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The Daily Pitch: VC

September 22, 2020

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

Today's Top Stories

Quibi mulls sale amid struggle for new subscribers

Less than six months after going live, Quibi is exploring its options, which include a potential sale, a merger with a blank-check company or raising more capital, according to The Wall Street Journal.

The short-form video streaming service has reportedly struggled to gain subscribers as streaming competitors rush to release their platforms in the throes of the coronavirus pandemic. It's hoping to draw the attention of technology and media companies including Amazon and Alphabet, the report said.

Founded by Hollywood executive Jeffrey Katzenberg and run by Silicon Valley veteran Meg Whitman, Quibi had planned to sign up 7.4 million paid subscribers by next April, but won't pass the 2 million mark at its current pace, the WSJ reported in June.

Quibi is also caught in a legal battle with interactive video startup Eko over patent infringement claims. Eko alleged earlier this year that it created and patented the technology used in Quibi's "turnstyle" feature, according to reports, which plays videos based on how viewers hold their phones.

In March, Quibi reportedly closed a $750 million funding round, bringing its total investments to $1.75 billion.

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Electric vehicle startups rev up for growth

(Volodymyr Kalyniuk/Getty Images)

Investor enthusiasm has led to soaring valuations for publicly traded electric car companies, while a host of startups in the space have announced plans in recent months to go public via special-purpose acquisition companies. Better technology, regulatory tailwinds and investment in electrification by traditional automakers could give them an even bigger big boost.

Our latest analyst note takes a look at what lies down the road for this burgeoning space. Among the findings:

The market for plug-in hybrid and battery-powered vehicles is poised to expand dramatically by the mid-2020s
More governments worldwide are encouraging the use of electric cars to combat air pollution and traffic congestion
Many emerging electric vehicle startups are on course to enter the market in the next few years and could significantly disrupt incumbent automakers

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A message from DFIN

As the workforce grows more distributed, data privacy is paramount

Ownership of your data remains a key point of contention across the wide digital security landscape. The impact of the COVID-19 pandemic, which has temporarily to permanently altered traditional workflow modes, now also presents novel challenges to email and data security and access management. In turn, as DFIN's latest whitepaper reveals, dealmaking has been vigorous as enterprises search for greater scope, not just scale, to expand and strengthen product and service offerings via M&A. In 2020 already, over $8 billion in deal value has closed across the data privacy realm.

Read the whitepaper to analyze key datasets, see expert perspectives from DFIN on regulatory considerations, and more.

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Fresh power boost for video game valuations

Bethesda executive producer Todd Howard unveils the studio's "Fallout 76" title onstage in 2018. (Christian Petersen/Getty Images)

video game developers such as Epic Games and Unity Software have seen their valuations soar in recent months, as investors take note of an uptick in consumer spending in the gaming sector during the pandemic.

With the launch of its newest Xbox consoles less than two months away, Microsoft is getting in on the action with the $7.5 billion acquisition of the company behind "The Elder Scrolls," "Fallout" and other beloved titles:

Recommended Reads

It's been 63 years since Earthlings first sent an object into orbit, and already, the space junk is starting to pile up. How worried should we be about a catastrophic collision? [The New Yorker]

The coronavirus crisis has dealt further damage to a local news business that was already reeling. So in cities across the US, it's student journalists who are leading the push to hold power to account during the pandemic. [The Washington Post]

The ongoing saga of Nikola presents a question that some in Silicon Valley might prefer to avoid: Are founders allowed to lie? [AlexDanco.com]

Since yesterday, the PitchBook Platform added:

15

VC valuations

1406

People

389

Companies

10

Funds

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Quick Takes


	The Daily Benchmark
	2012 Vintage Global PE Funds between $250M-$500M
	People
	Founder quits Nikola after fraud allegations
	VC Deals
	Playco becomes gaming unicorn with $100M round
	Mobile Premier League raises $90M
	Novellus secures $57M
	Portfolio Companies
	Mobile fitness app Aaptiv considers sale
	Exits & IPOs
	Ant raises expected IPO to $35B
	Grail forgoes IPO for $8B deal with Illumina
	Roche to pay $447M in pharma exit
	PagerDuty to pick up Rundeck for $100M

The Daily Benchmark

2012 Vintage Global PE Funds between $250M-$500M

Median IRR

14.18%

Top Quartile IRR Hurdle Rate

19.73%

1.56x

Median TVPI

Select top performers

Bridgepoint Development Capital II

Frontenac X Private Capital

Excellere Capital Fund II

*IRR: net of fees

25 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

People

Founder quits Nikola after fraud allegations

Nikola founder and executive chairman Trevor Milton has resigned from the electric vehicle maker. The announcement comes after financial research firm Hindenburg Research accused Milton of making fraudulent statements about the automaker and its technology. Hindenburg Research, which has developed a short position against Nikola, published the claims after General Motors inked a $2 billion deal with the electric vehicle maker. Phoenix-based Nikola went public through a merger with blank-check company VectoIQ Acquisition earlier this year.

