PitchBook News - Emptying tech hubs could shake up VC

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The Daily Pitch: VC

May 26, 2020

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Today's Top Stories

VC faces a shakeup as workers abandon tech hubs

San Francisco's latest transformation is under way.
(Alexander Davis/PitchBook)

The age of the pandemic has jolted a string of tech companies into favoring work-from-home policies.

Their practices could be influential for countless other companies

Thousands of engineers and product managers could be working via Slack channels from literally anywhere; these changes, amplified by waves of startup layoffs and retail business failures, have begun a morbid transformation of downtown San Francisco and many other tech hubs

A historically concentrated web of wealth and talent is about to lose people—the glue that bound the new tech ecosystem together

Depending on the extent and permanence of the exodus, startups may not have much incentive to keep offices in town as they increasingly resort to distributed workforces

This could have a ripple effect for the new generation of VCs based downtown, as well as the traditional Silicon Valley firms that converted San Francisco's warehouses into their satellite offices

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More coronavirus news: Continuing coverage from PitchBook

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VC valuations adapt to new pandemic pressures

Even before the global economy entered a state of upheaval, there were signs that years of unchecked valuation growth could be coming to an end for the VC ecosystem in the US. But now, in the face of a pandemic, it's all but certain that the market has entered a new phase.

PitchBook's Q1 US VC Valuations Report sifts through all the latest data and offers detailed analysis of the current state of valuations across the whole of the venture landscape, from seed stage to late stage. Among the key takeaways:

The median pre-money valuation for late-stage deals declined to $73 million, continuing its slide from a peak in Q2 2019
The pandemic could pave the way for investors to secure more preferential terms, part of an ongoing shift in the balance of power on term sheets
The median pre-money valuation for seed deals declined in Q1 for the first time since 2012

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SPAC surge points to shifting IPO landscape

Shuttered since late March, the NYSE trading floor is set to reopen this week. (Spencer Platt/Getty Images)

When the trading floor of the NYSE shut down in March, it marked a low point for equities and a temporary halt to most new stock offerings.

Despite the volatility, special-purpose acquisition companies have continued to go public, grabbing a growing share of the IPO market.

So far this year, blank-check companies have raised more money than all other institutionally-backed IPOs, according to an analysis of company disclosures and PitchBook data. Their rise underscores the appetite among investors for dealmaking amid the pandemic:

Recommended Reads

Like countless others, sex workers are struggling to make ends meet during the pandemic. However, many are independent contractors and ineligible for government aid. [The New Yorker]

Hackers breached Apple's iPhone iOS 14 in February, long before the anticipated software release in September. So they have plenty of time to find its vulnerabilities. [Vice]

In developing countries like Brazil, COVID-19 has so far proved deadlier for young people. [The Washington Post]

Since yesterday, the PitchBook Platform added:

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Quick Takes


	The Daily Benchmark
	2014 Vintage Global Buyout Funds
	VC Deals
	Statespace secures $15M
	Portfolio Companies
	Monday.com hits $2.7B valuation
	Exits
	Inari Medical soars 124% in trading debut

The Daily Benchmark

2014 Vintage Global Buyout Funds

Median IRR

17.00%

Top Quartile IRR Hurdle Rate

24.00%

1.45x

Median TVPI

Select top performers

Consonance Private Equity

BVIP Fund VIII

Ufenau IV German Asset Light

*IRR: net of fees

78 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

Webinar: Shared mobility

Join us on May 28 at 10 a.m. PDT/1 p.m. EDT for a conversation about shared mobility—including ridesharing, car-sharing and micromobility—and the post-pandemic future of collective transportation.

During the discussion, PitchBook analysts and Zoba co-founder Daniel Brennan will explore:

The latest data on shared mobility, including recent investments and deals

The near- and long-term future of this space

Insights from Daniel Brennan, whose company works closely with shared mobility startups

Register now

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VC Deals

Statespace secures $15M

Statespace has raised a $15 million Series A led by Khosla Ventures, according to TechCrunch. The company offers data analytics and training tools for gamers. Existing investors including FirstMark Capital, Lux Capital and Expa also participated in the round. Khosla partner Samir Kaul will join the company's board.

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Portfolio Companies

Monday.com hits $2.7B valuation

Monday.com, a developer of project management software, has reached a $2.7 billion valuation, according to Bloomberg. Backed by investors including Sapphire Ventures and HarbourVest Partners, the Tel Aviv-based company raised a $150 million Series D last July at a $1.9 billion valuation, according to a PitchBook estimate.

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Exits

Inari Medical soars 124% in trading debut

Stock in medical device company Inari Medical surged 124% in its Friday trading debut after the company raised $156 million in an IPO. Inari sold 8.2 million shares for $19 each; shares closed Friday at $42.51. Founded in 2013 and based in California, Inari counts Gilde Healthcare, Versant Ventures and US Venture Partners as investors.

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