PitchBook News - Telehealth takes center stage for VCs

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The Daily Pitch: VC

September 24, 2020

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Today's Top Stories

Alec Gores strikes again with biggest SPAC merger to date

Alec Gores sits flanked by Mary-Kate Olsen, Ashley Olsen, model Beth Whitson and actress Melissa George (left to right) at a New York City fashion show in 2011. (Stephen Lovekin/Getty Images)

A special-purpose acquisition company backed by The Gores Group has agreed to combine with United Wholesale Mortgage in a reverse merger that will value the mortgage origination provider at roughly $16.1 billion.

The deal reinforces the standing of Alec Gores as a blank-check baron and represents the latest record-breaking development in what's already been an extraordinary year for SPACs:

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The pandemic is driving new VC interest in retail health

Venture firms funneled nearly $2 billion to retail-oriented companies in the health and wellness industry during the second quarter of 2020, the latest sign of spiking interest in the space. As the biggest global health crisis in a century continues to unfold, investors have been eager to back startups offering telehealth tools and a wide array of other services aimed at keeping patients well.

The rise of remote care driven by stay-at-home orders has been one major impetus, according to a new piece of Emerging Tech Research focused on retail health and wellness tech. But a number of other shifts in the industry are also driving deals, including a focus on preventative care and the ever-expanding cost of traditional healthcare. Other highlights include:

A growing elderly population and increased life expectancy have expanded demand for many healthcare services

Consumer wellness startups are inking new corporate partnerships in a bid to improve employee benefits

The mass adoption of mobile devices is growing the user base for many telehealth providers

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

read the preview

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A message from Deloitte

Preparing for the post-pandemic era

The COVID-19 pandemic is not over, but it will cease at some point. Many companies are looking ahead to the post-COVID environment, assessing what preparations could help them position for what is set to be one of the more dynamic business environments in years. In the latest edition of the Road to Next series, Deloitte examines how a critical component of the global ecosystem—expansion-stage companies that matured throughout the 2010s—are adapting to new economic realities.

Key themes include:

How much private capital is still flowing to these businesses and associated implications
The four key themes defining companies' preparations: antifragility, consolidation, diversification and opportunism
Insights from Deloitte partners on specific tactics, from new approaches to onboarding fresh, remote talent to investment in automation of processes and tasks that call for lower thresholds of judgment

Access the full report

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California zero-emission car order: More to follow in US

California Gov. Gavin Newsom signed an executive order banning new sales of gasoline-powered passenger vehicles starting in 2035. PitchBook analyst Asad Hussain, who covers the mobility sector, called the move "an important step in decarbonizing transportation." Other takeaways from Hussain:

Newsom's order is less aggressive than some European regulators' targeted phaseouts, but other US states are expected to adopt policies enacted in the nation's biggest auto market.

Regulatory tailwinds will help drive investment in electric vehicle companies and ultimately make these cars more convenient and affordable for consumers.

For traditional automakers, the biggest winners will be those that have taken greater ownership over the battery supply chain and invested in dedicated EV platforms.

Adds Hussain: "Those less committed to investing in the technology risk being caught flat-footed."

For more analysis, read Hussain's latest research note on why electric vehicles are poised to reshape the auto industry.

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Shares of Silver Lake-backed GoodRx rise 53% after $1.1B IPO

(d3sign/Getty Images)

GoodRx, which helps people find discounts on prescription medications, saw its shares skyrocket 53% in its first trading day. At Wednesday's closing price of $50.50 per share, the healthcare company's market cap was $19.4 billion, based on the number of outstanding shares.

GoodRx raised $1.1 billion in the offering after selling 34.6 million shares at $33 each, above its expected $24 to $28 range. The company offered 23.4 million shares, while 11.2 million shares were sold by existing investors. As part of a private placement, GoodRx's largest backer, Silver Lake (33.8% post-IPO stake), purchased additional stock worth $100 million at the IPO price. Francisco Partners (22.1%) and Spectrum Equity (12.5%) also retain significant post-IPO stakes.

The Santa Monica, Calif.-based company recorded $257 million in revenue in the first six months of 2020, an increase of 48% compared with the same period last year. GoodRx has been profitable since 2016 and reported net income of $66 million in 2019.

