|
|
|
PitchBook
|
|
|
|
|
The Weekend Pitch |
May 24, 2020 
|
|
|
|
|
|
|
In less than a decade, podcasts have developed from media curio into big business. A pair of recent developments demonstrate just how big that business is starting to become.
The No. 2 podcast in the US struck a $100 million-plus licensing agreement this week with Spotify. The hosts of the nation's top podcast, meanwhile, are embroiled in a very public contract dispute with the controversial founder of the private equity-backed company that helped launch their show to fame.
The first bit of news demonstrates Spotify's commitment to dominating the podcast space. And both speak to the growing power of podcast stars, who are using their voices, their minds and a microphone to generate seven-, eight- and even nine-figure fortunes.
Welcome to The Weekend Pitch. I'm Kevin Dowd, and you can reach me at weekend@pitchbook.com. The continued maturation of the podcast industry is one of 11 things you need to know from the past week: |
|
|
|
|
|
 |
Joe Rogan is now a $100 million man.
(Douglas P. DeFelice/Getty Images) |
|
|
1. Audiophiles and audio files
You may have first encountered Joe Rogan as a standup comic, a sitcom actor, a martial arts analyst, or the host of television's "Fear Factor." But since launching "The Joe Rogan Experience" in 2009, he has been best known as a podcasting pioneer, building a rabid fan base on the strength of his sprawling conversations with a diverse collection of guests about everything from politics to extraterrestrials.
And before long, the only place those fans will be able to get their fix is Spotify. The audio streaming service continued a recent string of podcast investments this week by signing an exclusive deal with Rogan for the show's back catalog and its future shows. All told, the package reportedly could be worth more than $100 million.
Earlier this year, Spotify agreed to acquire The Ringer, a pop culture site and podcast network led by Bill Simmons, another early podcasting star, reportedly for nearly $200 million. In 2019, the company paid a total of about $400 million for the Gimlet Media and Parcast podcast networks as well as Anchor, which makes podcast development tools.
Taken together, the moves mark a massive bet by Spotify on the utility of having a stable of exclusive podcasts under its control. That's in stark contrast to Apple, which has taken a largely hands-off approach to its own highly popular podcasting platform.
So far this year, "The Joe Rogan Experience" has been the second-most popular title on Apple's podcast charts, according to Podcast Insights. The top spot is occupied by a relative newcomer to the scene, and one that this week highlighted a different aspect of podcasting's evolution: "Call Her Daddy," a sex and culture podcast owned by Barstool Sports, a red-blooded digital media company backed in part by The Chernin Group.
The New York Times has the full account of the show's strange saga. The short version: Since launching "Call Her Daddy" in 2018, hosts Alexandra Cooper and Sofia Franklyn have turned into online superstars. In April, they abruptly stopped airing new shows, sparking a wave of rumors and cryptic Instagram posts. Last weekend, Barstool founder Dave Portnoy published a tell-all podcast on the "Call Her Daddy" feed detailing his negotiations with the duo over a new contract.
It seems to have resulted in a split. Late Friday night, Cooper announced on YouTube that she had reached an agreement to go solo with Barstool and take over "Call Her Daddy" by herself.
The economics of the situation might be stunning to those who still think of podcasting as a hobby for the NPR set. Portnoy said Barstool was losing $100,000 for every missed episode, and that the company had offered Cooper and Franklyn base salaries of $500,000 a year, plus a raft of incentives. This comes at a time when most digital media companies are slashing costs and laying off workers. But in 2020, the hosts of a successful podcast are very different from typical media employees. They are stars in their own right.
Not every podcast business is thriving. Luminary, a new service that launched last year with what's believed to be well over $100 million in venture funding, set out to raise new capital at a reduced valuation, Bloomberg reported earlier this month. The vast majority of podcasts aren't enormous moneymakers. But names like Rogan, Simmons, Cooper and Franklyn are able to draw enough ears to make a serious dent in a market that could top $1 billion in annual ad revenue by 2021, according to data from the Interactive Advertising Bureau and PwC.
That's still a drop in the bucket of the online ad empires built by Facebook and Google. But in a sense, companies like Spotify and Barstool may be following a similar playbook to those tech giants: First, win people's hearts and minds with technological innovation and entertaining content. Then, win their wallets one ad at a time.
