have occurred in tech. Cross-border M&A volume has also been on the upswing, at nearly 1,000 deals closed for an aggregate of nearly $140 billion. In Velocity Global's latest report, the key trends defining general and cross-border dealmaking in tech are analyzed in-depth, producing findings such as: - Mature unicorns and PE funds are increasingly integral players
- Transaction multiples in cross-border dealmaking are edging up, indicating willingness to pay up
- Buyers are targeting companies earlier in their lifecycle, heading into the realm of venture-backed portfolios at a faster clip
Read the full report | | | | | | | |
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| SoftBank leads $400M round for OPay | | | OPay has raised a $400 million round led by SoftBank's Vision Fund 2 at a valuation of $2 billion, Bloomberg reported. Other investors including Sequoia China, Redpoint China, Source Code Capital and SoftBank Ventures Asia also backed the African fintech company. Based in Lagos, Nigeria, OPay facilitates mobile payments, bank transfers, savings accounts and more, with a specific focus on unbanked users. The round reportedly represents the Vision Fund 2's first investment in Africa. | | | | | | | | Payments startup Zepz worth $5B with Series E | | | London-based Zepz, formerly known as WorldRemit, has raised $292 million at a valuation of $5 billion. The startup offers a cross-border payments platform, with more than 11 million users across its two brands, WorldRemit and Sendwave. Investors in the round included Farallon Capital, Leapfrog, TCV and Accel. | | | | | | | | | | | | | | | Balto brings in $37.5M for Series B | | | | | | | | | Covera Health nabs $25M Series C | | | Covera Health has raised $25 million in a round led by Insight Partners, with participation from Equity Group Investments. The New York-based company is the developer of an analytics platform intended to help healthcare providers reduce medical misdiagnoses and improve quality of care. Covera Health was valued at $92.5 million in January 2020, according to PitchBook data. | | | | | |
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| PitchBook Webinar: Private fund strategies, manager style | | Join our upcoming webinar on Sept. 1 to hear PitchBook analysts discuss private fund strategies through the lens of manager style. Using the PitchBook Private Manager Style framework, we will explore how to assess qualitative characteristics of private market managers.
Key topics include: - Understanding the broad levers private market managers use to build portfolios and how this has changed over time.
- Understanding how a manager's exposures fit within an existing private markets portfolio.
- Ensuring a manager's actual investment history is consistent with its stated strategy.
- How to quickly compare managers.
Sign up today | | | | | | | |
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| Blue Owl set to purchase stake in CVC Capital at $15B valuation | | | | | | | | | Apollo mulls takeover of supermarket chain Sainsbury's | | | | | | | | | PE-backed Kongsberg adds on MultiCam | | | Kongsberg Precision Cutting Systems has acquired MultiCam, a Dallas-based manufacturer and distributor of cutting machines and provider of digital finishing processes for industries like manufacturing and industrials. Backed by OpenGate Capital, Kongsberg provides precision cutting systems used in packaging, signage and displays. MultiCam, which was founded in 1989, has installed over 14,000 machines globally and employs roughly 130 people. Rosewood Private Investments, which had backed MultiCam since 2014, has exited the company. | | | | | |
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| TSG-backed Dutch Bros files for IPO | | | TSG-backed coffee shop chain Dutch Bros has filed for an IPO. The Grants Pass, Ore.-headquartered company plans to raise $100 million, a figure that's commonly a placeholder before terms are set, in its offering. The chain, which owns over 470 stores, reported nearly $6 million of net income on $228 million in total revenue for the first half of 2021. | | | | | |
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| TJC snags $1.3B+ for first continuation fund | | | The Jordan Company has closed The Resolute II Continuation Fund on more than $1.3 billion. The vehicle is designed to purchase portfolio companies from The Resolute Fund II, a 2007 vintage effort that brought in about $3.6 billion for the firm. Based in New York, TJC invests in middle-market companies in sectors like consumer, healthcare, industrials and tech. | | | | | |
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