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VC Deals

Playco becomes gaming unicorn with $100M round

Playco, a Tokyo-based manufacturer of games that can be played in web browsers, has raised a $100 million Series A at a $1 billion valuation. Josh Buckley and Sequoia co-led the financing. Playco was co-founded by CEO Michael Carter, who also helped launch mobile gaming company Zynga.

Additional Investors:

Sozo Ventures, Caffeinated Capital, KSK Angel Fund, Mistletoe, Digital Garage, Dreamers VC, Makers Fund

Mobile Premier League raises $90M

Gaming company Mobile Premier League has raised $90 million in Series C financing led by SIG and RTP Global. The Indian startup, which hosts fantasy sports leagues and esports tournaments, is said to be the largest gaming platform in Asia, with over 60 million users. The funding gives MPL a pre-money valuation of between $375 million and $400 million, according to TechCrunch.

Additional Investors:

MDI Ventures, Pegasus Tech Ventures, Go-Ventures, Base Partners, Sequoia India

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Novellus secures $57M

Novellus has raised a $57 million Series C led by Pontifax, with participation from investors including OrbiMed Advisors, HBM Healthcare Investments and Wellington Management. The Israel-based drug developer provides a gene-profiling platform designed to support cancer treatments.

Additional Investors:

Cormorant Asset Management, Novartis Venture Fund, SR One

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Portfolio Companies

Mobile fitness app Aaptiv considers sale

Aaptiv, a mobile fitness startup that offers guided audio workouts, has hired an adviser to help it explore a sale or other strategic options, according to Bloomberg. The New York-based company is said to be on track to post a profit as of this month. Aaptiv reportedly raised funding from Insight Partners earlier this year and has received prior backing from the Amazon Alexa Fund, Disney, Warner Music and more.

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Exits & IPOs

Ant raises expected IPO to $35B

Ant Group is now looking to raise at least $35 billion in its initial public offering, up from an original $30 billion target, according to Bloomberg. The Chinese fintech giant raised its IPO expectations after gauging interest from early investors and increasing its valuation to $250 billion from $225 billion, the report said. Last week, Ant Group received approval from regulators to move forward with its Shanghai listing.

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Grail forgoes IPO for $8B deal with Illumina

Illumina has agreed to buy Grail, the cancer detection startup it helped found, for $8 billion in cash and stock. Grail, which had filed for an IPO earlier this month, has raised $1.9 billion in prior funding from Jeff Bezos, Bill Gates and several other investors and healthcare companies. The Menlo Park-based startup is developing blood tests that can detect a range of cancers.

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Roche to pay $447M in pharma exit

Swiss pharmaceutical giant Roche has agreed to acquire Inflazome, a Dublin-based developer of inflammasome inhibitors designed to treat various chronic inflammatory conditions, for €380 million (about $447 million), plus other potential earnouts. Inflazome was founded in 2016 and has raised prior funding from investors including Forbion, Longitude Capital, Novartis and Fountain Healthcare Partners.

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PagerDuty to pick up Rundeck for $100M

PagerDuty has agreed to buy DevOps automation specialist Rundeck for about $100 million in cash and stock. The Redwood City, Calif.-based company provides automated IT incident response services to more than 150 enterprise and mid-market companies. Rundeck raised $3 million in seed funding from TDF Ventures at a $20 million valuation in 2017, according to PitchBook data.

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Chart of the Day

"We expect US investors to participate in more and larger deals with Israel-based startups as awareness mounts and new opportunities arise. VC deals with US investor participation accrued a record $3.2 billion in 2019 and are pacing for a high showing in 2020 as well. The total number of deals with US investor participation has also steadily risen during the last decade."

Source: PitchBook's 2020 Israel Private Capital Breakdown