2. The week in SoftBank
Masayoshi Son compared himself to Jesus on an investor call this week on the same day his company, SoftBank, reported a $17.7 billion loss. What a sentence. This week was also a busy one for companies backed by SoftBank's Vision Fund. Reports emerged that Indian ridehailing company Ola had laid off about 1,400 workers, while construction tech startup Katerra raised $200 million from SoftBank and hired a new CEO, a little over a month after the company conducted layoffs of its own.
3. Medical mega-deals
This week brought a spate of nine-figure fundings, including a trio of major deals in healthcare. Atea Pharmaceuticals, which is developing a drug to help treat COVID-19, raised $215 million in a round led by Bain Capital Life Sciences. Telemedicine startup American Well collected $194 million in new funding. And Rallybio raised $145 million to finance its development of drugs for rare diseases.
4. Fintech mega-deals
Like healthcare, the fintech sector has proven relatively resilient to the trying times of the coronavirus crisis. And like healthcare, fintech saw some new mega-deals this week. Corporate-credit startup Brex secured $150 million, reportedly an extension to its Series C, while Aspiration, a digital banking startup that emphasizes social consciousness, brought in $135 million, according to Fortune.
5. Even more mega-deals
Like I said: It was a full week. Magic Leap raised $350 million in new funding mere weeks after announcing 1,000 layoffs, according to multiple reports. Mortgage specialist States Title signed a $123 million agreement. Couchbase collected $105 million to fund its database services. And Mindstrong locked down $100 million in new VC, a reflection of a growing interest in mental health startups. |
|
 |
Brain waves are making waves in VC.
(Science Photo Library/Getty Images) |
|
|
6. Valuation reductions
Samsara Networks, which makes internet-of-things products for industrial markets, raised $400 million at a $5.4 billion valuation this week, according to Bloomberg, a slight drop from the $6.3 billion valuation that came with the company's prior funding. In a very different sector, fashion startup Rent the Runway is on the brink of losing its unicorn status, with Bloomberg reporting that the company is in talks to raise new funding at a $750 million valuation.
7. The IPO rebound
The IPO drought caused by the arrival of the coronavirus is showing signs of abating. SelectQuote, a private equity-backed provider of insurance comparison tools, raised $570 million in a debut this week and saw its stock rise 35% on its first day of trading. Medical device specialist Inari Medical also had a successful debut, with its stock more than doubling on its first day from an already-increased IPO price. There's also Vroom, the VC-backed provider of a used-car marketplace, which filed this week for a public offering.
8. Mega-fund resilience
Ares Management is targeting €9 billion (nearly $10 billion) for its latest European debt fund, The Wall Street Journal reported, one of a few signals this week that big-time private equity funds aren't slowing down during the crisis. Asia's MBK Partners reportedly closed a $6.5 billion fund of its own, and Oaktree Capital Management registered a new vehicle with the SEC that reportedly has a $15 billion target.
9. Law & order
Forescout Technologies is suing Advent International over Advent's attempts to walk away from a $1.9 billion deal to acquire the cybersecurity specialist, the latest legal battle to enforce contracts signed before the coronavirus outbreak.
10. Boom & bust
TikTok named a new CEO this week, bringing in former Disney executive Kevin Mayer to lead the wildly popular social media app. Shortly thereafter, Bloomberg reported that the valuation of ByteDance, the parent company of TikTok, has soared to over $100 billion in recent secondary sales. It was a very different kind of week for another Chinese company that once had its eye on global domination: Luckin Coffee's stock price plunged more than 30% this week as the fallout continues from a fraud investigation.
11. Imperfection
Produce doesn't have to be pretty. That's one of the guiding ideas behind Imperfect Foods, a grocery startup delivering food that, for one reason or another, doesn't meet the standards of most grocery stores. So far, at least, all those misshapen carrots and "ugly" turnips are paying off: The company raised $72 million in new funding this week, the latest indication of growing investor interest in grocery delivery.
View the full list online |
|
|
|
|
|
|
|
 |
| (amygdala_imagery/E+/Getty Images) |
|
|
|
The coronavirus crisis continues to have significant impacts on nearly every aspect of the investment world. That includes shifts in the sorts of companies drawing interest from investors. Priyamvada Mathur wrote this week that startups using AI to automate recruiting and other HR processes could be on the brink of a boom in VC investment.
