Venture capitalists looked at dwindling M&A activity in Q2 and said, "Hold our fleece vests."

Driving the news: Global VC disbursements decreased by a greater percentage between April and June than did global M&A, with $87.4 billion representing a 42.8% year-over-year decline, per data released this morning by PitchBook.

• The number of deals was off 38.7%, signaling a slight increase in average deal size.
• U.S. deals took a particular hit. Not only were they down 48% year-over-year, but also down 13.1% from Q1 2023, whereas global deal volume climbed 1% quarter-over-quarter.

Between the lines: The shrinkage isn't surprising, despite some mega-deals for generative AI startups.

• Liquidity remains difficult to come by, and the Nasdaq rebound has been largely driven by a handful of Big Tech companies that are being handcuffed by antitrust regulators from making new acquisitions.

Look ahead: The bull case would be that lingering recession fears dissipate and that that IPO momentum builds into a frenzy by Halloween.

• The bear case would be that VCs continue to spend an inordinate amount of time triaging existing portfolio companies, crossover investor "tourists" continue to stay away and that everyone remembers the current volume is still quite high by pre-pandemic standards.

Bluesky, a Twitter rival whose directors include Jack Dorsey, raised $8 million in seed funding led by Neo.

Why it's the BFD: Everyone seems eager to topple Twitter, particularly as the app changes under Elon Musk's ownership, although no one has yet figured out how to eat into its network effects.

• Meta yesterday launched its own Twitter clone, called Threads, which somehow manages to be both slick and clunky. Kind of like the new TweetDeck.

The bottom line: "The decentralized social network protocol Bluesky has been developing is an alternative to ActivityPub — the protocol powering yet another decentralized Twitter rival, Mastodon, and soon, Meta's Threads." — Sarah Perez, TechCrunch

• EGYM, a Munich-based connected fitness company, raised $225m in Series F funding. Affinity Partners led, and was joined by insiders Mayfair Equity Partners and Bayern Kapital. https://axios.link/44xphGt

• Telexistence, a Japanese robotics startup focused on the retail and logistics sectors, raised $170m in Series B funding from SoftBank, Airbus Ventures, Globis Capital Partners, Monoful Partners and KDDI Open Innovation Fund. https://axios.link/44eBOic

• Clair, a New York-based advance payment fintech for frontline and gig workers, raised $25m new equity funding (plus $150m in debt). Thrive Capitalled, and was joined by Upfront Ventures and Kairos. https://axios.link/3O2nEew

• Tandem, a British challenger bank, raised £20m from Quilam Capital. https://axios.link/3pAOfpC

• Abound, an Indian cash-back and rewards app, raised $10m from the Times Group. https://axios.link/4372O1W

• Numarics, a Swiss provider of automated accounting and administration software for SMEs, raised €10.2m in seed funding. UBS Next led, and was joined by FiveT Fintech and insiders Wingman Ventures and Seed X. www.numarics.com

🌎 WasteFuel, a Pacific Palisades, Calif.-based startup that seeks to convert agricultural and municipal waste into bio-methanol, raised $10m in Series B funding. BP Ventures led, and was joined by A.P. Moller Maersk and i(x) Net Zero. https://axios.link/3JKsD0S

• Moove, a Ghanian fintech for “mobility entrepreneurs,” raised $8m from Absa CIB. www.moove.io

• AlloyX, a DeFi protocol project, raised $2m in pre-seed funding led by Hack VC. https://axios.link/3PHKpWg

• PeerStreet, an El Segundo, Calif.-based real estate debt investing platform, filed for Chapter 11 bankruptcy protection. The company had raised more than $100m from firms like Andreessen Horowitz, Felicis Ventures, Colchis Capital Management, Guggenheim Partners, World Innovation Lab and Thomvest Ventures. https://axios.link/3XDAYcs

GTCR made it official this morning, saying it will buy a 55% stake in Worldpay from Fidelity Information Services (NYSE: FIS) at an $18.5b enterprise value. GTCR also committed $1.25b in additional financing for acquisitions, and said that former Worldpay executive chairman and CEO Charles Drucker will return as CEO.

• GTCR co-CEO Collin Roche tells me that any acquisitions will likely be focused on product, plus perhaps a bit of added geographic coverage. "A lot of time you see smaller businesses with innovative products but not the scale to exploit it; we have scale."
• FIS previously signaled plans to spin off Worldpay via an IPO, but GTCR has no short-term plans to bring its new portfolio company public.
• Perhaps the most surprising piece of this deal is that GTCR found bank financing, with Roche saying the firm employed a "fairly conversative cap structure" with leverage in the "low to mid 4's on EBITDA."

