PitchBook News - Pandemic disrupts a boom time for VC

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The Daily Pitch: VC

April 14, 2020

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Today's Top Stories

Pandemic set to disrupt a boom time for US venture capital

The past two years were record-setting ones in the US venture ecosystem, with deal count and deal value both climbing to new heights. The good times continued during the early months of 2020. But now, in a world transformed by the coronavirus, startups and VCs are entering a period of transition.

The Q1 2020 PitchBook-NVCA Venture Monitor, produced in partnership with Silicon Valley Bank and Carta, dives into all the potential fallout for a VC industry that's yet to feel the full effects of COVID-19. A few key takeaways:

A recent surge in early-stage deals should subside, with startups focusing on managing burn rates and extending cash runways
Valuations haven't shifted yet, but down rounds will likely become more common in the coming quarters
A growing focus on the healthcare sector is driving more and more VC interest in life sciences startups

read the report

More coronavirus news: Continuing coverage from PitchBook

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Coronavirus piles onto SoftBank's losses

SoftBank expects a 1.8 trillion yen (about $16.7 billion) hit to its Vision Fund portfolio of tech companies for the fiscal year ended March 31.

In a forecast of financial results, the Japanese conglomerate blamed the "deteriorating market environment" for the recent drop in the valuations of its portfolio companies. Global lockdown measures have dealt a blow to the transportation and logistics industry, which represents the majority of the Vision Fund's investments and includes ridesharing companies like Uber, Didi Chuxing and Grab. SoftBank-backed companies in the real estate and consumer sectors, including hotel chain Oyo and brokerages Opendoor and Compass, have all had recent reports of layoffs and curtailed operations in response to the pandemic.

In addition to the Vision Fund write-down, SoftBank also anticipates an 800 billion yen loss from WeWork and satellite internet company OneWeb, the latter of which recently filed for Chapter 11 bankruptcy protection.

Related read: Why SoftBank is parceling off its most prized possession

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A message from DFIN

The virtual data room is changing

The evolution of the virtual data room from an electronic filing cabinet to a content service platform continues. The future of the VDR will be shaped by combined advanced artificial intelligence and machine learning algorithms with cybersecurity and regtech tools.

"The most exciting part about the future of VDRs is that they aren't just about storing and sharing documents," said Donna Garabo, vice president of Venue product management. "They're about providing a full range of content services and insights into that content to empower decision-makers to act confidently and accelerate the deal process."

Download the white paper to learn more about the future of the virtual data room and the dealmaking landscape driving it.

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How the changing restaurant industry has shaped investors' appetite for food and robotics

(Courtesy of Picnic)

The intersection of robotics and food is at a critical juncture. VC investment in the space boomed in the past two years, and in a recession, automation could help keep food-service operations afloat.

Our financial writer Eliza Haverstock explored the space for this multimedia story, originally featured in the Q1 Private Market PlayBook, and now updated with a video about robots and the future of foodtech:

Recommended Reads

If troubles continue at hotel startup Oyo, founder Ritesh Agarwal and SoftBank's Masayoshi Son could both face personal financial losses because of a highly unusual $2 billion deal. [Bloomberg]

Lagoons filled with milk? Ditches full of onions? The closures of restaurants and much of the rest of the economy is creating surreal times for farmers across the US. [The New York Times]

A second global economic crisis in less than 15 years could be the catastrophic event that turns millennials into the new Lost Generation. [The Atlantic]

A group of scientists at MIT is building a new device to hack your dreams. [OneZero]

Since yesterday, the PitchBook Platform added:

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Today's Headlines


	The Daily Benchmark
	2002 Vintage Global PE Funds
	People
	Bessemer elevates Tomer Diari to VP
	VC Deals
	Kargo picks up $31M
	Portfolio Companies
	Quibi sees 1.7 million+ downloads in first week
	Fundraising
	Entrée Capital wraps $100M fund

The Daily Benchmark

2002 Vintage Global PE Funds

Median IRR

17.01%

Top Quartile IRR Hurdle Rate

26.78%

1.8x

Median TVPI

Select top performers

Lime Rock Partners II

OCM Opportunities Fund IVb

Charterhouse Capital Partners VII

*IRR: net of fees

35 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

Webinar: Sourcing deals and targeting new opportunities during the pandemic

Deal activity is undoubtedly going to slow as the coronavirus outbreak continues—but that doesn't mean PE firms or investment banks can't capitalize on depressed asset prices.

Join us for a discussion of how to source deals outside traditional channels, rebuild deal and investor pipelines, and identify new opportunities for both investors and those in need of liquidity.

The webinar will be held on Wednesday at 12 p.m. ET/9 a.m. PT. If you're unable to attend live, register to receive a recording afterward.

Sign up now

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People

Bessemer elevates Tomer Diari to VP

Bessemer Venture Partners has promoted Tomer Diari from investor to vice president. Diari will continue to invest in sectors including fintech and healthcare. Prior to joining the firm's investment team in Israel in 2016, he worked at the Israel Defense Force. Diari currently serves as a board observer for identity management platform developer Auth0 and cybersecurity business Axonius, among other companies.

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VC Deals

Kargo picks up $31M

Jakarta-based Kargo Technologies has reportedly raised a $31 million Series A led by Tenaya Capital, with participation from investors including Sequoia India and Intudo Ventures. Co-founded in 2018 by Tiger Fang, a former general manager at Uber, Kargo is the developer of a supply chain platform designed to track and manage freight shipments across Indonesia.

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Portfolio Companies

Quibi sees 1.7 million+ downloads in first week

Mobile streaming startup Quibi's app was downloaded more than 1.7 million times in the week following its launch, CEO Meg Whitman told CNBC. The downloads haven't led to much in-app spending, according to Apptopia, although that's to be expected given the 90-day free trial Quibi is offering. The Los Angeles-based startup raised $1.75 billion in pre-launch venture funding from investors including Disney, NBCUniversal and Viacom.

View details

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Fundraising

Entrée Capital wraps $100M fund

Entrée Capital has closed its third seed-focused fund on $100 million, according to Globes. Founded in 2004 and located in London, Israel and San Francisco, the firm has backed fintech unicorn Stripe, Israeli startup Monday.com and Postmates, the operator of an on-demand food delivery service.

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View 94 investments »