Fortune could favor fintech in a pandemic

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PitchBook

The Daily Pitch: VC

May 15, 2020

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Today's Top Stories

Why the long-term forecast for fintech remains positive

The current downturn will have varying near-term impacts for different fintech segments, but the long-term expectations broadly favor the entire industry. Our latest installment of Emerging Tech Research explores these trends and analyzes the factors shaping the future of fintech. Highlights include:

Fintech companies in North America and Europe raised $6 billion in VC in Q1 2020, roughly flat year-over-year, with more than 75% of that capital going to late-stage companies

Transactional businesses, such as payments companies, will be negatively affected by decreased consumer activity, but market volatility will benefit companies focused on trading

Companies with heavier financial assets, such as lending and digital wealth advisers, may face challenges amid increased defaults

If you have any questions or feedback about the research, we'd love to hear from you: analystresearch@pitchbook.com.

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More coronavirus news: Continuing coverage from PitchBook

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GM's Cruise lays off 8% of staff

General Motors-owned self-driving car company Cruise is letting go of around 8% of its nearly 2,000-person workforce, according to Bloomberg.

The layoffs did not affect core engineering teams, and the company plans to continue hiring new talent, the report said. Last May, Cruise secured a $1.15 billion investment at a valuation of $19 billion, and reportedly had plans to double its workforce by the end of 2019.

News of the layoffs comes just days after rival Waymo extended a recent funding round to $3 billion.

In January, Cruise unveiled its driverless taxi, the Origin, but has not yet launched a real-world taxi program. Coronavirus lockdowns resulted in many self-driving programs being suspended, although some have since resumed.

Since being acquired by GM in 2016, Cruise has received substantial investments from SoftBank, Honda and T. Rowe Price.

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Weekly VC Recap

In case you missed it:

• Uber submitted an offer to acquire Grubhub in what could be a sign of consolidation to come in the food delivery sector.

• In other Uber news, the ridehailing giant led a $170 million round for Lime, valuing the electric scooter company at a reported $510 million.

• Women have long lagged behind men when it comes to raising VC, and the pandemic is making it even more challenging. We spoke to several female founders about the hurdles they face—and the strategy that may help in an economic slump.

(Shannon Fagan/Getty Images)

• As a need for delivery services increases along with the pandemic, Target is in talks to purchase tech assets from VC-backed Deliv.

• Edtech startup Quizlet became a unicorn this week with a new round of funding led by General Atlantic.

• Autonomous driving company Waymo extended its first outside funding round by $750 million.

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Ask PitchBook

Wondering how the pandemic is affecting your segment of the private markets? Looking for an explanation of which companies will benefit from government relief programs? Curious about what's driving a recent trend you've noticed?

Send us an email at ask@pitchbook.com, and the news team will track down the answers you're seeking.

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Recommended Reads

A look at some of the startups working to combat isolation and loneliness amid the coronavirus crisis. [CNBC]

Some hedge funds and VC firms are placing bets on companies developing treatments for COVID-19. But others fear the potential profits won't be enough to make such investments worthwhile. [The Wall Street Journal]

These days, family dynasties aren't a common part of the US business landscape. The heirs of Henry Ford are an exception. [Bloomberg]

Since yesterday, the PitchBook Platform added:

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Quick Takes


	The Daily Benchmark
	2015 Vintage Global Real Assets Funds
	VC Deals
	Homeward hauls in $105M
	DigitalOcean rises to $1B+ valuation
	Anyfin scores $30.6M Series B
	Immunai launches with $20M
	Clear Labs secures $18M
	Exits
	Microsoft lines up networking takeover
	Apple buys virtual reality startup NextVR
	Fundraising
	Blackstone brings in $4.2B for life sciences vehicle
	Cathay Capital brings in $1.4B across two new funds

The Daily Benchmark

2015 Vintage Global Real Assets Funds

Median IRR

12.64%

Top Quartile IRR Hurdle Rate

16.00%

1.29x

Median TVPI

Select top performers

Abacus Multi-Family Partners III

Activum SG Iberia Fund I

Cortland Partners Fund II

*IRR: net of fees

109 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

VC Deals

Homeward hauls in $105M

Home-buying startup Homeward has raised $20 million in growth equity and another $85 million in debt. Adams Street Partners led the equity funding for the Austin-based business, with participation from Javelin Venture Partners and LiveOak Venture Partners. The funding will go in part toward purchasing more homes for the company's platform, which allows clients to buy homes with Homeward's money and then pay the company back after selling their previous residence.

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DigitalOcean rises to $1B+ valuation

DigitalOcean has raised $50 million at a $1.15 billion valuation in a round led by Access Industries, with participation from Andreessen Horowitz. Founded in 2012 and based in New York, DigitalOcean offers a cloud-hosting and app-management platform.

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Anyfin scores $30.6M Series B

EQT Ventures has led an investment of 300 million Swedish kronor (around $30.6 million) in Anyfin. Based in Stockholm and operating in Sweden and Finland, the fintech startup's platform uses AI to help consumers refinance their existing loans.

Additional Investors:

Accel, Global Founders Capital, Northzone Ventures

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Immunai launches with $20M

Biotech startup Immunai has launched out of stealth mode with $20 million in seed funding. The round was led by Viola Ventures and TLV Partners. Founded in 2018 and based in New York, the company uses machine learning to spot and treat diseases by mapping immune cell functions.

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Clear Labs secures $18M

Biotech company Clear Labs has raised $18 million from investors including GV, Khosla Ventures and Redmile Group. The company plans to use the funding to develop technologies for coronavirus testing. Clear Labs raised $21 million in 2018 at a $71 million valuation, according to PitchBook data.

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Exits

Microsoft lines up networking takeover

Microsoft has agreed to acquire Metaswitch Networks, a supplier of virtualized network software. The British startup has raised prior funding from an investor list that includes Francisco Partners, Northgate Capital and Sequoia.

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Apple buys virtual reality startup NextVR

Apple has reportedly confirmed it bought NextVR, a startup that provides 3D virtual reality content from sports, music and entertainment events. Website 9to5Mac had reported in April that Apple was in talks to buy the California company for about $100 million. Backed by investors such as SoftBank, Comcast Ventures and Peter Guber, co-owner of the Golden State Warriors, the startup provided content for several VR headsets and had inked a deal to produce highlights of the 2019 NBA Finals.

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Fundraising

Blackstone brings in $4.2B for life sciences vehicle

Blackstone has raised $4.2 billion toward a roughly $4.6 billion target for the firm's fifth life sciences fund, according to an SEC filing. The firm originally launched its life sciences division in 2018 when it acquired Clarus, pledging to invest in late-stage life sciences companies looking to bring their drugs to market.

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Cathay Capital brings in $1.4B across two new funds

Cathay Capital has raised $850 million for a PE fund, dubbed Midcap II, and a reported $550 million for a VC vehicle, Cathay Innovation II. The firm raised $525 million in 2014 for its previous PE fund, and $320 million in 2017 for its debut VC vehicle. The Midcap fund will invest in a range of sectors including consumer, digital services and healthcare, while the Innovation vehicle will focus on AI-related companies in industries such as edtech, fintech and energy.

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View 146 investments »