⚡ ABP and OMERS Infrastructure agreed to acquire Dutch electrical equipment provider Kenter from Alliander Corporate Ventures for US$764m. https://axios.link/3XCEYdi

⚡ ArcLight Capital Partners agreed to buy Duke Energy’s (NYSE: DUK) commercial distributed generation business for $364m. https://axios.link/3NBMlx3

🚑 CEA, a Reston, Va.-based portfolio company of The Riverside Company, acquired LiV, a Montreal-based provider of medical education services. www.clinicaleducationalliance.com

🚑 Elevate Patient Solutions, a Spring, Texas-based portfolio company of Edgewater Funds, acquired Revenue Masters, a Fort Myers, Fla.-based provider of revenue cycle management SaaS. www.elevatepfs.com

• Gauge Capital acquired Loving Tan, a Brisbane, Calif.-based sunless tanning products brand. www.lovingtan.com

🎵 HarbourView Equity Partners agreed to acquire select catalog assets of Nelly for around $50m, per TMZ. https://axios.link/43in6p8

• Man Group (LSE: EMG) is paying $183m to acquire a control stake in Varagon Capital Partners, a mid-market private credit firm with $11.8b in AUM. https://axios.link/44gdJaU

• Monroe Capital completed its acquisition of venture debt lender Horizon Technology Finance Management. www.monroecap.com

• CAB Payments, a British money transfer firm, raised £335m in a London IPO. https://axios.link/3JIe5yM

• MC Group, the Middle East’s largest broadcasting company, is prepping investor meetings for its Riyadh IPO, per Bloomberg. https://axios.link/3XFLa4e

🚑 ResMed (NYSE: RMD) acquired Somnoware, a Sunnyvale, Calif.-based provider of sleep and respiratory care diagnostics software that had raised $15m from firms like TransLink Capital, World Innovation Lab and Global Health Impact Fund. https://axios.link/3CYUVAW

🚑 Thermo Fisher Scientific (NYSE: TMO) agreed to buy CorEvitas, a Waltham, Mass.-based biopharma data provider, from Audax Group. No financial terms were disclosed, but Bloomberg previously reported around a $b price-tag. www.corevitas.com

• Avenue Z, a Miami-based digital marketing firm, agreed to acquire PR agency Bevel. https://axios.link/46yRFtz

⚡ Honeywell (Nasdaq: HON) sold its interests in South Carolina’s Savannah River Nuclear Solutions joint venture to Fluor (NYE: FLR) and Huntington Ingalls (NYSE: HII). https://axios.link/4491FrS

• SVB Financial Group received U.S. bankruptcy court approval to sell SVB Securities to the investment banking group's management team, led by CEO Jeff Leerink and backed by Seth Klarman's The Baupost Group. https://axios.link/3CXJaed

🚑 Teva Pharmaceutical Industries (Tel Aviv: TEVA) is considering options for its active ingredients unit, including a possible $2b sale, per Bloomberg. https://axios.link/3O2C7Hk

• Insight Partners raised $118m for its second VC fund-of-funds led by underrepresented managers. https://axios.link/44y7dfu

• Notion, a London-based VC firm, raised €300m for its fifth fund. https://axios.link/3pDbAqK

• The Raine Group raised $760m for its fourth growth equity fund. www.raine.com

• Newbury Partners, a PE secondaries firm recently acquired by Bridge Investment Group, is raising $2.5b for its sixth flagship fund, per an SEC filing. https://axios.link/3CZy2gC

• Root Capital, a Brazilian private credit firm, is raising $400m for a fund to invest in distressed assets, per Bloomberg. https://axios.link/3rf8xFN

• Thayer Street raised $275m for its third lower midmarket PE fund. www.thayerstreet.com

• President Biden nominated Virginia Solicitor General Andrew Ferguson and Utah Solicitor General Melissa Holyoak to fill empty Republican spots at the Federal Trade Commission. https://axios.link/43bTKcc

• Anne Marie Fleurbaaij joined Makena Capital Management as a managing director and co-head of marketable investments. She previously was with University of Cambridge Investments. www.makenacap.com

• Richard Hurowitz, founder and CEO of boutique investment bank Octavian & Co., joined Rothschild & Co. as a senior advisor. www.rothschildandco.com

• Laura Simione joined fintech-focused VC firm Nyca Partners as as head of capital formation and investor relations. She previously was with Bramshill Investments. www.nyca.com

• Josh Maio is joining Jefferies as a managing director of gaming and lodging banking, per Bloomberg. He previously was with SMBC Nikko Securities America. https://axios.link/3JNAZom

• Krishna Skandakumar is joining law firm Goodwin Procter as a partner focused on GP stakes transactions, per the WSJ. He previously was with Akin Gump. https://axios.link/3XHTEIg

Bored Ape sale prices keep falling, 16 months after creator Yuga Labs raised $450 million in seed funding at a $4 billion valuation.

• The company's future now may be more about virtual worlds than about Bored Ape NFT mints, putting lots of pressure on its upcoming launch of the Otherside virtual world for which Yuga Labs sold $320 million of deeds last year.
• New Yuga Labs CEO Daniel Alegre (ex-Activision Blizzard) tells Axios' Brady Dale that the firm erred in making fans wait too long to reveal what it was working on, but added: "We have this grand vision of what we will execute with Otherside that was set out in the early days of Yuga."

The bottom line: There continues to be a major value divergence between NFTs and crypto, with the former sagging and Bitcoin up 85% year-to-date.