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How revising the Volcker Rule will affect the private markets
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Former US Federal Reserve board chairman Paul Volcker lent his name to a key plank of the Dodd-Frank Act.
(Alex Wong/Getty Images) |
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The global financial crisis introduced a new phrase into America's economic lexicon: "Too big to fail." When chaos enveloped Wall Street in 2008, the US government found itself in the position of bailing out private banks to ensure the nation's economy didn't collapse. To help prevent such events from unfolding again, legislators enacted the Volcker Rule, a measure that curbs US banks from making certain types of speculative investments.
Next month, the Volcker Rule is getting a makeover. Our latest analyst note combines a detailed history of the Volcker Rule with new insight into how the coming changes will impact the private markets, with smaller, less-capitalized VC ecosystems set to emerge as one potential winner: |
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On the podcast: European VC plows ahead despite COVID-19
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The COVID-19 pandemic has left no part of the global economy unscathed. But the European VC landscape has remained surprisingly resilient, driven in large part by continued investment in tech and a proliferation of sizable late-stage rounds.
PitchBook analyst Nalin Patel joins the latest episode of "In Visible Capital" to break down the current state of the European venture scene, including:
- How COVID-19 has caused Europe's work-from-home, healthcare, biotech and pharmaceutical industries to boom
- Why median valuations, deal sizes and step-up rounds have remained strong, with European corporate venture capital spending especially robust
- How a continued surge in European VC specialist funds targeting tech, healthcare and more has helped overall European VC fundraising stay relatively stable
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Klarna now Europe's most valuable fintech startup with $650M round
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| (Astrid Stawiarz/Getty Images) |
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Swedish payments startup Klarna has reached a $10.65 billion valuation with a $650 million investment led by Silver Lake.
- Klarna has nearly doubled its valuation since its last funding round in 2019
- The business has seen a surge in demand since the beginning of the pandemic as shops close and transactions move online
- Despite the crisis, European fintech startups have proved more resilient than most raising billions in VC funding
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| An earlier version of this newsletter was sent in error. This version includes news on Klarna's fundraising. |
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A message from Lincoln International
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Investors remain hungry for food & beverage acquisitions despite consumer behavior changes
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Lincoln International recently spoke with leaders of food and beverage brands as well as corporate buyers and PE investors to explore how changes in consumer behavior during COVID-19 will impact the industry and M&A in the year ahead.
As at-home consumption increased, consumers sped up several food and beverage trends that are creating appetizing opportunities for sellers and investors alike.
In the last six months, some consumers gravitated toward healthier options while others turned to emotional comfort in indulgent, nostalgic foods. At the same time, many shoppers took advantage of ecommerce platforms to avoid grocery store visits. The shifts caused by COVID-19 are likely to persist well into the future.
To learn about the implications of these trends and key M&A takeaways for food and beverage sector leaders, read this and other perspectives from Lincoln here. |
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On the podcast: European VC plows ahead despite COVID-19
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The COVID-19 pandemic has left no part of the global economy unscathed. But the European VC landscape has remained surprisingly resilient, driven in large part by continued investment in tech and a proliferation of sizable late-stage rounds.