The pandemic has also brought about a change in focus for the lobbying efforts of organizations representing venture capital and private equity. This week, Adam Lewis and James Thorne examined private investors' endeavors to help their companies gain access to federal relief loans. |
|
|
|
|
|
 |
| (supawat bursuk/iStock/Getty Images Plus) |
|
|
|
When it comes to investing, busier isn't necessarily better. But if you are interested in dozens of rankings of the most active firms, banks and advisers on the private markets during the first three months of 2020, you're in the right place.
For the first time, PitchBook's quarterly Global League Tables are completely interactive, making it easier than ever to locate the information you're after. Which private equity firms backed the most add-ons? Which investment banks worked on the most IPOs? We've got answers to those questions and many, many more. |
|
|
|
|
|
The fundraising environment across the private markets looks very different today than it did three months ago. PitchBook's Q1 Private Fund Strategies Report explores the new reality, including major fundraising slowdowns across private equity and private debt.
The pandemic has produced a sharp divide in outcomes for different segments of the food and beverage industry. Delivery startups are seeing more demand than ever. Many restaurants, meanwhile, face an existential threat. In a preview version of his full quarterly update, PitchBook analyst Alex Frederick offers a look at the latest in foodtech during these chaotic times.
There haven't been too many VC-backed IPOs in recent weeks. Recent years, though, brought a flurry of high-profile debuts. Cameron Stanfill and Van Le published a new analyst note this week offering an index to compare the fate of those VC-backed offerings against the broader market. |
|
|
|
|
|
 |
| Meet The Beatles. (David Redfern/Getty Images) |
|
|
|
This week, a French startup building software to help other companies manage their financial data raised €4 million (around $4.3 million) in venture funding. That startup's name is Pennylane. Which got me thinking: What would be the best song from The Beatles to name your business after?
There are already multiple companies called Blackbird, as well as a firm called Blackbird Ventures. California is home to a gourmet food business called Glass Onion Catering. Much to my delight, there appears to be a chain of smoke shops in western North Carolina called Octopus Garden. But where is the autonomous submersible startup called Yellow Submarine? The robo-writing service called Paperback Writer? Where is the brave entrepreneurial soul who wants to say, "Hi, I'm the founder of Rocky Raccoon?"
Someday. Someday. |
|
|
|
|
|
Recommended reads
The experience industry had been booming in recent decades. After the coronavirus, can it ever be the same? [The New York Times]
We probably all have certain fantasies and dreams that are helping us navigate these strange times—perhaps 12-year-olds more so than most. [Wired]
The idea of $10 trillion in government spending to combat the coronavirus might sound insane. It also might be the best hope for the US economy. [The Atlantic]
A closer look at Mukesh Ambani, the magnate who's helped draw some $8.8 billion in funding to a budding internet colossus during the past month. [The Wall Street Journal]
A century-old legal ruling about foul balls could impact how movie theaters and theme parks reopen their doors. [The Hollywood Reporter]
Many restaurants and other food-focused businesses are struggling. For the flour maestros of Carbohydrate Camelot, though, business has never been better. [Marker]
The DIY aesthetic has transformed the worlds of software and hardware. Can it—and should it—do the same for medicine? [The New Yorker]
Tales of spycraft and subterfuge at the Ritz Hotel in London are shining an unlikely spotlight on two 85-year-old British billionaire twins. [Bloomberg]
SimCity, but for oil refineries? For a brief period more than 25 years ago, it was Chevron's dearest wish. [The Obscuritory] |
|
|
|
|
|
Quote of the week
"It's ultimately going to backfire. There's a limit to how much money you can make when you're sticking knives into human skin for profit."
—Dr. Jane Grant-Kels, a dermatologist and professor, speaking to Bloomberg about PE's growing role in healthcare |
|
|
|
|
|
The Weekend Pitch is produced by editor Kevin Dowd.
Were you forwarded this newsletter? Sign up at pitchbook.com/subscribe. |
|
|
|
|
|
|
|
|
Since yesterday, the PitchBook Platform added:
|
|
83
People
|
23
Companies
|
1
Funds
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
