Happy Monday. Here’s what we’ve got today…

• A look at biotech’s strong start to the year

• The deal sheet, plus a look at EQT’s founding story

Investors see a return to biotech, backed up by a strong first-quarter

By Bob Clair

Biotech is staging a rebound in 2024, with both private funding and IPO filings up meaningfully year-over-year through the first quarter.

Already in 2024, biotechs in the U.S. and Europe have raised $6.8 billion in venture funding, $1 billion more than the most active quarter in 2023. Seven firms have completed IPOs.

Of the first quarter raises, 26 biotechs closed on private rounds worth more than $100 million.

Brian Matesic, a principal at Norwest Venture Partners, attributes the increase in investment to the sector’s return to dealmaking.

“M&A started this,” Matesic said.

Indeed, notable deals at the end of last year included AbbVie’s $10.1 billion acquisition of ImmunoGen and its $8.7 billion acquisition of Cerevel Therapeutics; Roche’s $7.1 billion purchase of Telavant; and Bristol Myers Squibb’s $14 billion purchase of Karuna Technologies.

Jakob Dupont, an executive partner at Soffinova Investments, agrees with Matesic: “We’ve been bolstered by all the mergers and acquisitions activity with Big Pharma investing more in the sector.”

With many large firms facing significant patent cliffs in coming years, pressure has mounted to rebuild pipelines through M&A — searching for the next blockbuster asset.

Similarly, new technologies, de-risked clinical trial data, and a clearer path to FDA approval also helped on the IPO front, says Matesic.

Analysts at HSBC believe 2023’s tepid fundraising environment even helped to set the stage for the current resurgence. The firm’s 2024 Venture Healthcare report notes that lackluster financing activity may have perversely driven a jump in innovation.

"In 2023, technology and business-model disruption led to an ideal environment for real innovation, and we noted that sector-leading companies had significant funding rounds, which we think will continue in 2024,” said Lead Author and Managing Director Jonathan Norris.

Norris also writes that investors are more interested in later-stage deals than new startups.

“The trend of large first-financing deals will continue, likely marked by the re-emergence of “hub and spoke” deals designed to control cost and generate unique M&A opportunities. However, first-financing deals are anticipated to continue trailing overall investment, as investors maintain a restrained deal pace and expand interest towards later-stage deals at reduced valuations.”

And, while conditions change, market participants have remained largely static versus years prior. In the first quarter, the most active investors were OrbiMed, Arch Venture Partners, GV, RA Capital Management, and Cormorant Asset Management, according to data from William Blair.

• Salesforce is in talks to acquire Informatica, a data management and integration solutions provider trading at a market value above $10 billion.

• Platinum Equity is preparing to sell Urbaser, a Spain-headquartered global environmental services company, at a valuation of around $6.4 billion.

• CJ CheilJedang, a South Korean food company, is considering a sale of its feed and livestock unit, CJ Feed&Care, that could be worth around $2 billion, per Bloomberg.

• Resideo Technologies (NYSE: REZI) has agreed to acquire Snap One Holdings Corp. (Nasdaq: SNPO), a provider of smart living products, for around $1.4 billion, with Clayton Dubilier & Rice providing $500 million of convertible preferred equity financing.

• TA Associates is preparing to sell Orisha, a French developer of AI-based software for the industrial sector that could fetch north of $1.1 billion.

• Amtech Systems, a Peak Rock Capital portfolio company, acquired Label Traxx, a provider of management software solutions for the label printing industry.

• Akamai Technologies (Nasdaq: AKAM) is in advanced talks to acquire Noname Security, an API protection cybersecurity startup, for around $500 million.

• StubHub may be preparing for an IPO as early as this summer, with a potential valuation of around $16.5 billion, per The Information.

• OMERS is considering an IPO for Kenan Advantage Group, a tank truck transporter and logistics provider, that may raise around $400 million, per Bloomberg.

Tech, Vertical SaaS, & Misc. Enterprise

• Ecotrak, a provider of intelligent facility management software, raised $30 million in new funding led by Respida Capital, with participation from Carver Road Capital and Gala Capital Partners.

• Onum, a data observability and orchestration platform, raised $28 million in Series A funding. Dawn Capital led, with participation from Kibo Ventures and Insight Partners.

• Lawhive, an online legal platform merging AI and a regulated law firm, raised £9.5 million in seed funding led by GV, with participation from Episode 1 Ventures.

• HumanX, a developer of an AI strategy forum, raised $6.125 million in seed funding from Primary Venture Partners, Foundation Capital, Andreessen Horowitz, and FPV Ventures.

Fintech

• Akad Seguros, a Brazilian digital insurance company, raised $22.5 million in Series A funding. Valor Capital Group led, with participation from Across, Endeavor Scale-Up Ventures, Endeavor Catalyst, and Actyus.

Media & Consumer 

• Carro, a Singapore-based full-service online car marketplace, is in talks to raise around $100 million ahead of an anticipated IPO, per CEO Aaron Tan.

• ShareChat, an Indian social networking service, raised $48.8 million in convertible funding from Lightspeed, Temasek, Alkeon, X, Snap, and Tencent.

• Avalon, a multiplayer online game studio, raised $10 million in new funding from BitKraft Ventures, Hashed, Coinbase Ventures, Spartan Capital, Foresight Ventures, LiquidX, and Momentum6.

Industrials, Greentech, & Other

• Kode Labs, a smart building engineering and management company, raised $30 million in Series B funding led by Maverix Private Equity, with participation from TELUS Ventures and I Squared Capital.

• CleanFiber, a developer of cellulose insulation products made from recycled cardboard, raised $28 million in Series B funding. Spring Lane Capital led, with participation from Climate Innovation Capital, AXA IM Alts, Tokyu Construction/Global Brain, and Ahlström Invest.

• Andreessen Horowitz raised $7.2 billion for its latest funds.

• AlleyCorp raised $250 million for its latest early-stage fund.

1. The Swedish kingmakers behind European private equity giant EQT.

• How the Wallenberg family helped turn EQT Partners into a colossus of the buyout industry. — Financial Times

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