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

• A look at private capital’s hunt for space deals

• The deal sheet, plus an interview with CalSTRS CIO Christopher Ailman

Private equity, venture capital set sights on space

By Bob Clair

Private capital is having its own space race moment, with firms piling into investments in both the industry’s hottest startups and more mature companies.

Private markets firms invested $12.5 billion into space companies in 2023, a 30 percent jump from the prior year, according to Space Capital, a venture capital firm that exclusively targets the space industry.

Chad Anderson, founder of Space Capital and author of a book entitled The Space Economy, sees this trend continuing to accelerate through 2024.

“Ambitious plans for direct-to-cellular SatCom (satellite communications) expansion, AI integration, increased government funding, and a growing appetite for investment” make 2024 promising, Anderson notes. He acknowledges, however, that even last year’s activity fell well short of the $15.3 billion invested in 2021.

One major difference, however, is that most of the money invested in 2023 did not come from billionaire founders—Elon Musk at SpaceX, Jeff Bezos at Blue Origin, and Richard Branson at Virgin Galactic. Instead, capital came primarily from traditional institutional investors.

Within private equity, AE Industrial Partners and Arlington Capital Partners have been among the most active in the space. Both firms have invested heavily in federal defense and aerospace contractors, and have now applied a similar strategy to space-focused targets.

AE, in particular, completed a series of acquisitions to form its Redwire Space platform, a provider of specialized infrastructure and hardware manufacturing services that sells into companies working to scale their own space operations. Between the Redwire formation and subsequent add-ons, AE has completed more than 10 space-related deals since 2020.

Involvement in space isn’t limited to smaller tuck-ins. On the larger end of the market, Advent International and British Columbia Investment Management Corp. acquired Maxar Technologies for $6.4 billion in December 2022, providing an out for a business hit hard by rate hikes after heavy debt financing in years prior.

Venture has been similarly active. Last year, early-stage space funding totaled more than $4 billion, and activity hasn’t slowed—last week, flashy in-space manufacturing startup Varda Space Industries raised $90 million in new funding from Caffeinated Capital, Lux Capital, General Catalyst, Founders Fund, and Khosla Ventures.

For investors, the allure of lucrative long-term government contracts has made the industry a particularly attractive target. While political risk and shifting government priorities can be a source of concern, the funding outlook remains positive, experts say.

Some of that positivity is based on the U.S. government’s current focus on private-sector innovation, preferring to support commercial-led efforts over internal research.

The most recent evidence of this shift is the U.S. Department of Defense’s Innovation Unit, which received $945 million of new funding written into the defense spending bill passed by Congress on March 21—four times its appropriation in the year prior—in part to help identify commercial technologies with military applications.

Including both public and private spend, the $546 billion space economy is expected to grow more than 40 percent by 2027, according to Kelli Ogborn, vice president of space commerce and entrepreneurship for the nonprofit Space Foundation. Attractive market tailwinds for portfolio companies with space exposure.

• Tyto Athene, an Arlington Capital Partners portfolio company, acquired Microtel, a software development and systems engineering firm focused on space missions for NASA and international space programs.

• Italgas has approached 2i Rete Gas, Italy’s second-largest gas distributor, with a €4 - 5 billion takeover offer.

• Blackstone is in talks to partner with chairman Reinold Geiger on his potential buyout of L'Occitane International SA, the French cosmetics business.

• One Hotels & Resorts acquired the 35 percent stake it didn't already own in Motel One, a European budget design hotel chain, from Proprium Capital Partners at a €4.1 billion valuation.

• EQT acquired a majority stake in Universidad Europea, a private university in Spain, from Permira for €2 billion.

• ProSiebenSat.1 Media is preparing to sell Verivox, a price comparison platform, and Flaconi, a German online beauty products retailer, at a combined value of around €800 million.

• Ansell has agreed to acquire Kimberly-Clark's PPE business for $640 million.

• HSBC Holdings Plc (LSE: HSBA) agreed to sell its Argentine business to Grupo Financiero Galicia, Argentina's largest private financial group, for $550 million.

