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PitchBook

The Daily Pitch: VC

June 30, 2020

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

Today's Top Stories

Discussing NBA star Spencer Dinwiddie's VC ambition on 'In Visible Capital'

In the latest episode of PitchBook's "In Visible Capital" podcast, PitchBook editor Kevin Dowd breaks down his recent article, "NBA standout Spencer Dinwiddie has a VC-fueled vision for the future of stardom," which appears in the latest issue of the PitchBook Private Market PlayBook magazine.

Topics discussed in the episode include:

Dinwiddie's launch of venture firm Eonxi, and his bid to tokenize his $34.4 million NBA contract

Why Wall Street and Silicon Valley investors continue to pour billions of dollars into professional sports, even as leagues struggle with the financial fallout from COVID-19

listen here

More coronavirus news: Continuing coverage from PitchBook

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How startups are making the promise of AI and machine learning a reality

The US and China are in the midst of a global competition for leadership in AI and machine learning. And in any number of applications for these technologies, ranging from semiconductors to autonomous machines, it's a competition that is being contested via venture capital.

Our latest emerging tech report on AI and machine learning offers market maps of VC-backed companies in the vertical, technology overviews, and analysis of opportunities and risks. Other key takeaways include:

VCs devoted $34.3 billion to AI and machine learning deals in 2019, a 23.7% year-over-year drop due largely to declines in Chinese VC activity
Deal activity has been driven by vertical applications including healthcare, IT and consumer AI
Recent acquisition activity has been driven by sales and marketing automation, information security automation and conversational AI

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

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Lululemon to buy home fitness startup Mirror for $500M

(Kevork Djansezian/Getty Images)

Lululemon has agreed to acquire Mirror for $500 million, just months after it backed the fitness startup in a funding round led by the venture arm of Steve Cohen's hedge fund, Point72.

New York-based Mirror is the developer of an interactive workout platform that offers live and on-demand classes from a wall-mounted screen. With a price tag of $1,495, the mirror-like device is meant to serve as an at-home gym alternative, giving users access to weekly live classes, thousands of on-demand workouts and one-on-one personal training.

Mirror will operate as a standalone company within Lululemon and be helmed by its current CEO, Brynn Putnam. The deal is expected to close in the second quarter.

Lululemon participated in Mirror's $34 million Series B1 last year, along with backers including supermodel Karlie Kloss, Lerer Hippeau and Spark Capital. The athletic apparel retailer also has a content partnership with the startup, offering classes from its global ambassadors on the Mirror platform. Since its founding in 2018, Mirror has raised a total of $72 million.

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Our top 10 articles of June

Don't miss our most popular content of the past month:

Facing crisis, venture capitalists follow a new script

NBA standout Spencer Dinwiddie has a VC-fueled vision for the future of stardom

Black founders say VC responses on race could affect future connections

PE has failed to outperform stocks, research says, but LPs aren't turning away

Private equity-backed bankruptcies surged in May, but future might not be so bleak

Creative capital: How cash-strapped funds bridge liquidity gaps

8 big things: Airbnb, Palantir lead a glitzy IPO pipeline

Virtual IPO roadshows could become the new post-crisis standard

Investors are wary about private equity's new access to 401(k)s

Funds, recruiting and support: VCs address diversity and inequality

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Recommended Reads

A fraud scandal and the ensuing collapse of Luckin Coffee has been one of the year's most fascinating financial stories. And it might not have happened without one anonymous email. [The Wall Street Journal]

The recent rise of ghost kitchens anticipated a future where eating at restaurants was a thing of the past. As it turns out, that future arrived quicker than anyone imagined. [The New Yorker]

The rise of ridehailing sent New York City's taxi industry reeling. The pandemic may prove to be a knockout blow. [The New York Review of Books]

Since yesterday, the PitchBook Platform added:

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Quick Takes


	The Daily Benchmark
	2016 Vintage Global Venture Funds with more than $250M
	VC Deals
	Chinese edtech startup pulls in $750M
	KKR leads $48M media deal
	Codefresh collects $27M
	ForgePoint leads $25M round for Area 1
	Cynet picks up $18M
	Aclaimant nabs $10M
	Portfolio Companies
	Telegram to pay $18.5M in SEC settlement
	Change.org to donate $6M to racial justice after criticism
	Reddit bans pro-Trump discussion forum
	Exits
	Shift to go public via reverse merger
	Empower to buy wealth management company for up to $1B

The Daily Benchmark

2016 Vintage Global Venture Funds with more than $250M

Median IRR

18.34%

Top Quartile IRR Hurdle Rate

28.23%

1.28x

Median TVPI

Select top performers

Advantech Capital

Battery Ventures XI Side Fund

Battery Ventures XI

*IRR: net of fees

29 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

VC Deals

Chinese edtech startup pulls in $750M

Zuoyebang, a Chinese online tutoring startup for primary and secondary school students, has raised a $750 million Series E led by FountainVest Partners and Tiger Global, according to reports. SoftBank's Vision Fund, Qatar Investment Authority, Sequoia China, Tiantu Capital and Xiang He Capital are also believed to have participated in the round. Zuoyebang was reportedly founded by Chinese search engine giant Baidu in 2014; it spun out as its own business in 2015.

