VC’s paper gains look wild | PitchBook News Summary

1. Key Themes

Theme 1: VC returns rebound is a valuation mirage, not a liquidity recovery

Venture fund performance made a dramatic leap in benchmark data, but PitchBook's own analysts caution this is not a sign of health returning to the asset class.

"The 1-year IRR for VC funds rocketed from 3.8% in 2024 to 16.4% in 2025."
"Unfortunately, the VC industry's recovery is all about AI valuation growth and doesn't mean liquidity has returned to the asset class, our analysts argue."
By contrast, "Secondaries declined the most, falling from 8.4% to 4.3% YoY" — suggesting exits and DPI aren't following markups.

Theme 2: Distressed SaaS is becoming acquisition bait

The Miro/Bending Spoons deal validates a thesis PitchBook had already flagged: former high-flying SaaS companies with depressed valuations are ripe for consolidation.

"Bending Spoons just bought Miro—and we called it. The collaborative work platform, whose equity value dropped from $17.5 billion to $1.79 billion with the deal, topped our recent list of former SaaS darlings that could be scooped up in an acquisition."
Confirmed deal terms: "Bending Spoons agreed to acquire Iconiq Capital-backed Miro, the developer of an enterprise workflow collaboration platform, in a $1.36 billion deal."

Theme 3: Mega-rounds are concentrated in AI infrastructure, defense, and physical/frontier tech

Capital continues to flow disproportionately into large, capital-intensive deals rather than traditional SaaS.

The Boring Company: "secured a $3 billion Series D led by the UAE at a $23 billion valuation."
Positron AI: "raised an $875 million Series C ... The funding values the company at $5 billion."
Mach Industries: "raised an additional $600 million as part of its Series C ... The financing values the company at $3.7 billion."
Motive: "raised $1.3 billion in growth financing from General Catalyst's Customer Value Fund."

Theme 4: AI wealth is already reshaping real-world consumer markets

Paper gains from AI are translating into real spending behavior, particularly in real estate.

"Around 30% of San Francisco home purchases were all-cash between April and June, as newly minted AI millionaires went on a spending spree." [WSJ]

2. Contrarian Perspectives

"Improved" VC fund performance is arguably a red flag, not good news PitchBook's own framing pushes back against the headline-grabbing IRR jump: rather than treating the leap from bottom-to-top of the performance rankings as validation of VC as an asset class, they argue it's a symptom of narrow AI-driven markups without corresponding liquidity or distributions. The declining secondaries return (8.4% to 4.3%) is cited as evidence that the market isn't functioning normally beneath the surface — investors marking up paper gains while actual cash realization worsens.

Former "SaaS darlings" are now takeover targets, not compounding growth stories The dominant venture narrative of the 2010s/2020s — SaaS companies as durable, high-multiple compounders — is being inverted. PitchBook's prediction that companies like Miro would be acquisition targets (rather than IPO candidates or continued independent growth stories) suggests a structural re-rating of the SaaS category, validated by an equity value collapse from $17.5B to $1.79B before being bought out.

3. Companies Identified

Miro — Collaborative work/whiteboarding SaaS platform

Why mentioned: Case study in SaaS de-rating and PE-style rollup acquisitions; PitchBook had predicted this outcome.
Quote: "whose equity value dropped from $17.5 billion to $1.79 billion with the deal, topped our recent list of former SaaS darlings that could be scooped up in an acquisition."

Bending Spoons — Italian tech/app acquisition company

Why mentioned: Acquirer of Miro, exemplifying opportunistic buying of distressed former SaaS darlings.
Quote: "Bending Spoons agreed to acquire Iconiq Capital-backed Miro ... in a $1.36 billion deal."

The Boring Company — Elon Musk's tunnel excavation company

Why mentioned: One of the largest VC deals in the update, showing sovereign wealth appetite for infrastructure/frontier tech.
Quote: "secured a $3 billion Series D led by the UAE at a $23 billion valuation."

Positron AI — AI semiconductor hardware startup (Reno, NV)

Why mentioned: Notable mega-round reflecting continued capital intensity in AI infrastructure/chips.
Quote: "raised an $875 million Series C led by NEA, Atreides Management, Valor Equity Partners, Andra Capital, SemiAnalysis Capital and Jim Clark. The funding values the company at $5 billion."

Mach Industries — Defense tech, autonomous aerial vehicles

Why mentioned: Large raise in the defense tech vertical.
Quote: "raised an additional $600 million as part of its Series C funding ... valuing the company at $3.7 billion."

Motive — Physical operations platform developer

Why mentioned: Large growth round from General Catalyst's newer investment vehicle.
Quote: "raised $1.3 billion in growth financing from General Catalyst's Customer Value Fund."

Lyric — Healthcare payments/insurance claims processing platform

Why mentioned: Potential large exit under consideration by TPG.
Quote: "could be valued at about $5 billion in a deal, Reuters reported."

Stratolaunch — Hypersonic air vehicle developer (Cerberus-backed)

Why mentioned: Prepping a notable frontier-tech IPO.
Quote: "is preparing for a US IPO that could raise about $500 million, Bloomberg reported."

4. People Identified

James Thorne — Senior Managing Editor, PitchBook

Why mentioned: Author of the VC fund performance/benchmarks story.

Jordan Rubio — Senior Data Visualizations Editor, PitchBook

Why mentioned: Author of the university rankings/female founders analysis.

Carina Spitzkopf — Head of direct lending DACH and Nordics, Partners Group

Why mentioned: Named as leader of Partners Group's new Stockholm office.
Quote: "Partners Group opened a new office in Stockholm, which will be led by Carina Spitzkopf."

5. Operating Insights

Founders in distressed but strategically valuable SaaS categories should watch for acquisition interest rather than assume continued independent scaling — the Miro pattern (steep valuation decline followed by strategic acquisition) may recur across other "SaaS darlings" PitchBook has flagged, meaning operators/boards should be prepared for M&A conversations even amid down rounds.
University choice is a founder-network optimization lever, especially for female founders — "attending a university with a strong network of venture-backed founders is a wise strategy to improve the odds of success," with specific institutions (Delhi University, Peking University, University of Sydney, Tufts, University of Chicago, Georgetown) disproportionately overperforming in producing female founders relative to their general founder output — useful for recruiting, advising, or targeting talent pipelines.
Capital is flowing toward capital-intensive, infrastructure-heavy categories (energy, chips, defense, hypersonics) at massive valuations — entrepreneurs building in these spaces are seeing outsized checks (Boring Company, Positron AI, Mach Industries all >$500M-$3B raises), suggesting investor appetite has shifted from software-first bets toward physical/frontier tech with sovereign and strategic capital participation (e.g., UAE backing Boring Company).

6. Overlooked Insights

Sovereign wealth is directly consolidating portfolio companies — Saudi Arabia's PIF considering merging Electronic Arts and Savvy Games signals sovereign funds acting as active industrial consolidators, not just passive LPs: "Saudi Arabia's Public Investment Fund is considering a merger of two of its game development portfolio companies, Electronic Arts and Savvy Games."
Private debt returns are quietly outperforming on a risk-adjusted basis — the Private Debt Barometer shows "a moderately above-average return environment, with a reported-return nowcast of 3.1% and a desmoothed nowcast of 3.5%," driven by "strong momentum in small-cap and value equities, declining implied volatility, and low financial stress" — a signal that private credit may be a relatively under-discussed bright spot compared to the AI-driven VC narrative.