• Experian has agreed to acquire Illion, an Australian credit reporting provider, from Archer Capital for A$820 million.

• Merck acquired Abceutics, a biotech focused on Antibody-Drug Conjugates for targeted cancer therapy, for $208 million.

• Madison Dearborn is in talks to acquire APM, an Asia-Pacific employment services provider.

• Five Arrows agreed to acquire Rimes Technologies, an enterprise data management provider, from EQT.

• Alcanza Clinical Research, a site network platform backed by Martis Capital, has acquired Innovation Medical Research Center.

• Archimed acquired Cellese, a developer of regenerative skincare products.

• Behrman Capital acquired Vista Apex, a manufacturer of dental and endodontic products, from Inverness Graham Investments and Avante Capital Partners.

• Esprit, a lifestyle fashion retailer, is reportedly in talks to sell a controlling stake in its European business to an undisclosed private equity suitor, per the WSJ.

• Factor89 Group acquired Master Magnetics, a provider of magnetic tools and equipment.

• HarbourView Equity Partners invested in Mucho Mas Media, a Latinx-focused media business.

• Osceola Capital acquired Trauma Services, a provider of biohazard cleanup and remediation services.

• Wiz acquired Gem Security, a cloud detection and response startup.

• Blue Owl agreed to acquire Prima Capital Advisors, a real estate debt provider.

• Alpine Investors has launched Guardian Restoration Partners, a new home restoration platform, through the acquisition of DryLux Restoration, Dry Kings, and Midwest Restoration.

• Apotex, backed by SK Capital Partners, has acquired Searchlight Pharma, a Canadian specialty pharmaceutical firm.

• Crest Rock Partners invested in Relocity, a relocation services provider.

• EMH Partners has made a minority investment in Stonebranch, a provider of workload automation solutions.

• Luxium Solutions, a photonics solutions provider owned by Edgewater Capital Partners and SK Capital Partners, has agreed to acquire Inrad Optics, a manufacturer of optical components, for $19 million.

• KPS Capital Partners acquired a majority stake in Sport Group, a Germany-based manufacturer of artificial turf fields, from Equistone.

• Centuri Holdings, a provider of utilities infrastructure services, set terms on its IPO that would imply a $1.7 billion fully diluted market cap if it were to price in the middle of the range.

• Ibotta, a mobile-first consumer cash back app, set terms on its IPO that would imply a $2.8 billion fully diluted market cap if it were to price in the middle of the range.

Tech, Vertical SaaS, & Misc. Enterprise

• Guesty, a provider of property management solutions for short-term rentals, raised $130 million in Series F funding at a $930 million valuation. KKR led, with participation from Inovia Capital and existing backers Apax, MSD Partners, and Sixth Street.

• Collaborative Robotics, a developer of mobile collaborative systems for the workplace, raised $100 million in Series B funding. General Catalyst led, and was joined by Bison Ventures, Lux Capital, and Industry Ventures, among others, including Sequoia Capital, Khosla Ventures, and Mayo Clinic.

• Symbolica, a developer of generative AI foundation models, raised $33 million in new funding led by Khosla Ventures, with participation from Day One Ventures, General Catalyst, Abstract Ventures, and Buckley Ventures.

• Basemark, a Helsinki-based developer of automotive AR software, raised €22 million in Series B funding led by ETF Partners, with participation from Finnish Industry Investment (Tesi), Constructor Capital, Business Finland, and the European Innovation Council.

• Sprinto, an automated risk and compliance platform, raised $20 million in Series B funding led by Accel, with participation from existing investors Elevation Capital and Blume Ventures.

• StrikeReady, a developer of artificial intelligence-powered security management solutions, raised $12 million in Series A funding. 33N Ventures led, with participation from Hitachi Ventures, Monta Vista Capital.

• Alethea, a disinformation detection and mitigation technology provider, raised $20 million in Series B funding. GV led, with participation from Ballistic Ventures, Hakluyt Capital, and Ballistic Ventures.

