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• A look at the first quarter fundraising readout

First quarter not the fundraising rebound some had hoped for

By Bob Clair

Private equity fund closings fell sharply in the first three months of 2024—down 37 percent from the same period last year—according to a new report by Preqin. In total, there were just 150 completed fundraisings in the first quarter.

Though the number of newly raised funds has fallen, overall capital raised was comparatively stable, declining 6 percent year-over-year $166.8 billion. These stats seem to support much of the anecdotal evidence this year from fund managers and allocators who have seen a strong market preference for larger, more established firms at the expense of smaller upstarts without a lengthy track record.

Of the closed funds, 60 percent, or 90, were North American. Europe raised 45, while the Asia Pacific region raised 11.

Heading into the second half, Preqin analysts see room to run for APAC-based firms, noting that the region’s outlook “remains resilient for private equity as China buyout transactions were up in the fourth quarter of 2023, private equity deals surged at year-end, and Chinese exits are also on the rise.”

Exit activity in the first quarter was also down from the fourth quarter of 2023, with 358 exits compared to 452—on an aggregate basis, transaction value of $54.2 billion was down 57 percent from the prior quarter.

• Red Lobster filed for Chapter 11 bankruptcy protection and entered into a stalking horse purchase agreement with existing term lenders.

• Abu Dhabi National Oil Company (ADNOC) acquired an 11.7 percent stake in NextDecade Corp.'s Rio Grande LNG export project from Global Infrastructure Partners, ADNOC's first major investment in the U.S.

• EQT Group is in talks to acquire Keywords Studios (AIM: KWS), a provider of creative and tech-enabled services to gaming studios and entertainment clients, for around £2 billion, per Bloomberg.

• Thoma Bravo is exploring the sale of Instructure, an education software provider, and has hired JPMorgan Chase to advise on the potential $3 billion exit, per Reuters.

• CyberArk (Nasdaq: CYBR) agreed to acquire Venafi, a machine identity management provider, from Thoma Bravo for around $1.54 billion.

• Quadrant Private Equity is considering the sale of Darrell Lea, an Australian chocolate and licorice manufacturer, which could be worth up to A$1 billion, per Bloomberg.

• Telefonica and H.I.G. Capital are among the suitors weighing bids for Avatel Telecom, a Spanish fiber-optic network operator, in a potential deal that could value the company at up to €700 million.

• Alicorn Venture Partners agreed to acquire Glassbox (TASE: GLBX), a provider of AI-fueled customer intelligence solutions in which Alicorn held an existing stake, for around $150 million.

• Superior Environmental Solutions, backed by Palladium Equity Partners, acquired Arrowhead Environmental Services, a nonhazardous solid waste management provider.

• Juniper Landscaping, a portfolio company of Bregal Partners, acquired Davis Landscaping.

• Kinderhook Industries invested in Apex Waste Solutions, a Colorado-based regional solid waste collector.

• Hard Rock Hotels & Casinos is considering a bid for Star Entertainment (ASX: SGR), an Australian casino operator, per the Australian Financial Review.

• Randstad NV (AMS: RAND) acquired Torc, a talent marketplace with backing from Recognize and Asymmetric Capital Partners.

• Encore Consumer Capital acquired Chalet Desserts, a Sacramento-based manufacturer of frozen bakery desserts.

• Rapport Therapeutics, a biotech developing precision CNS-focused therapeutics, filed for a Nasdaq IPO; existing backers include Johnson & Johnson, Arch Venture Partners, Cormorant Asset Management, Third Rock Ventures, Perceptive Advisors, Sofinnova, and Surveyor Capital.

Tech, Vertical SaaS, & Misc. Enterprise

• Codesphere, a cloud-based application programming platform, raised $18 million in seed funding from Creandum, with participation from LEA Partners, Begin Capital, 42CAP, and 468.

• Overland AI, a developer of AI software for autonomous defense vehicle control, raised $10 million in seed funding led by Point72 Ventures, with participation from Shasta Ventures, Ascend VC, Explorer’s Edge, Voyager Capital, and Cubit Capital.

Fintech

• Kudos, developer of an AI-powered smart wallet, raised $10.2 million in Series A funding led by QED Investors, with participation from Patron, Samsung Next, SV Angel, Precursor Ventures, The Mini Fund, Newtype Ventures, and the Four Cities Fund.

• Teal, a provider of embedded accounting solutions for SaaS companies, raised $8 million in seed funding led by Torch Capital, with participation from General Advance, Dash Fund, and Basis Set Ventures.

Healthcare

• R3 Vascular, a developer of bioresorbable medical devices for peripheral arterial disease, raised $87 million in Series B funding led by Deerfield Management, with participation from 415 Capital.

• Oxford Endovascular, a medtech focused on origami-inspired treatments for brain aneurysms, raised £8 million in Series A+ funding led by Parkwalk Advisors, with participation from Norcliffe Capital, Oxford University, Oxford Science Enterprises, and Vulpes Investment Management.

Industrials, Greentech, & Other

• Bedrock Materials, a developer of sodium-ion battery materials, raised $9 million in seed funding. Trucks Venture Capital, Refactor Capital, and Version One Ventures co-led, with participation from Hanover Technology Investment Management, SpaceCadet Ventures, Brainstorm Capital, Evergreen Climate Innovations, Expansion VC, Climate Capital, Quest Venture Partners, Meliorate Partners, Valia Ventures, and Ritual Capital.

• RedBird Capital Partners raised $3.9 billion for its fourth flagship fund, plus an additional $1.4 billion for its latest RedBird IMI fund.

• Kedaara Capital raised $1.7 billion for its fourth buyout fund.

• Valar Ventures raised $300 million for its ninth early-stage fund.

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