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In today's Daily Pitch, you'll find: - Our latest analyst note explores how LPs are evaluating today's challenging market.
- PE mega-deals have a tough act to follow this year after a lucrative 2021.
- Ireland and the UK continue to pull in the lion's share of startup investment in Europe. We've mapped out the key trends, including insights into dealmaking, fundraising and exit activity.
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| Allocator perspectives on 2022's market challenges | | Various forces have disrupted the global markets over recent years. While supply chain issues caused by the COVID-19 pandemic and Russia's invasion of Ukraine have upset global markets and blindsided analysts, many investors that have anticipated a resurgence of inflation since the stimulus coming out of the global financial crisis may feel better prepared to address the current environment.
It remains to be seen if the supply-driven inflation can be rectified structurally before lasting damage occurs. Reports of hiring freezes have become prevalent, even as unemployment remains at historically low levels.
Our latest analyst note discusses factors LPs are considering in 2022, including the denominator effect, call and distribution activity, and opportunistic tactics for the current environment. Key takeaways include: - Overall, there is still plenty of dry powder available to support existing portfolios, though that will vary from fund to fund.
- Inflation and rising interest rates can be destructive to investment returns, but LPs are tactically eyeing cash, real estate, real assets and private debt for potential areas of relief.
- LPs are likely to take a breath at times of market volatility, though how long that breath lasts can depend on factors such as governance and the portfolio's purpose.
| | | | | | | | | US PE mega-deals keep on trucking following standout year | |  | | (We Are/Getty Images) | | | After a lucrative 2021, private equity mega-deals are off to a solid start through the first three months of this year, accounting for 17 transactions totaling nearly $80 billion.
Our analysts expect the aggregate value of mega-deals—transactions involving $1 billion or more—could come down slightly this year, and that deal count should hold up well compared with 2021. | | | | | | | |
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| A message from SS&C Intralinks | | |
| All VDRs are not created equal. This checklist can tell you if yours is secure. | | Most virtual data room (VDR) providers claim to offer a secure platform. But how can you be sure your deal documents and confidential company information are protected throughout the deal lifecycle?
Download this comprehensive checklist, Key Security Questions to Ask Your VDR Provider, to ensure the VDR you're considering will keep your data secure at every level: - Document—Does the provider lock documents at the file level to control user permissions and access?
- Platform—Does the platform encrypt data at every stage to protect against external threats?
- Operational—Does the provider observe protocols to maintain security across the organization?
- Application—Does the platform let users manage the VDR securely on mobile devices?
Download this checklist | | | | | | | |
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| Mapping the UK, Ireland VC ecosystem | |  | | (belterz/Getty Images) | | | As Europe's leading VC destinations in terms of capital invested, Ireland and the UK have continued to pull in the lion's share of startup investment in the region, and this year is no different.
We've mapped out some of the key trends that have shaped the two countries over the past decade, including insights into dealmaking, fundraising and exit activity. | | | | | | | | | How emerging managers fared during the global financial crisis | | First-time managers have been riding the venture capital boom, with more than 200 new managers closing venture funds each year since 2017. But now, as the market faces a downturn, investors are hiking up the premium on experience in the fundraising market. While established managers are still flush with capital, Q1 data shows that emerging managers are already struggling to close their funds.
Our recent analyst note looks back to the global financial crisis to explore how first-time managers fare in an uncertain market. While the most difficult years are likely yet to come, the data is promising for managers that raise their first funds in the years leading up to a crisis. | | | | | | | | | | VC firms typically start out with money, adding legal support, marketing help and the like as they get bigger over time. Meet the new firm that's taking the exact opposite approach. [Forbes]
Elon Musk may have made headlines recently with his disparaging remarks on remote work, but some investors are on the same page. [Protocol]
The promise and perils that could result from a potential breakthrough in machine intelligence. [The Economist] | | | | | |
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| | Since yesterday, the PitchBook Platform added: | | 405 Deals | 2107 People | 679 Companies | 32 Funds | | | | | | |
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| 2015 Vintage European Secondaries Funds | | | | | | |
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| Shield AI raises $165M in equity and debt | | | Defense tech specialist Shield AI has raised $90 million in equity and $75 million in debt financing. The round was led by Snowpoint Ventures. Based in San Diego, the startup is developing AI-based self-driving tech for aircraft. The funding values the company at $2.3 billion. | | | | | | | Mexico-based Klar banks $90M | | | Klar has raised $90 million in a round led by General Atlantic. Founded in 2019, the company offers a digital financial services platform to users in Mexico. | | | | | | | | | Middesk has raised a $57 million Series B co-led by Insight Partners and Canapi Ventures. Based in the Bay Area, the company offers a business identity platform that helps financial institutions verify their customers and automate onboarding processes. | | | | | | | Ever/Body collects $55.5M | | | | | | | | | | | | | | | Degron Therapeutics raises $22M | | | Degron Therapeutics has raised a $22 million Series A led by Med-Fine Capital. The biotech company is developing molecular glue-based medicines that degrade target proteins during treatment for cancer, inflammation, metabolic disease and rare diseases. | | | | | |
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| Hahn & Co. to buy SKC's film unit | | | Korean PE firm Hahn & Company has agreed to acquire SKC's polyester film business for 1.6 trillion South Korean won (about $1.3 billion). The transaction, which is expected to close by the end of the year, includes chemicals giant SKC's film business, film processing subsidiary Hi-tech & Marketing, and related operations in the US and China. | | | | | | | Motive Partners invests $127M in Backbase | | | Motive Partners has invested €120 million (about $127 million) in Backbase, the provider of an engagement banking platform. The Amsterdam-based company is now valued at €2.5 billion. | | | | | | | Goldman Sachs backs sustainable textile recycler | | | Goldman Sachs Asset Management has led a $100 million investment in Recover, a producer of sustainable recycled fibers for the fashion industry. The funding values the Spanish company at about $1.1 billion, The Wall Street Journal reported. | | | | | | | Lovell Minnick to acquire London & Capital | | | Lovell Minnick Partners has agreed to acquire a majority stake in London & Capital, a wealth and asset manager. UK-based London & Capital serves domestic and international high net worth individuals. | | | | | | | Vista Equity stakes BetterCloud | | | Vista Equity Partners has invested in BetterCloud, a SaaS management platform provider. Founded in 2011, BetterCloud offers application insights, user lifecycle management and data protection. | | | | | |
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"The median early-stage software pre-money valuation reached €12.2 million in Q1 2022, pacing 50.8% higher than 2021's figure and nearly double 2020's. Software companies disrupting sectors such as food delivery, ecommerce, and financial services have displayed robust traction during the past two years, as companies and individuals have focused on online models."
Source: PitchBook's Q1 2022 European VC Valuations Report | | | | | |
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