• Leasecake, a provider of lease and location management solutions for multi-unit operators, raised $10 million in Series A extension funding. PeakSpan Capital led, with participation from Las Olas Venture Capital.

Fintech

• Monad Labs, a developer of Ethereum-compatible L1 blockchains, raised $225 million in new funding funding led by Paradigm, with participation from Electric Capital, Greenoaks, and Castle Island.

• Honey, a smart home insurtech startup, raised $108 million in Series A funding. Gallatin Point Capital led, with participation from Our Innovation Fund, Hyperplane, Deciens Capital, and Industry Ventures.

• Mezo, a permissionless Bitcoin economic layer, raised $21 million from Pantera Capital, with participation from Multicoin, Hack VC, Parafi Capital, Nascent, Draper Associates, Primitive Ventures, and Asymmetric Ventures.

• Ellipsis Labs, a developer of DeFi protocols supporting cryptocurrency transactions, raised $20 million in Series A funding from Paradigm and Electric Capital.

• Summer, a workplace student loan solution providing end-to-end solutions, raised $9 million from Rebalance Capital, SemperVirens, and existing backers General Catalyst, QED, Flourish Ventures, Partnership Fund for NYC, Fenway Summer, and Gaingels.

• Smartpay, a Japanese embedded finance platform, raised $7 million in pre-Series A funding. SMBC Venture Capital led, with participation from Angel Bridge, Global Founders Capital, and Matrix Partners.

• Simply Credit, a data-driven supplier payments platform, raised $9.5 million in Series A funding. SemperVirens led, with participation from Silversmith Capital Partners.

Media & Consumer

• Dude Perfect, a group of content creators, raised around $100 million in new funding led by Highmount Capital.

• TransferGo, a digital remittances and multi-currency borderless finance provider, raised $10 million in growth funding from Taiwania Capital.

• Spines, an AI-enabled publishing platform, raised $6.5 million from Aleph, M-Fund, LionTree.

Healthcare 

• Grow Therapy, a mental health technology company, raised $88 million in Series C funding. Sequoia Capital led, with support from Goldman Sachs Alternatives, and PLUS Capital.

• Cariloop, a developer of employer-sponsored digital caregiver support solutions, raised $20 million. ABS Capital led, with participation from Noro-Moseley Partners, KCRise, Revolution’s Rise of the Rest, and Patterson Thoma Family Office.

• Reshape Biotech, a scientific R&D automation technology provider, raised $20 million in Series A funding. Astanor Ventures led, with participation from Y Combinator, R7, Acme, and 21stBio.

Industrials, Greentech, & Other

• HysetCo, a developer and operator of hydrogen fueling stations and mobility solutions, raised €200 million in new funding from Hy24, Eiffel Investment Group, and Raise Impact.

• Platform Science, a fleet management and supply chain logistics startup, raised $125 million in new funding led by 8VC, NewRoad Capital, and Prologis Ventures, with participation from Activant Capital, BDT & MSD Partners, and Manhattan Venture Partners.

• Proxima Fusion, a developer of clean energy fusion technology, raised €20 million in seed funding. Redalpine led, with participation from Bayern Kapital, DeepTech & Climate Fonds, and Max Planck Foundation.

• Bambrew, a plastic-free and sustainable packaging company, raised $7.2 million in Series A funding from Blume Ventures, Blue Ashva Capital, Capital-A, and Mumbai Angels.

• Y Combinator has raised $1.68 billion to date as part of its simultaneous fundraising process for three new vehicles.

• NewSpring Capital is raising up to $400 million for its latest growth fund.

• AlleyCorp raised $250 million for its latest venture fund.

• Asymmetric is targeting $125 million for its latest venture fund.

1. How institutional investors can gain a performance edge.

• An interview with Christopher Ailman, chief investment officer of the California State Teachers’ Retirement Fund. — McKinsey

Interested in partnering with Transacted? If you’re a brand looking to connect with an engaged financial audience, we’re here for it. Please reach out. 

Got a tip or an idea for a story? Email [email protected], or Tweet/DM @transactedInc