PitchBook analyst Nalin Patel joins the latest episode of "In Visible Capital" to break down the current state of the European venture scene, including:
- How COVID-19 has caused Europe's work-from-home, healthcare, biotech and pharmaceutical industries to boom
- Why median valuations, deal sizes and step-up rounds have remained strong, with European corporate venture capital spending especially robust
- How a continued surge in European VC specialist funds targeting tech, healthcare and more has helped overall European VC fundraising stay relatively stable
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It started as a T-shirt. But before long, an entrepreneur named Marceau Michel had turned "Black Founders Matter" into a $1 billion venture fund. [The New York Times]
The restructuring of life required to help steel the American West against the inevitable prospect of even more destructive wildfires in the years to come would be costly. Avoiding it would be even costlier. [Intelligencer]
The pandemic has made clear just how critical a broadband connection is to modern American life. Will it inspire new steps to make internet access a right for us all? [Recode] |
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Since yesterday, the PitchBook Platform added:
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19
VC valuations
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1721
People
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510
Companies
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18
Funds
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2006 Vintage Global Venture Funds
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PitchBook Webinar: Impacts to US and European VC valuations in the current climate
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Investors are facing a uniquely opaque future in the private markets. That's why getting an aggregate view of the valuations environment—including the latest data across the US and Europe—is critical. Join tomorrow's webinar, where PitchBook VC analysts will discuss the latest valuations trends in more detail:
- Many early-stage VCs have been anticipating a drop in pre-money valuations for many red-hot early-stage companies; however, this decline has yet to materialize in the data
- Late-stage VC valuations have seen some strength as investors continue to back the most mature startups to protect value
- Despite an overall slowdown in exits, valuations haven't seen a sharp decline outside of IPOs
- The possible beginnings of an inflection point away from Q1's founder-friendly deal terms may have subsided
RSVP today |
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Alibaba looks to invest $3B in India's Grab as Gojek merger talks resume
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| Super app maker Grab is in talks to raise $3 billion from Alibaba and has revived discussions to merge with rival Gojek, according to reports. The rumored Gojek-Grab deal is being pushed by SoftBank at a time when both companies have seen their valuations fall in secondary markets, owing to pandemic-related stress on their core ridehailing and food-delivery businesses, according to the Financial Times. The $3 billion round would be the second-largest to date for Singapore-based Grab, which was valued at nearly $15 billion last year, according to PitchBook data. |
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India's Dream Sports valued at $2.5B
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| Dream Sports, the parent company of Indian fantasy sports platform Dream11, has raised $225 million at a $2.5 billion valuation, according to reports. Tiger Global, TPG, ChrysCapital and Footpath Ventures reportedly led primary and secondary investments in the Mumbai-based company. |
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Airtable picks up $185M Series D
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| Airtable has raised $185 million in a round led by Thrive Capital, with participation from investors including Benchmark, Coatue and CRV. The funding values the San Francisco-based company at $2.58 billion. Airtable is a provider of tools designed to help users including Netflix and Shopify build their own workflow software and other business solutions. The startup was valued at $1.1 billion in 2018, according to PitchBook data. |
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Escient Pharmaceuticals secures $77.5M Series B
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| Escient Pharmaceuticals, a developer of therapies for renal, autoreactive, neuro-immuno inflammatory diseases and other conditions, has raised $77.5 million in a round co-led by Sanofi Ventures and Cowen Healthcare Investments. The San Diego-based biotech company was valued at $49.5 million after a $40 million round in 2018, according to PitchBook data. |
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Snowflake eyes $29B+ valuation with increased IPO range
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| Cloud data specialist Snowflake has increased its IPO price range, with plans to offer 28 million shares for between $100 and $110 apiece, up from a previous range of $75 to $85 per share. A midpoint pricing of the new range would value the California-based company at more than $29 billion. Snowflake was valued at $12.4 billion in February, according to PitchBook data. The business is backed by investors including Dragoneer, Salesforce Ventures and Sequoia. |
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GoodRx sets range for potential $10B debut
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| GoodRx, the developer of an affordability-focused consumer healthcare platform, has revealed plans to price shares at between $24 and $28 apiece in its upcoming IPO on the Nasdaq. The Santa Monica, Calif.-based company will sell about 23.4 million shares in the listing, a midpoint pricing of which would raise about $609 million, while its existing backers will offer another 11.2 million shares. GoodRx has raised funds from investors including Silver Lake (35.3% pre-IPO stake), Francisco Partners (23.7%) and Spectrum Equity (15.4%). A midpoint pricing would result in a valuation of about $10 billion. |
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JFrog raises IPO price range
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| DevOps software company JFrog has increased the proposed price range for its coming IPO to between $39 and $41 per share, up from a previous range of $33 to $37. The company still plans to offer 8 million shares, with existing shareholders set to sell 3.6 million additional shares. A midpoint pricing would now give JFrog a market value of about $3.5 billion. The company's IPO is expected to price today, with a projected market debut on Wednesday. |
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"As expected in a quarter when the S&P 500 was up 9.1%, private markets finished 2019 on an upswing, with no foreshadowing of the volatility to come in early 2020. PE and VC were neck and neck for highest returns in the year through Q4 2019, coming in at 15.8% and 15.9%, respectively. Real assets continued to lag the other private market asset classes, in part because oil-related assets had begun to struggle in the fourth quarter."
Source: PitchBook's Global Fund Performance Report as of Q4 2019 |
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