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KKR leads $48M media deal

KKR has led a $48 million investment in Artlist, an Israeli company that provides video and sound clips, as well as licensed music to filmmakers and other content creators. Existing Artlist investor Elephant Partners also took part in the round.

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Codefresh collects $27M

DevOps workflow startup Codefresh has raised $27 million in a round led by Red Dot Capital Partners, with Shasta Ventures and existing investors also participating in the funding. The startup is the developer of a platform that lets users build container-based apps. Founded in 2014 and based in Mountain View, Calif., Codefresh has now raised more than $40 million in total VC financing.

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ForgePoint leads $25M round for Area 1

Area 1 Security, a provider of email security services, has raised $25 million in a growth round led by ForgePoint Capital. Existing investors Kleiner Perkins, Icon Ventures and Top Tier Capital also backed the funding. Based in Redwood City, Calif., Area 1 helps companies in a variety of industries prevent malware, ransomware and targeted phishing attacks. The startup has also announced the addition of Patrick Sweeney as CEO.

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Cynet picks up $18M

Cynet has raised $18 million in a round led by Deutsche Telekom Capital Partners. Founded in 2015, the company offers a cybersecurity platform to detect and manage data breaches. BlueRed Partners, Merlin International, Norwest Venture Partners and Ibex Investors also participated in the funding.

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Aclaimant nabs $10M

Aclaimant, the Chicago-based creator of a safety and risk management platform, has collected a $10 million Series A led by Mercury Fund. Royal Street Ventures, Ebsco Capital, Kec Ventures, RRE Ventures and Aspen Capital Group also participated in the round. Founded in 2013, Aclaimant provides employers in the staffing, construction, real estate and hospitality industries with loss prevention, incident management and analytics.

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Portfolio Companies

Telegram to pay $18.5M in SEC settlement

Telegram has agreed to pay an $18.5 million penalty and return more than $1.2 billion to investors in a settlement with the SEC. Last October, the SEC sued the instant messaging platform provider, alleging it had not registered a digital token offering that raised more than $1.7 billion from investors for a blockchain platform and cryptocurrency project. Telegram pulled the plug on that effort in May after a court battle with the SEC.

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Change.org to donate $6M to racial justice after criticism

Change.org has announced plans to create a $6 million fund focused on racial justice causes, according to Fast Company. The news comes after allegations that the organization was profiting from petitions related to the deaths of George Floyd, Breonna Taylor and Ahmaud Arbery, with former Change.org employees urging the company in a Medium post to donate the money raised. Change.org is backed by Obvious Ventures, Uprising and others, including a variety of angel investors.

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Reddit bans pro-Trump discussion forum

Reddit has banned a pro-President Trump subreddit, or discussion forum, on its social networking platform for not abiding by the company's content policy. Along with the ban of "r/The_Donald," Reddit blocked 2,000 other subreddits, including left-leaning "r/ChapoTrapHouse." It also introduced a new policy for its platform, stating that users "that promote hate based on identity or vulnerability will be banned."

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Exits

Shift to go public via reverse merger

Online used-car seller Shift Technologies has announced plans to go public in Q3 via a reverse merger with special-purpose acquisition company Insurance Acquisition. The SPAC will pay $380 million in stock, plus an additional 6 million shares contingent upon certain price targets. Shift has raised VC backing from investors including Great Oaks Ventures, DCM Ventures and Alliance Ventures. It reached a valuation of $511 million in April 2019, according to a PitchBook estimate.

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Empower to buy wealth management company for up to $1B

Empower Retirement has agreed to acquire online wealth management company Personal Capital for up to $1 billion. The Redwood Shores, Calif.-based company has raised around $300 million from backers including BlackRock, IVP and Correlation Ventures. Personal Capital was valued at $950 million with a $50 million fundraise in February 2019, according to PitchBook data.

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Chart of the Day

"The propensity to use capital in a follow-on rather than a first-time round has filtered through the ecosystem during the last decade. In 2019, 92.4% of venture euros went to follow-on deals. Capital in first-time deals has remained flat in the last five years, while follow-on rounds have doubled in total value. The shift could be compounded as countries undergo lockdowns in Europe."

Source: PitchBook's Q1 2020 European Venture Report