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The Daily Pitch: VC

June 16, 2020

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

Today's Top Stories

Presenting 'In Visible Capital,' a new podcast from PitchBook

In recent years, PitchBook News has put an increasing focus on original reporting and interviews that complement our private-market data.

We are now adding to that coverage with "In Visible Capital," a weekly podcast dedicated to breaking down the traditionally opaque private markets through interviews with PitchBook journalists, analysts and other industry experts.

Join our co-hosts Adam Lewis and Adley Bowden for the first four episodes of Season One.

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Epic Games nears $750M round at $17B valuation

A "Fortnite"-inspired dance competition gets underway at the 2019 Amazing Las Vegas Comic Con. (Paul Butterfield/Getty Images)

"Fortnite" maker Epic Games is nearing a $750 million round at a valuation of about $17 billion, according to Bloomberg. Investors reportedly include T. Rowe Price, Baillie Gifford and previous Epic Games backer KKR.

The video game maker, which also owns social networking app Houseparty, reportedly held talks in April to raise between $500 million and $1 billion. In 2018, KKR, Vulcan Capital, Kleiner Perkins and others bought a $1.25 billion stake in the company, according to reports. Epic Games also counts Tencent, Disney and Endeavor among its backers.

Reports of the new funding come amid heightened interest in the video game industry as more people look for ways to pass the time during stay-at-home orders. Over 12 million viewers tuned in for rapper Travis Scott's concert, virtually aired in the "Fortnite" app. And recently, the app featured a trailer of the upcoming Christopher Nolan movie "Tenet."

Zynga recently bought Turkish mobile game maker Peak Games for $1.8 billion, and in May, AppLovin bought mobile games provider Machine Zone.

More coronavirus news: Continuing coverage from PitchBook

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A message from DFIN

Examining the impact of US elections on cyclicality in dealmaking

M&A activity has a cyclical nature—so does the democratic process. The thread that ties the present moment in the M&A cycle to past election years in the US is volatility. Not only did the 2008 election unfold against the backdrop of the financial crisis, but the fallout from the bursting of the dot-com bubble rippled through the 2000 cycle.

With the past serving as a guide, this full-length white paper, anchored by an interview with Craig Clay, president of global capital markets at DFIN, draws on PitchBook datasets to examine the impact of US election cycles on dealmaking since 2006.

Download the white paper

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Trio of biotech companies updates IPO terms

(Petr Smagin/Getty Images)

Biotech IPOs entered the pandemic with momentum and have continued to show strength, despite a broader pullback in public listings. So far in 2020, healthcare companies as a whole accounted for nearly 85% of VC-backed IPOs in the US, according to PitchBook data.

That trend is holding this week, as three venture-backed biotech startups have announced target ranges for their upcoming IPOs:

Forma Therapeutics, a Massachusetts-based developer of treatments for rare hematologic cancers and diseases, plans to offer around 11.76 million shares on the Nasdaq for between $16 and $18 per share.

Operating out of Montreal and Boston, precision oncology company Repare Therapeutics is offering just over 7.35 million shares on the Nasdaq, with a target range of $16 to $18 apiece.

San Diego-based Progenity, a genetic testing provider, is offering about 6.67 million shares, which it expects to sell on the Nasdaq for between $14 and $16 each.

Chinese cancer diagnostics company Genetron Holdings and Royalty Pharma, a New York-based acquirer of biopharma royalties, are also planning Nasdaq debuts for sometime this week, according to Renaissance Capital.

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TPG, L Catterton become latest Jio backers

Since its founding in 2016, Mumbai's Jio Platforms has amassed a growing group of backers and users. (Mayur Kakade/Getty Images)

In recent months, Indian telecom upstart Jio Platforms has attracted a slew of significant investments from corporate investors, venture capitalists and private equity firms alike. And the list keeps growing.

TPG Capital has agreed to pay 45.5 billion rupees (around $600 million) for a 0.93% stake in Jio, while L Catterton has agreed to invest 18.9 billion rupees in the company for a 0.39% stake. Both new investments value Jio at $65 billion. KKR, General Atlantic, Silver Lake, Facebook and Vista Equity Partners are some of the other major names that have backed Jio during the second quarter of 2020.

The influx of money into Jio amid an economy-flipping pandemic underlines unwavering investor interest in large digital platforms. A subsidiary of Reliance Industries, Jio is a top India telecom provider, with more than 370 million subscribers in a country of over 1.3 billion.

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Why PE firms are taking public tech companies private at a faster clip

The latest research note from our private equity analyst team examines a boatload of data on buyout firms taking public tech companies private. This note breaks down the rationales behind the strategy as well as the characteristics of the public companies prior to such transactions, with key takeaways including:

The median time between a company going public and subsequently being bought out by a PE firm has been declining since the financial crisis
PE firms are targeting faster-growing public tech companies than they used to
Target companies often saw their valuation drop more swiftly relative to their peers prior to being taken private

read it now

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Recommended Reads

In recent months, the fallout from the coronavirus outbreak has led to any number of strange financial dealings. What's happening at Hertz may be in a class by itself. [Vanity Fair]

Inside Jack Dorsey's radical experiment for billionaires to give away their money. [Recode]

A few prominent members of Utah's tech industry thought they could disrupt coronavirus testing. Were they right? [The New Yorker]

Since yesterday, the PitchBook Platform added:

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People

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Quick Takes


	The Daily Benchmark
	2008 Vintage Global PE Funds between $250M-$500M
	VC Deals
	Shattuck Labs takes in $118M
	Chinese digital health startup lands $85M
	Kalderos picks up $28M Series B
	Exits
	Republic buys real estate investing platform Compound

The Daily Benchmark

2008 Vintage Global PE Funds between $250M-$500M

Median IRR

8.49%

Top Quartile IRR Hurdle Rate

15.10%

1.59x

Median TVPI

Select top performers

Altaris Health Partners II

KSL Capital Partners Supplemental II TE

Evergreen Pacific Partners II

*IRR: net of fees

16 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

VC Deals

Shattuck Labs takes in $118M

Biotech startup Shattuck Labs has raised $118 million in a Series B led by Redmile Group. The startup, based in Durham, N.C. and Austin, is creating a platform to make therapies for cancer and autoimmune diseases. Shattuck is partnering with Takeda Pharmaceuticals on its lead drug candidate, which is in Phase I clinical trials.

Select Additional Investors:

EcoR1 Capital, Fidelity Management & Research, Hatteras Venture Partners, Janus Henderson Investors, Partner Fund Management

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Chinese digital health startup lands $85M

Beijing-based Miaoshou Doctor has reportedly raised a 600 million yuan (around $85 million) Series D1 from investors including Qiming Venture Partners, Sequoia China, Ince Capital, Citic Securities and Index Capital. The developer of a healthcare platform to connect patients and doctors, Miaoshou will use the funds to build out programs for virtual care, managing prescriptions and health insurance, China Money Network reported.

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Kalderos picks up $28M Series B

Bain Capital Ventures has led a $28 million round for Kalderos, the developer of a healthtech platform that helps pharmaceutical companies, healthcare providers and patients manage drug discount programs. Existing investor Mercato Partners, which led the company's Series A in 2019, also participated in the funding.

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Exits

Republic buys real estate investing platform Compound

Republic has acquired real estate investment platform Compound and launched such investing on its crowdfunding portal. Republic allows private companies to seek investments from the general public through its platform. New York-based Compound raised $2 million in early 2019, valuing it at $8.5 million, according to PitchBook data.

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