Snowflake worth $60B+ after banner debut

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The Daily Pitch: VC

September 17, 2020

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Today's Top Stories

Snowflake, JFrog skyrocket in trading debuts

Wall Street has doubled down on its enthusiasm for new tech IPOs, sending shares of cloud data specialist Snowflake up nearly 112% to close at $253.93 apiece in their first day of trading. The company now has a fully diluted value of $60.5 billion, nearly five times the $12.4 billion private market valuation it achieved earlier this year, according to PitchBook data.

Among the beneficiaries of the blockbuster IPO was early investor Sutter Hill Ventures, which led Snowflake's Series A and owns 17.4% of the company after selling more than 7 million shares in the offering. Salesforce Ventures and Berkshire Hathaway each purchased $250 million worth of Snowflake stock at the IPO price of $120 per share, with Berkshire purchasing an additional 4.04 million shares at that price. Snowflake raised nearly $3.4 billion in the IPO after selling 28 million shares.

DevOps software company JFrog also went public on Wednesday, with its stock ending the day up 47% at $64.79 per share and generating a fully diluted value of $5.2 billion for the company. JFrog was reportedly valued at $1.5 billion last year.

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Trump administration wants US control of TikTok

White House economic adviser Larry Kudlow said Wednesday that US officials are in a "deep review process" of the TikTok deal.
(Alex Wong/Getty Images)

The Trump administration is looking to give American investors a majority stake in TikTok, after concerns that Oracle's proposed partnership with the video app would not satisfy the administration's demands, according to The Wall Street Journal.

TikTok's parent company, ByteDance, has reportedly tried to keep its majority share of the business in its arrangement with Oracle. That has stoked the administration's national security concerns over China's potential access to US user data. And the proposed technology partnership fails to meet Trump's expectations for a full sale of the US business, the report said.

Under the new structure sought by the administration, all of ByteDance's assets would go to the newly created company, with Oracle and Walmart also becoming investors. That would bring total US investor ownership to over 50%, according to the report. US officials and investors could also seek a public listing of the new company to push that stake even higher.

Trump has said he does not approve of ByteDance's majority ownership of TikTok and won't make a decision until he knows more about the deal, the report said.

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A message from TBM Consulting

Unlock value creation and optimize opportunity in a COVID-19 world

Many portfolio companies are dealing with dramatically different supply, demand and/or internal capacity than they were six months ago. That means the opportunity to create value has shifted, too.

PE firms that hope to maintain their original exit dates and achieve or exceed their value creation targets will need to follow these three steps to align value creation plans with their portfolio companies' new normal:

Determine how the opportunity has changed and where the value now lies.
Adjust the value creation levers accordingly.
Identify and assess new risks.

For more, download the article, Rethinking Your Value Creation PlayBook, or contact Gary Hoover, Vice President and Global Private Equity Practice Leader, at ghoover@tbmcg.com.

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US middle-market deal value dove 18.5% in the first half

In the US, private equity investors completed less than $200 billion worth of middle-market transactions during the first half of the year, marking an 18.5% decline from H1 2019. It was perhaps the starkest sign of how the pandemic has transformed the US middle market, forcing firms to look for alternatives to the status quo.

PitchBook's Q2 2020 US PE Middle Market Report, sponsored by Antares Capital and presented in partnership with ACG, has more details and data on the depressed dealmaking environment in the middle market, plus other key trends from the first half of the year, including:

Through Q2, middle-market exit count is on pace for its lowest total since the global financial crisis

Middle-market fundraising was more resilient than deal and exit rates, with $44.3 billion raised in H1

The frequency of due diligence processes picked up near the end of H1, a sign deal activity could be set to increase

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Recommended Reads

She wanted to escape her marriage. He wanted to escape his life sentence. Together, they embarked on a canine-aided journey neither could have ever predicted. [The Atlantic]

Cameo emerged as a curious place to pay for C-list shoutouts. During the pandemic, though, the startup has assumed an increasingly prominent place in the pop culture economy. [The New Yorker]

Decades ago, billionaire businessman and private equity baron Chuck Feeney promised to give away nearly his entire fortune. Today, at 89 years old, he's succeeded. [Forbes]

