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| The Daily Pitch |
| PE, VC and M&A |
| Your edge on global private capital markets |
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| Good morning. In today's Daily Pitch, we look at what the US government reopening means for IPOs, AI's impact on drug discovery, and our interactive Global League Tables for Q3—ranking the top investors, advisers and more across the private markets. |
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| Kim Kardashian's shapewear brand Skims to go all in on brick-and-mortar |
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By Rosie Bradbury, Senior Venture Capital Reporter
Skims, the undergarments giant and brainchild of TV personality Kim Kardashian, said it wants to become a "predominantly physical business," signaling a massive departure from the brand's direct-to-consumer roots.
Skims isn't the first high-flying DTC brand to expand into physical stores despite originating as an online-only retailer. Companies like Warby Parker, AllBirds and Glossier eventually migrated to brick-and-mortar—but not all with the same business success. |
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Skims raised $225 million at an upsized $5 billion valuation led by Goldman Sachs' Alternatives, it said Wednesday.
Skims expects to pass $1 billion in net sales in 2025. In comparison, eyeglasses company Warby Parker has estimated it will bring in between $871 million and $874 million in net revenue in 2025.
Skims is among a cohort of celebrity brands including Rihanna's Fenty Beauty and Hailey Bieber's Rhode, recently acquired by E.L.F. Beauty for $1 billion, whose popularity has been exploding.
In February, Skims announced a partnership with Nike's stores. Skims currently has 18 retail locations across the US and two franchised outlets in Mexico, as well as some lines sold at Nike, Saks Fifth Avenue and other department stores.
In a challenging time for ecommerce, Skims has stood out. Two weeks ago, underwear brand Parade, backed by consumer growth equity firm Stripes, announced it was shutting down. Parade's marketing strategy was similar to Skims, emphasizing social media and products that catered to a diverse and youthful clientele.
The divergent path of the two undergarment brands reflects how uncertain even seemingly rock-solid business strategies can be. Many VCs have responded by retreating from the segment altogether: Ecommerce VC deals have declined markedly in the past three years.
Looking at other DTC companies, Warby Parker opened its first brick-and-mortar store in 2013 and now operates around 900 retail locations. Its popularity may offer a model for Skims: Like eyeglasses, undergarments are a product that many consumers may want to try on in person.
Meanwhile, beauty company Glossier opened its first location in 2018, but eventually shifted its strategy to also sell its products through retailers like Sephora.
As for sustainable athletic footwear maker Allbirds, the company has closed several store locations since last year to focus on online sales amid business challenges. |
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| 2026 predictions: What’s next for private capital |
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Private capital firms are entering their most challenging environment in over a decade. IPO windows remain unpredictable, M&A activity is selective, and valuation pressures are extending holding periods. Meanwhile, LPs continue to demand liquidity and transparency amid constrained fundraising cycles.
Join leaders from Northwestern Mutual and Armira for Affinity’s 2026 Private Capital Predictions webinar as they discuss the market forces shaping the next year—and how top firms are adapting to stay ahead.
Key topics include:
- Market outlook: IPOs, M&A, valuations, and LP expectations
- Winning proprietary deals when founder relationships drive access
- Supporting portfolio companies through extended timelines
- Turning AI into a competitive advantage across sourcing and operations
Register today |
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• The US government shutdown may have ended—but the damage to the IPO environment has been done. Find out more
• Just out: Our Q3 valuations data for public companies in the foodtech sector. Get our analysts' report today
• Many investors are holding back as France endures one of its longest periods of political turmoil, but the maturity of the country's private markets is lessening the impact. Read more |
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| VCs bet on AI drug discovery transforming biopharma |
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By Ben Riccio, Associate Analyst
In 2025, AI-native biotech startups commanded a 45% valuation premium over traditional biopharma, according to new PitchBook research. Leading drug development upstarts Xaira Therapeutics, Isomorphic Labs and Generate: Biomedicines have emerged as some of the most well-funded in the sector—surpassing $1 billion valuations within their first two funding rounds.
Investors are betting on the promise of AI to transform the traditionally high-risk and capital-intensive nature of drug development. Startups in this space have raised $2.7 billion across 101 venture deals in 2025. |
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New tools are improving the discovery process—identify promising drug candidates digitally rather than through labor intensive lab experimentation. Meanwhile, emerging AI models in biology, like DeepMind's AlphaFold, have demonstrated strong predictive capabilities in protein structure and genomics.
Frontier applications are now moving to "virtual cells" that can simulate the effects of drugs before entering clinical trials. These advances promise to compress development timelines and de-risk drug discovery, though significant challenges remain in the quantity and quality of training data. Lila Sciences' $235 million Series A reflects investor conviction in this emerging sector and the value of pairing AI development with large-scale biological data generation.
Big pharma is betting on AI biotech startups as well, inking multibillion-dollar partnerships with companies like Manifold Bio and Algen Bio.
Despite these early achievements, AI's ultimate impact on biotech will depend on how it improves clinical success. With multiple AI-discovered drugs now in trials and more expected in the coming years, the technology is approaching a crucial period of validation—one that could reshape the economics of early-stage biopharma. |
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Smart reads that caught our eye.
• Last pennies roll out. The final batch of pennies was produced at the Philadelphia Mint on Wednesday, but the coin will still be legal to use despite its manufacturing being discontinued. [Bloomberg]
• Meet Land O'Lakes' AI tool for farmers. As farmers in America face pressure related to tariffs and labor, the crops insight division at one of the country's biggest companies is piloting a solution.[Fortune]
• OpenAI's running costs might be even higher than anyone realizes. A look at how OpenAI uses Azure, Microsoft's web-hosting platform, and what those costs say about the company's other spending | | | | | | | |
