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The Daily Pitch: VC

July 28, 2020

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

Today's Top Stories

Examining how US economic uncertainty is impacting VC

Between 2008 and 2009, the onset of the global financial crisis caused a 31% decline in the median valuation jump for early-stage startups raising new venture capital. Will the coronavirus crisis cause a similar dip?

PitchBook analysts Daniel Cook and Andy White join our hosts on the latest episode of the "In Visible Capital" podcast to answer that and several other questions about how the pandemic may affect the startup landscape, drawing on their recent quantitative research into how US venture capital fares during times of economic uncertainty.

Topics include:

How the 2008 recession is impacting how PitchBook views the current VC ecosystem

How to evaluate the impact of exit value vs. number of exits

What limited partners make of the VC landscape

listen here

More coronavirus news: Continuing coverage from PitchBook

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Shedding light on shadow capital

(Anass Bachar/Getty Images)

The VC industry has evolved dramatically in the past decade, and the boom in nontraditional venture investors has been a key part of the shift. Although determining the true value of that investment strategy can be challenging, its magnitude is significant.

In a recent research note exploring this lesser-known market segment and assessing its prominence across different stages of the investment cycle, PitchBook analysts estimated nontraditional capital availability could be as high as $340 billion:

read it now

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A message from Finistere Ventures

Agtech and foodtech in the COVID-19 era

How has the COVID-19 pandemic transformed venture investment in agtech and foodtech? In a brand-new, concise market update, Finistere Ventures draws on PitchBook datasets to explore key trends in investment, including valuations and top financings, to analyze which prior trends have accelerated and which are new. In addition, Finistere Ventures summarizes the tactics investors within the space are utilizing to adapt to the unprecedented environment, such as ensuring portfolio companies' runways or shifting emphases in due diligence.

Read the post here

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Qualtrics to spin out from SAP in IPO

Ryan Smith co-founded Qualtrics with his father and brother in 2002.
(Steve Jennings/Getty Images)

In November 2018, Qualtrics was planning an IPO at an anticipated valuation of about $4.3 billion. Instead, four days before the scheduled listing, the Utah-based creator of survey and market research software agreed to sell itself to global software giant SAP for $8 billion, at the time the most expensive acquisition ever of a VC-backed SaaS company, according to PitchBook data.

Now, less than two years later, SAP has announced that Qualtrics intends to spin out and conduct a public offering after all, indicating a desire to expand both the company's autonomy and its user base. SAP said it plans to retain a majority stake in Qualtrics after the offering.

Qualtrics founder Ryan Smith and much of the company's leadership team have remained in place in the 18 months since the acquisition by SAP was finalized. On the other hand, the SAP chief executive who led the deal, Bill McDermott, stepped down from his position last October.

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Recommended Reads

Self-driving cars are still a ways off from widespread adoption here on Earth. Thanks to NASA, they may soon be a reality on Mars. [Wired]

During a pandemic, a visit to Disney World is an uncanny and stultifying experience. But at least everyone is wearing a mask. [The Atlantic]

In past decades, jaw-dropping returns transformed hedge fund managers into some of the financial world's biggest stars. These days, though, the industry is confronting a humbling new reality. [Bloomberg]

Since yesterday, the PitchBook Platform added:

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Quick Takes


	The Daily Benchmark
	2013 Vintage Global Buyout Funds
	VC Deals
	Ro hits $1.5B valuation following General Catalyst-led round
	MBX Biosciences gets $34.6M
	OpenSpace brings home $15.9M
	Life sciences platform creator raises $4M

The Daily Benchmark

2013 Vintage Global Buyout Funds

Median IRR

15.08%

Top Quartile IRR Hurdle Rate

20.79%

1.48x

Median TVPI

Select top performers

Sun Capital Partners VI

Novacap TMT IV

TDR Capital III

*IRR: net of fees

77 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

VC Deals

Ro hits $1.5B valuation following General Catalyst-led round

Healthtech startup Ro has raised a $200 million Series C led by General Catalyst, with support from existing backers including FirstMark Capital and SignalFire. The New York-based company has now raised $376 million in total funding, with the latest round pushing its valuation to $1.5 billion, according to CNBC. Ro provides telehealth services to men and women through the brands Roman and Rory, respectively, as well as a smoking cessation program called Zero.

Additional Investors:

3L, BoxGroup, Initialized Capital, TQ Ventures, The Chernin Group, Torch

View round

View 7 competitors »

MBX Biosciences gets $34.6M

Drug discovery startup MBX Biosciences has landed $34.6 million in a Series A led by Frazier Healthcare Partners, with support from OrbiMed, NEA and others. The Indiana-based biotech company focuses on developing treatments for rare endocrine diseases; it will use the new funds to further its pipeline of preclinical peptide therapeutics.

Additional Investors:

BioCrossroads, Twilight Venture Partners, Indiana Philanthropic Venture Fund

View details

View similar company »

OpenSpace brings home $15.9M

OpenSpace has raised a $15.9 million Series B led by Menlo Ventures, with participation from Nine Four Ventures and Taronga Group, among others. Founded in 2017, the San Francisco-based company is a developer of AI-based construction tech that helps users track projects via computer vision and data analytics. OpenSpace raised $14 million at a $40 million valuation last August, according to PitchBook data.

Additional Investors:

Lux Capital, JLL Spark, Navitas Capital, Zigg Capital

View round

View similar company »

Life sciences platform creator raises $4M

WhizAI, the developer of a cognitive insights platform for the life sciences industry, has collected a $4 million seed round led by Healthy Ventures, with participation from Bling Capital, Firebolt Ventures and existing backers. Based in New Jersey, the company's AI-based tech uses natural language processing, anomaly detection, and data modeling and visualization to provide users with business intelligence.

View round

View 43 competitors »

Chart of the Day

"Though add-on acquisitions have been an increasingly important part of sponsor-backed M&A for the last decade, the COVID-19 pandemic has propelled their use to new heights. PE add-on deals accounted for just over 70% of all buyouts in the quarter. This is the second time add-ons composed such a large proportion of PE deal flow; the first time was in Q1 of this year."

Source: PitchBook's Q2 2020 North American M&A Report