PitchBook News - Inside VC's post-pandemic playbook

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The Daily Pitch: VC

June 2, 2020

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

Today's Top Stories

Facing crisis, venture capitalists follow a new script

San Francisco International Airport sees little traffic these days. (Justin Sullivan/Getty News)

Venture capital is an exercise in optimism. But as the US tentatively reopens following weeks of lockdown, even the most ardent optimists are being put to the test as the pandemic wreaks havoc on the economy.

The turmoil isn't only a threat to the emerging crop of founders-turned-investors; even veterans of the dot-com bust and the global financial crisis are reassessing their approach. The new playbook calls for a more defensive approach, a sharp about-face from years of frenzied venture investing. It will also redraw the lines around areas of opportunity, for a world that has changed dramatically—and in some ways permanently:

Recommended Reads

PETA has always deployed a certain degree of shock in its battle for animal rights. But these days, as the group's victories mount, its strategy involves a whole lot more than buckets of red paint. [The New York Times]

Social Capital founder Chamath Palihapitiya isn't afraid to say what's on his mind, even if it means alienating more and more of his fellow billionaires. [Institutional Investor]

SpaceX has successfully sent humans into space. What's next? [Recode]

Since yesterday, the PitchBook Platform added:

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Funds

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Quick Takes


	The Daily Benchmark
	2006 Vintage Global Venture Funds with more than $250M
	Webinar Promo
	Webinar: How are private debt markets responding to the COVID-19 slowdown?
	VC Deals
	Autonomous robot developer lands $29M
	Beam drives off with $26M
	Cancer detection startup Ezra gets $18M
	Jeff Bezos backs logistics startup Beacon
	Bonusly secures $9M
	Portfolio Companies
	Talkspace calls off Facebook partnership
	Exits
	Vroom sets IPO terms

The Daily Benchmark

2006 Vintage Global Venture Funds with more than $250M

Median IRR

3.56%

Top Quartile IRR Hurdle Rate

11.74%

1.28x

Median TVPI

Select top performers

Summit Partners Venture Capital Fund II

Thomas McNerney & Partners II

M/C Venture Partners VI

*IRR: net of fees

22 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

Webinar Promo

Webinar: How are private debt markets responding to the COVID-19 slowdown?

Join PitchBook analysts on Tuesday, June 9, at 10 a.m. PT as they cover the entire private debt market landscape, including direct lending, venture debt, special situations and distressed debt.

They'll dissect data from early 2020 and provide an outlook for each strategy, given current market dynamics.

The webinar will address:

Which investors were first to act on the new wave of distressed opportunities and why is this time different from the global financial crisis?

What happens to all the dry powder waiting to be deployed if there are fewer transactions for direct lenders?

How will founders, CEOs and lenders react to current conditions?

Register today to secure your spot.

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VC Deals

Autonomous robot developer lands $29M

Canadian robotics startup Otto Motors has raised $29 million in a Series C led by Kensington Capital Partners. The startup, a division of Clearpath Robotics that was launched in 2015, makes autonomous robots for manufacturing and warehouse applications; it counts GE, Toyota and Nestle among its customers.

Additional Investors:

BMO Capital Partners, Export Development Canada, Inovia Capital, RRE Ventures

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Beam drives off with $26M

Singapore-based micromobility startup Beam has raised a $26 million Series A co-led by Sequoia India and Hana Ventures. The company offers e-scooters across countries including Australia, Malaysia and South Korea.

Additional Investors:

AppWorks, Cherubic Ventures, RTP Global, RedBadge Pacific, Right Click Capital

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Cancer detection startup Ezra gets $18M

Healthtech startup Ezra has secured an $18 million round led by FirstMark Capital, with participation from Accomplice, Seedcamp, Credo Ventures, Founders Future, LDV Capital and several angel investors. Based in New York, Ezra utilizes AI and medical imaging to detect cancer in its early stages. The startup is introducing a new CT scan designed to detect lung damage caused by COVID-19.

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Jeff Bezos backs logistics startup Beacon

Beacon has raised $15 million from investors including Jeff Bezos and 8VC. The London-based company, founded in 2018 by two former Uber executives, facilitates trade logistics and supply chain finance. Beacon raised a $3.5 million seed round last year and is also backed by investors including GV, NEO Ventures and Xplorer Capital.

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Bonusly secures $9M

Bonusly has raised a $9 million Series A led by Access Venture Partners, with participation from Next Frontier Capital, Operator Partners and FirstMark Capital. The Colorado-based company offers an employee engagement platform to track productivity and provide digital rewards.

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View 38 competitors »

Portfolio Companies

Talkspace calls off Facebook partnership

Behavioral telehealth startup Talkspace has walked away from discussions to partner with Facebook, according to a tweet by Talkspace CEO Oren Frank. "We will not support a platform that incites violence, racism, and lies," Frank wrote. The news follows Facebook's decision not to moderate a post by President Trump, which called for the use of deadly force against looters. Frank told CNBC that the deal was worth hundreds of thousands of dollars and involved a content partnership as well as free therapy for some Facebook users.

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View 47 competitors »

Exits

Vroom sets IPO terms

Vroom, which offers an online used car marketplace, has set a price range of $15 to $17 per share for its planned public offering of 18.75 million shares, according to an SEC filing. A midpoint pricing would raise $300 million and value the New York-based company at more than $1.8 billion. Vroom, which had furloughed about a third of its workforce as of May 3, is backed by investors including L Catterton (20.6% pre-IPO stake), T. Rowe Price (16%) and General Catalyst (6.4%). The company plans to trade under Nasdaq symbol VRM.

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Chart of the Day

"Although the immediate pipeline for M&A will likely see hikes in rescue transactions and restructurings, we expect European carveout activity to significantly pick up in the coming quarters. Strategics will prioritize the management of financial risks, while sponsors will focus on saving portfolio companies and thereafter seek opportunistic ways to deploy their €508.3 billion in private capital dry powder."

Source: PitchBook's Q1 2020 European M&A Report