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Facing disaster, corporate VC to undergo key stress test
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| Salesforce is one of the most active corporate venture capital investors. (Eduardo Hueck/Getty Images) |
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After driving much of the venture capital market's hyper-growth in recent years, corporations are poised for a decisive test of their zeal for funding startups.
- Inside boardrooms of every stripe, countless investment decisions are either being postponed or subjected to fresh scrutiny. Companies are suddenly on guard as they struggle to take the measure of an unfolding economic disaster.
- Because corporations, notably SoftBank, played a pivotal role in private fundraising recently, their willingness to stick to their VC strategies in this downturn could shape the pool of capital that will be available in the long run.
- "In that hunker-down scenario, all spending goes through a rigorous review, obviously," said Pradeep Tagare, head of the $250 million corporate venture fund at UK-based energy company National Grid. "One of the first things that gets hit is the venture capital part of it because that's an easy thing to step back on."
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White House changes course on tests, adding to confusion for startups
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| White House coronavirus task force leader Deborah Birx speaks at a briefing Monday. (Drew Angerer/Getty Images) |
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Contradicting the Food and Drug Administration's recently updated guidance, the White House said coronavirus tests that consumers would do at home will be available this week.
- Officials didn't reveal which companies' tests would be used.
- "There was a breakthrough today, and I think we'll see that from the FDA, for all of those who are waiting for self-swabbing options, those are going to be available sometime this week," White House coronavirus task force leader Deborah Birx said in a briefing on Monday night.
- On Saturday, the FDA had explicitly barred companies from offering mail-order self-swabbing kits for processing in commercial labs, increasing the scope of a previous directive that only blocked in-home tests. As a result, a series of biotech startups were forced to abandon their COVID-19 product plans. Some of these companies, including Carbon Health, Everlywell and Nurx, had sold or were on the verge of selling their at-cost kits.
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A message from Insight2Profit
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Pricing in a volatile market
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| Mike Brenner | Director |
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We are in the uncharted waters of a global pandemic and macroeconomic uncertainty. In this environment, how should businesses adjust their strategies to best address the unpredictable market? Are price cuts—or price increases—warranted to protect growth and margins?
Read more |
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Travel startups struck by wave of layoffs
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TripActions, Sonder and Zeus Living have reportedly laid off hundreds of employees as restrictions resulting from the COVID-19 outbreak batter the travel industry.
Andreessen Horowitz-backed TripActions let go of 350 staff members, Business Insider reported. The corporate travel management startup reportedly had 1,100 employees as of February. It raised a $250 million Series D last July at a $4 billion valuation, according to PitchBook data.
Hospitality startup Sonder laid off a third of its staff, or more than 400 employees, according to The Information. The company, which operates a network of short-term accommodation rentals, was valued at $1.1 billion last May, according to PitchBook data. Its investors include Spark Capital, Greylock Partners and Valor Equity Partners.
Zeus Living shed 30% of its staff, or nearly 80 employees, according to Business Insider. The company rents furnished properties on a monthly basis to business travelers. Airbnb, Initialized Capital Management and Comcast Ventures have backed Zeus Living. |
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2019 a strong year for emerging supply chain technology
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The rise of the digital economy is putting new pressure on the traditional global supply chain. Businesses are demanding better visibility across delivery and supply channels, quicker shipping capabilities and the ability to source products on-demand to reflect real-time conditions at the consumer level. We view this as a compelling backdrop for new entrants seeking to address gaps in the status quo and see areas of growth across the value chain.
Our most recent Emerging Tech Research: Supply Chain Tech report covers this and more, with key trends including:
- Supply chain tech raised $10.4 billion in VC in 2019, an uptick from 2018
- Freight tech and delivery applications drove deal activity in 2019
- The coronavirus pandemic has highlighted the need for emerging technologies that can mitigate the risk of future supply chain shocks
If you have any questions or feedback about the research, we'd love to hear from you: analystresearch@pitchbook.com. |
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Venture in times of recession
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Cities and states are locking down. Businesses are closing for the foreseeable future. It now seems clear COVID-19 has ushered in the next economic crisis.