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Quick Takes


	The Daily Benchmark
	2008 Vintage Global Venture Funds with less than $250M
	A message from SS&C Intralinks
	Can M&A rebound from the pandemic's pummeling?
	VC Deals
	AppDirect brings in $185M
	Alloy locks in Series B
	Portfolio Companies
	Sennder secures $1.1B freight deal with Uber
	Exits & IPOs
	Flipkart sets sights on mega-IPO
	Unity Software eyes potential $1.2B IPO
	Grail could forgo IPO for $8B Illumina deal
	VCs to offload Portworx for $370M

The Daily Benchmark

2008 Vintage Global Venture Funds with less than $250M

Median IRR

4.42%

Top Quartile IRR Hurdle Rate

14.73%

1.05x

Median TVPI

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True Ventures II

BlueRun Ventures IV

Harbert Venture Partners II

*IRR: net of fees

40 Funds in Benchmark »

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A message from SS&C Intralinks

Can M&A rebound from the pandemic's pummeling?

COVID-19 has been knocking the wind out of deals across every sector in every region. Can the M&A market stay on its feet given the numerous obstacles in the current dealmaking environment?

Read our new industry brief—Global M&A Catches Its Breath in an Uncertain Market—produced in association with PitchBook, for a ringside view of current M&A activity amid market challenges worldwide—with breakouts of trends and conditions in North America, South America, Europe and Asia.

The report also anticipates impacts on M&A from the upcoming US elections and the potential onslaught of new regulations globally, and explores whether a coronavirus vaccine will come too late to keep thousands of businesses from throwing in the towel.

Download this timely and time-sensitive report now.

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VC Deals

AppDirect brings in $185M

AppDirect, a provider of cloud-based subscription commerce tech, has raised a $185 million round from Caisse de dépôt et placement du Québec and existing backers. Founded in 2009 and based in San Francisco, AppDirect's platform is designed to simplify the digital supply chain by enabling the sale of products across a variety of channels and devices. The company was valued at more than $1.1 billion with a $140 million round in 2015, according to PitchBook data.

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Alloy locks in Series B

Alloy has raised $40 million in a Series B led by Canapi Ventures, with Avid Ventures, Felicis Ventures, Bessemer Ventures Partners, Primary Venture Partners and Eniac Ventures also participating in the round. Alloy helps financial services companies automate decisions, onboard customers, and mitigate fraud and financial risk. The New York-based startup raised $12 million at a $48 million valuation in July 2019, according to PitchBook data.

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Portfolio Companies

Sennder secures $1.1B freight deal with Uber

Berlin-based freight forwarding startup Sennder has purchased Uber's freight business in Europe in an all-stock transaction, with Bloomberg reporting the deal values the division at less than €900 million (nearly $1.1 billion). Sennder raised $100 million in venture funding during 2019 alone from backers including Accel and HV Holtzbrinck Ventures, according to PitchBook data.

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Exits & IPOs

Flipkart sets sights on mega-IPO

Flipkart is preparing for a possible IPO next year in the US or another country outside its home base of India, with a listing potentially valuing the Walmart-owned business at between $40 billion and $45 billion, according to LiveMint. Walmart paid $16 billion for a controlling stake in Flipkart in 2018, reportedly valuing the ecommerce powerhouse at about $21 billion.

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Unity Software eyes potential $1.2B IPO

Unity Software has raised the expected price range of its IPO to between $44 and $48 per share, up from a previous range of $34 to $42 apiece. The company, which plans to offer 25 million shares, could now raise up to $1.2 billion and obtain an initial market value of more than $12.6 billion. Unity is the creator of a platform that helps users make and operate interactive, real-time 3D content. The San Francisco-based company is expected to make its NYSE debut on Friday.

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Grail could forgo IPO for $8B Illumina deal

Grail, a cancer detection unicorn that filed for an IPO last week, is in talks to sell itself to genetic sequencing specialist Illumina in a deal that could be worth more than $8 billion, compared with $6 billion in prior private transactions, according to Bloomberg. Illumina helped found Grail. The Menlo Park-based startup has since raised more than $2 billion from Arch Venture Partners, Bezos Expeditions, Hillhouse Capital Group and several other investors and healthcare companies, according to PitchBook data.

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VCs to offload Portworx for $370M

Publicly traded cloud storage specialist Pure Storage has agreed to pay about $370 million in cash to acquire Portworx, a data services startup that helps enterprises run applications in containers in production environments. Portworx has raised more than $55 million in venture backing from GE Ventures, Mayfield Fund, Sapphire Ventures and others, reaching a $137 million valuation last year, according to PitchBook data.

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