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| The Daily Pitch: Europe |
| Your edge on global private capital markets |
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| While ecommerce has its AI valuation premiums, VCs are reigning in |
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By Eric Bellomo, Senior Emerging Technology Analyst
While AI-native ecommerce SaaS startups still command a valuation premium over their more traditional peers, it's narrowed from 2024 to 2025, according to a new PitchBook analyst note.
The shrinking gap suggests greater underwriting discipline, with investors scrutinizing efficiency gains and margin expansion more carefully.
These startups got a valuation premium of 22% in 2025, with an average valuation of $82 million, down from an 86% premium in 2024. The size of the premium varied this year: +44% at seed, +31% at early stage and +25% for late stage.
A similar analysis of AI premiums in fintech showed much larger premiums in the early stage, and smaller ones at seed and late-stage, suggesting that while AI disruptors in ecommerce are relatively nascent by comparison, they're still expected to be key distribution levers for generative AI, consistent with previous platform shifts.
Since 2021, more than one-third of all ecommerce venture funding has flowed to AI-enabled platforms. These companies raised larger funding rounds to support engineering talent, model integration and compute costs. The cohort has raised $4.6 billion across 185 deals so far this year, nearly half of the overall ecommerce deal value.
Zooming in: Startups focused on pre-purchase categories like search, personalization and AR, XR and 3D visualization lead in AI adoption with 45% of all deals. These asset-light categories are understandably more appealing to cautious investors than fulfillment, returns and the like. |
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But it's not all smooth sailing. Across venture capital, sub-$5 million deals are dwindling, leaving nascent ecommerce vendors more vulnerable to fundraising challenges than larger, established companies. Still, marquee AI companies' foray into ecommerce is benefitting the rest of the sector.
Although few of these AI-native ecommerce companies are robustly trading on the secondary markets, those that are have an average discount of 15% to their last disclosed valuation. An average 11% discount on a larger basket of SaaS companies suggests that ecommerce's price softness is contained. |
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• Cybersecurity IPOs have been rare, but the thawing of the IPO market has CEOs reassessing. These 9 cybersecurity startups bear watching. See the list
• The gaming market scored $1 billion in VC funding in Q3, up more than 10% quarter-over-quarter, as overall dealmaking continued to slide. Read the report
• VC investment in the cybersecurity industry hit a multiyear low in Q3 amid shifting enterprise security priorities. Access the analysis |
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| 5 largest first-time PE funds of 2025 show specialists are winning |
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| (Josie Doan/PitchBook News) |
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By Rod James, Sr. Private Equity Editor
Fundraising for emerging private equity managers continued to wane in 2025, buffeted by investors' ongoing cash constraints and the general migration of capital toward the largest managers. Still, some new managers, armed with strong investment backgrounds, closed funds with very specific strategies.
First-time PE funds in North America collected $7.2 billion of commitments in the year through Dec. 12, 36% below the $11.3 billion raised last year, according to PitchBook data.
Europe presented a more positive picture. First-time funds across the pond raised €4.2 billion ($5 billion) over the same period, 23% up on 2024 and roughly on track with levels seen in 2022 and 2023.
We've put together a roundup of the five largest, first-time commingled PE funds to close in 2025. They provide proof that a distinct strategy and strong management pedigree can still lead to successful fundraising. |
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Smart reads that caught our eye.
• One in three EVs on the planet have a battery from this Chinese factory. Yet CATL could face hurdles due to geopolitical factors that discourage the company from manufacturing abroad. [Bloomberg]
• Is AI already pushing America's electric grids to their limit? As the capacity of US energy infrastructure comes under question, Exelon CEO Calvin Butler says "the warning lights are on." [Fortune]
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| The Daily Benchmark: 2016 Vintage Global PE Funds |
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