[17] Alta Views: your latest scoop of Private Capital Markets

Hi Alta-natives! In this edition, we will look at the continuous rise of AI investments, private equity dry powder reaching record levels and why the co-living & co-working space is garnering investor interest.?

LPs more inclined to choose liquidity today over holding out for incremental gains

• Private equity investors have ample incentive to get moving after four quarters of relative inactivity, said Bain & Company recently.
• With the clock ticking on a record US$3.7 trillion in dry powder and buyout funds sitting on US$2.8 trillion of unexited assets, limited partners (LPs) are feeling a liquidity crunch, according to the firm’s Private Equity Midyear Report 2023 based on a recent survey.
• The survey revealed that most LPs are more inclined to choose liquidity today rather than hold out for incremental gains.

The AI Arms Race Continues

• VCs remain active in AI investments in 2023, with 1,497 deals completed, valued at US$22.7B, a 43% deal value growth QoQ, according to Pitchbook’s Q1 2023 Artificial Intelligence & Machine Learning Report.?
• The continued buzz in the space is evidenced by the most recent announcement by Elon Musk, where he intends to enter the fray of the AI battle for supremacy with his latest venture, xAI, which would leverage his positions in Twitter and Tesla
• The new AI startup, xAI, will employ the usage of Twitter’s database for training its artificial intelligence systems while capitalising on Tesla on the “silicon front” and on the “AI software front”, bringing a new player into the space, warranting investors to continue monitoring developments on this end.?

Private equity dry powder hits record US$2.49 trillion

• Global private equity (PE) firms are sitting on a record US$2.49 trillion in dry powder as at 3 July, data released by S&P Global Market Intelligence and Preqin on Thursday (Jul 20) indicated.
• “Sluggish” dealmaking in 2023 has presented limited opportunities for PE firms to deploy funds into buyouts and other investments, S&P Global said in its report.
• In the year to 3 July, global PE dry powder – which refers to capital from investors that has not yet been deployed – was up 11.1 per cent.
• A greater level of regulatory scrutiny for private equity deals, especially in the US, is also among the obstacles.

Offering Optimism, Initial Public Offerings in H2 2023

• SEA acted as a bright spot in 2023 H1, seeing 85 IPOs raising US$3.3B compared to 73 IPOs raising US$3.1B in the same period last year, marking a 16% and 5% increase in IPOs and proceeds. This contrasted the lackluster global IPO scene that saw a slowdown where there was 5% and 36% less IPOs and proceeds respectively globally?
• However, the IPO market looks ready again come September, as rate hikes are expected to end while volatility has reached its lowest levels since 2020, paired with Goldman Sachs’ IPO issuance barometer exhibiting its highest since March 2022
• Major names on the waitlist include chipmaker Arm Holdings and marketing automation firm Klaviyo, while Cava Group, a Mediterranean restaurant group has already made the leap of faith and entered the markets to be rewarded with a 2x in valuation since IPO at one point, providing optimism surrounding liquidity events in the coming H2 for investors?

More millennials, Gen Zs in S’pore are into investing

• Young investors under the age of 30 are emerging as a force in markets as technology widens access to financial information for them and a proliferation of investing apps makes investing more accessible.
• Unlike older investors, they tend to seek investment information on their own from online sources and have shorter investment spans, among other observations.
• A CFA Institute study, which looked at Gen Zs, millennials and Gen Xers in the United States, Canada, Britain and China, found that Gen Z individuals are reshaping investment practices and products.

A Space Warranting Investor Interest, Co-living & Co-working

• Co-living is set to stay as a way to beat high rents and costs of ownership while catering to the demands of the expected increase in global workforce mobility.
• In the same vein, co-working is set to cement itself as well, given how short term leases work well for startups concerned about their funding sustainability while larger enterprises are pivoting to hub and spoke models to suit their increasingly dispersed workforces??
• As such, demand is set to grow as indicated by CBRE, where 68%% of companies expect some usage of coworking spaces by 2024 compared to 53% in 2022.
• With it, the industry is projected to expand to US$24B by 2030 from 2023’s expected US$9.3B, a more than twofold increase that investors can look forward to.

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?Canva, SwipeRx, Bibit, gupshup, Rainforest discover who’s trending with our investor network! Researched by experts, voted by insiders. View our Top Picks here!

?? Notable Fundraises

Telexistence | US$170M | Series B | Robotics

Telexistence is a developer of robotic technologies. The company's online remote-control robotics technology acts to transmits, accumulates, and analyzes visual and auditory to tactile information, enabling users to act freely in remote environments and helping to extend the presence of human beings.

Thunes | US$72M | Series C | FinTech

Thunes runs a cross-border payment network designed for a seamless transfer of funds between payment systems. The platform offers remittance processing, mass payouts, virtual accounts, and business payment technology through APIs with lower fees, enabling wallet providers, technology companies, PSPs, money transfer operators, and banks to make financial services more accessible globally.

Caddi | US$83.11M | Series C | Business Productivity

Caddi offers an order management platform designed for the manufacturing industry to track industrial products. The platform connects orders of custom-made processed products and processing plants which automatically identify the optimum factory and supply by using an automatic estimation system based on a proprietary? algorithm, enabling businesses to reduce costs and improve efficiency.

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About Alta Views

A fortnightly collection of the latest news from Private Capital Markets. Put together by Alta’s team of analysts, we bring you the most critical and timely pieces from private markets, to help you navigate the broad horizon. Stay tuned as we bring you the most notable fundraises, analysis on industries and companies trending within investor networks, the latest headlines, and more!

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