While the catalyst is very different this time around, comparing the current climate with that of the financial crisis in 2008 could be a useful way to envision how the venture industry will be impacted.
Our analyst note covering VC during the Great Recession uses bankruptcy rates, time between rounds and other metrics to review how firms and startups weathered the past crisis—and could give a glimpse of what the current situation has in store: |
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One night on the streets with Lenin Cerón, one of the delivery men making sure the Big Apple stays fed. [The New Yorker]
In some ways, a low-tech website called ProMED is a relic of an earlier internet age. That hasn't stopped it from developing an impressive track record of crowdsourcing epidemics. [Wired]
The leaders of companies like Slack, Google and Cisco weigh in on the strange realities of taking their business dealings from the boardroom to a spare room. [The New York Times]
A society where you don't leave the house and almost every meaningful social interaction takes place online? The members of Gen Z have been preparing for quarantine their whole lives. [The Atlantic] |
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Since yesterday, the PitchBook Platform added:
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16
VC valuations
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1430
People
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493
Companies
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9
Funds
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2017 Vintage Global PE Funds
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Webinar: How coronavirus is affecting the private markets
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Join PitchBook analysts as they walk through their recent reporting on COVID-19 and its impact on the private markets. Our director of research & analysis, Nizar Tarhuni, will join analysts James Gelfer, Dylan Cox and Paul Condra as they discuss what's in store for PE and VC firms in the wake of recent market volatility and the impending economic slowdown.
The webinar will be held today at 12 p.m. ET/9 a.m. PT. Topics of discussion will include:
- Historical performance and fundraising data from previous downturns
- How this bear market differs from 2008 and other years
- How emerging technologies are poised to weather the pandemic
Register for the webinar to attend live or receive a recording afterward. |
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SoftBank held buyout talks with Elliott, Mubadala
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Obvious adds ex-Slack exec
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Nature's Fynd harvests $80M Series B
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Iaso Biotherapeutics picks up $60M
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| Iaso Biotherapeutics has raised a $60 million Series B led by GL Ventures, a VC fund focusing on early-stage companies in healthcare and other industries that was launched by PE giant Hillhouse Capital. Founded in 2017 and based in China, Iaso is a developer of cell therapies for patients suffering from cancer; it plans to use the funding in part to advance clinical trials of its products in China and the US. |
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M12 leads $22M round for Arkose Labs
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| Arkose Labs, the developer of a cybersecurity platform intended to detect suspicious traffic and prevent fraud, has raised $22 million in a Series B led by M12. Existing investors PayPal and USVP participated in the funding. Based out of San Francisco, Arkose Labs' customers include GitHub, Roblox and Twilio. |
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Brex snaps up a trio of startups
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| Fintech startup Brex has announced three new acquisitions: security startup Neji, video company Compose Labs and Landria, which makes knowledge databases for businesses. Brex offers a corporate credit card backed by a tech-heavy underwriting process. It raised $100 million last June at a valuation of $2.6 billion, according to PitchBook data. |
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Collaborative Fund eyes $500M
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| Collaborative Fund, a New York-based firm that traditionally makes venture investments, has set a $500 million target for its first growth fund, according to an SEC filing. The firm backs startups in the fintech, healthcare and consumer services sectors, as well as tech companies focused on child development and urban development. |
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"Automotive lidar is a key driver of VC investment in the mobility and transportation industry. In 2019, investors deployed a record $1.3 billion in the space, up from $623 million the previous year. Standout deals in 2019 include the $170 million Series C round by Innoviz Technologies and the $230 million acquisition of Blackmore by Aurora Innovation. Though not included in this dataset, Hesai's $173 million Series C in January 2020 and Cepton Technologies' $50 million Series C in February 2020 are promising signs for the industry going forward."
Source: PitchBook analyst note on the future of automotive lidar |
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