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Recommended Reads

What Apple did for the personal computer, founder Rony Abovitz promised Magic Leap would do for its own nascent field. As it turns out, though, not even an augmented reality startup can manufacture its own reality. [Bloomberg]

What happens when a country bans TikTok? In India, a nation of loyal users remains in mourning. [The Wall Street Journal]

The Great SPAC Boom of 2020 continues. What comes next is still a mystery. But Bill Ackman has a few ideas. [Institutional Investor]

Since yesterday, the PitchBook Platform added:

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Quick Takes


	The Daily Benchmark
	2008 Vintage Global Debt Funds
	VC Deals
	Robinhood worth $11.7B after adding to Series G
	Attentive lands $230M Series D
	Warburg Pincus dips into Salsify for $155M Series E
	SpotOn picks up $60M Series C
	Portfolio Companies
	WeWork sells majority stake in China business
	Exits & IPOs
	Ant Group eyes $17.5B for Hong Kong IPO
	Fundraising
	Longitude lands $585M for healthcare deals

The Daily Benchmark

2008 Vintage Global Debt Funds

Median IRR

11.84%

Top Quartile IRR Hurdle Rate

14.58%

1.52x

Median TVPI

Select top performers

PIMCO Distressed Mortgage Fund II

Apollo Credit Opportunity Fund I

Abry Advanced Securities Fund

*IRR: net of fees

26 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

VC Deals

Robinhood worth $11.7B after adding to Series G

Robinhood has raised another $460 million, adding more capital to the $200 million Series G it announced last month. The fresh funding from backers including Andreessen Horowitz, Sequoia and DST Global pushes the online trading company's valuation to $11.7 billion. This year alone, Robinhood has raised about $1.3 billion, boosting its worth by over $4 billion since a Series E last July that valued it at $7.6 billion, according to PitchBook data.

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Attentive lands $230M Series D

Attentive has raised $230 million in a round led by Coatue, with participation from investors including Tiger Global, Wellington Management, D1 Capital Partners, Atomico and Sozo Ventures. Attentive is the developer of a personalized text messaging platform that helps businesses such as Steve Madden and Urban Outfitters market their products. The New York-based company closed its Series C on $110 million in April.

Additional Investors:

Bain Capital Ventures, Eniac Ventures, High Alpha, IVP, NextView Ventures, Sapphire Ventures, Sequoia

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Warburg Pincus dips into Salsify for $155M Series E

Warburg Pincus has led a $155 million Series E round for Salsify, the developer of a multichannel experience platform for ecommerce companies. The Boston-based startup had raised nearly $100 million in prior venture funding from Greenspring Associates, Venrock and more, reaching a $308 million valuation in 2018, according to PitchBook data.

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SpotOn picks up $60M Series C

SpotOn, the creator of a payments platform for small and medium-sized businesses, has secured $60 million in a round led by DST Global. Existing investors such as Dragoneer Investment Group and Franklin Templeton also supported the funding. San Francisco-based SpotOn raised a $50 million Series B in March.

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Portfolio Companies

WeWork sells majority stake in China business

Trustbridge Partners has invested $200 million to increase its stake in WeWork China, with The Wall Street Journal reporting the Chinese growth firm will take majority control of the business from WeWork. Michael Jiang, an operating partner at Trustbridge, was appointed acting CEO of the business. Some aspects of the deal are similar to a traditional franchise model, the WSJ reported, with WeWork retaining a minority stake and a seat on the unit's board.

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Exits & IPOs

Ant Group eyes $17.5B for Hong Kong IPO

Ant Group hopes to raise $17.5 billion in its Hong Kong IPO, according to Bloomberg. The Chinese fintech company intends to split its public offering evenly between Hong Kong and Shanghai, which means Ant's total haul could be about $35 billion—more than Saudi Aramco's record $29 billion IPO. In a sign of confidence, Ant Group reportedly won't seek out cornerstone investors, which subscribe to purchase shares in upcoming IPOs.

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Fundraising

Longitude lands $585M for healthcare deals

Longitude Capital has closed its fourth flagship fund on $585 million, with plans to invest the capital in the biotech, medical tech and health solutions sectors. The fund will pursue traditional venture investments as well as spinouts, PIPE transactions and other deal types. The US-based firm closed its most recent fund on $525 million in 2016.

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Chart of the Day

"The proportion of early-stage VC deals exceeding $10 million has also continued to grow, bringing 2020's YTD total to a record level of 37.5%, up from 2019's 36.6% total. Furthermore, the proportion of deals exceeding $25 million has also continued to grow to a record level of 15.0% in H1 2020. Even though the pace of deals has slowed, larger early-stage deals have continued to close throughout Q2."

Source: Q2 2020 PitchBook-NVCA Venture Monitor