PitchBook News - SoftBank OKs enormous asset sale

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The Daily Pitch: VC

March 24, 2020

Like our newsletter? The data comes from the PitchBook Platform — our data software for VC, PE and M&A

Today's Top Stories

Changing FDA rules leave startups in limbo over at-home COVID-19 tests

(Andrew Theodorakis/Getty Images)

A string of biotech startups began developing mail-order, at-home coronavirus sample collection kits this month, assuming they were in line with guidance from the Food and Drug Administration. Then, on Saturday, the agency explicitly banned use of the kits.

As a result of the regulatory change, mailed sample collection no longer appears a viable solution to the nation's testing lag:

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SoftBank approves sale of up to $41B in assets

SoftBank is considering offloading up to $15 billion worth of shares in Alibaba. (David Becker/Getty Images News)

The board of SoftBank has signed off on a plan to sell up to 4.5 trillion yen (around $41 billion) in assets over the next four quarters. As much as 2 trillion yen of that money would go toward repurchasing its own stock, which SoftBank believes is significantly undervalued, and the remainder would be used for debt redemptions, bond buybacks and to increase cash reserves. Shares of SoftBank (TKO: 9984) rose more than 18% on Monday following the news.

To achieve those ends, the company is considering offloading $12 billion to $15 billion worth of shares in Alibaba, according to Bloomberg. The rest could reportedly come from selling part of its telecom branch, SoftBank Corp., or a portion of its stake in Sprint following its planned merger with T-Mobile.

Activist investor Elliott Management has been pushing for the Japanese conglomerate to buy back up to $20 billion in shares to restore investor confidence, according to reports. SoftBank is also looking to shore up its credit rating, which is currently below investment grade. A separate stock repurchase plan of 500 billion yen was unveiled earlier this month.

Despite the sale, SoftBank is still buying. The company is lined up to be the lead investor on a $300 million round for Didi Chuxing's autonomous driving unit, according to The Information.

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A message from InCloudCounsel

Webinar: PE Industry Brief

Join PitchBook senior analyst Garrett Black and InCloudCounsel founder and CEO Troy Pospisil for a webinar featuring the latest quarterly data on the competitive state of the private equity industry and what firms can start doing today to gain an edge.

Register here for Thursday's webinar to learn about the latest trends and data for the private equity industry.

Garrett and Troy will provide a brief on the private equity industry with exclusive datasets provided by PitchBook. They'll also review the current landscape in the context of the ongoing COVID-19 pandemic. Investment firms need to develop a differentiated business strategy in order to stand out in an overly competitive market. Once a unique investment strategy is identified, execution and focus are critical; this can be achieved by outsourcing non-core tasks, such as routine legal processes.

The webinar will take place on Thursday, March 26, at 1 p.m. ET/10 a.m. PT. There's a limited number of spots, so register today. If you're unable to attend, we'll send you a recording.

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The future of automotive lidar

Venture investment in automotive lidar, a key technology in self-driving cars, totaled a record $1.3 billion in 2019. Over the course of the next decade, our analysts think it could bloom into a $30 billion industry.

Our latest Emerging Technology Research note highlights recent venture activity in automotive lidar and our outlook for what's next in the space. A few other key points and takeaways:

New lidar technologies are helping solve critical adoption hurdles
Tesla continues to shun lidar in favor of other systems
The coronavirus pandemic is already having short-term effects

read it now

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Recommended Reads

One Westerner's account of life filled with masks, fears, deliveries and children during 45 days on lockdown in China. [The New Yorker]

How not to be a jerk while using grocery delivery services during a pandemic. [Recode]

The coronavirus outbreak is changing everything. Including how people deal with death. [OneZero]

More than 30 public thinkers weigh in on what the long-term impacts of the coronavirus might be on tech, government, the economy and much more. [Politico]

Since yesterday, the PitchBook Platform added:

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Today's Headlines


	The Daily Benchmark
	2016 Vintage Global PE Funds between $250M and $500M
	VC Deals
	Flying taxi startup Lilium lands $240M+
	iCapital raises $146M
	UK-based car marketplace startup raises new funding
	Portfolio Companies
	Compass lays off 375 employees
	Exits
	The New York Times picks up VC-backed Audm

The Daily Benchmark

2016 Vintage Global PE Funds between $250M and $500M

Median IRR

12.05%

Top Quartile IRR Hurdle Rate

27.94%

1.22x

Median TVPI

Select top performers

Gemspring Capital Fund I

Ufenau V German Asset Light

DW Healthcare Partners II

*IRR: net of fees

26 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

VC Deals

Flying taxi startup Lilium lands $240M+

Lilium has raised more than $240 million in a round led by Tencent, with support from existing investors. The deal reportedly values the German company at between $750 million and $1 billion. The funds will be used to prepare for the large-scale production of Lilium's five-seat jet, which it plans to use to start a regional air service as early as 2025.

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iCapital raises $146M

iCapital Network, the New York-based creator of a fintech platform for alternative investments, has raised a $146 million round led by China's Ping An Global Voyager Fund. Existing investors including BlackRock and Blackstone also participated in the round, as did new backers such as Goldman Sachs and Hamilton Lane.

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UK-based car marketplace startup raises new funding

Cazoo, a London-based provider of an online used-car marketplace, has raised £100 million (around $115 million) in a round led by DMG Ventures, according to reports. General Catalyst, CNP, Mubadala Capital, Octopus Ventures, Eight Roads Ventures and Stride.VC reportedly also provided funding for the round. Cazoo was valued at £180.4 million in September 2019, according to PitchBook data.

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Portfolio Companies

Compass lays off 375 employees

Real estate tech startup Compass has laid off 15% of its staff, or around 375 employees, according to Business Insider. The New York-based company raised $500 million last summer in a SoftBank-led round at a $6.4 billion valuation, according to PitchBook data. The move comes amid fears that a sharp economic slowdown will soon hit real estate. Other names in the space such as Redfin, Opendoor, OfferPad and Zillow have been curbing costs by suspending "iBuyer" home-flipping programs.

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Exits

The New York Times picks up VC-backed Audm

The New York Times Company has acquired Audm, the provider of a subscription-based platform that provides audio narrations of longform journalism from publications including The Atlantic, ProPublica and Vanity Fair. Founded in 2016, Audm graduated from Y Combinator in 2017 and has received prior funding from investors including Hack VC, Switch Ventures and Precursor Ventures.

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Chart of the Day

"Breaking down financial services activity by subsector, insurance accounted for the bulk of M&A value when stripping out the outlier Worldpay transaction, accounting for €23.6 billion in closed transactions in 2019. This represents a 25.5% rise from the industry's 10-year deal value average."

Source: PitchBook's 2019 Annual European M&A Report