PitchBook News - Deal count is down for IoT startups

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The Daily Pitch: VC

October 2, 2020

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

Today's Top Stories

Pandemic pressures weigh on IoT venture ecosystem

VCs poured $5.1 billion into the internet-of-things sector in the first half of 2020, a 17% increase in capital invested year-over-year. Deal count was down for the IoT industry as a whole, and the industrial, smart retail and software subsectors experienced dramatic declines. IoT security, however, has emerged as an outstanding opportunity in the software space.

Although supply chain constraints and other pandemic-related challenges have largely frozen growth in IoT, a significant snapback in demand is likely in a recovery, according to our H1 2020 Emerging Tech Research report on the sector. Other key takeaways include:

VC exit value is on pace to set a record in 2020, following the substantial acquisitions of security specialists CyberX and Armis

Microsoft and Google are compounding their advantages in the industrial IoT and consumer device markets, respectively, through M&A

Additional connectivity standards are still needed to drive the continued expansion of IoT devices

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Hims to go public in $1.6B deal with Oaktree-backed SPAC

Hims, a telemedicine startup that provides wellness products and services for men and women, has plans to go public through a reverse merger with an Oaktree Capital Management-backed blank-check company.

The deal values the San Francisco-based company at about $1.6 billion, slightly more than the $1.1 billion valuation it achieved after a funding round in January 2019, according to PitchBook data.

Hims' current management and shareholders including Founders Fund, Forerunner Ventures, IVP, Redpoint Ventures, Thrive Capital, McKesson Ventures, and the Canada Pension Investment Board plan to roll almost all of their equity into the new company.

The transaction is expected to provide the combined company with $280 million in cash through a $205 million contribution from Oaktree Acquisition and a private placement of $75 million with Franklin Templeton and some of Oaktree's other clients.

Since its founding in 2017, Hims has conducted over 2 million telehealth consultations. About 260,000 subscribers were using the company's platform as of June, the majority of which were millennials, Hims' long-term target market.

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A message from InCloudCounsel

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Private equity firms and their legal teams are taking a page from Billy Beane's playbook by incorporating data analytics into new parts of the dealmaking process.

Join the Association for Corporate Growth and InCloudCounsel for a conversation on Tuesday, Oct. 20, about the impact of data analytics on baseball and how deal teams and legal departments are applying similar practices across large contract datasets to make processes more efficient and achieve better business outcomes.

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Weekly Recap

In case you missed it:

• Silver Lake has spent the past 21 years amassing a PE war chest. Now, with a new partnership and a new fund strategy, the Menlo Park-based firm is planning for the next two decades.

• Corporate venture capital firms are often perceived as tourist investors that tend to back off during difficult economic circumstances. So far in 2020, CVCs are defying that reputation.

• Will Ventures, a Boston-based firm led by a former Seattle Seahawks linebacker, has raised $55 million for its first fund.

The team at Boston-based Will Ventures includes (from left) Brian Reilly, Alexis Nicolia, Isaiah Kacyvenski and Kirby Porter.
(Courtesy of Will Ventures)

• Palantir and Asana both claimed healthy valuations with their direct listings this week. For one of those companies, however, a long-awaited exit was soured by a letter to the SEC from House representatives.

• The public debuts of Asana and Palantir may be part of a larger IPO market frenzy that's unfolding in the tech industry.

• Amid a busy year for blockbuster telecom deals, Japan's Nippon Telegraph & Telephone is hoping to take its mobile unit private by purchasing the 34% stake in the business it doesn't own.

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Recommended Reads

Leaders at the University of Arizona had 16 weeks and five days to prepare their campus for reopening this fall. They needed every second of it. [The Atlantic]

Invite-only chat app Clubhouse has won plenty of Silicon Valley plaudits, not to mention a $100 million valuation. Earlier this week, though, the platform showed a darker side. [Tablet]

In August, a writer entered the NBA's seemingly unbreakable bubble to find something out: In a year like 2020, does entertainment still matter? [The New York Times]

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Quick Takes


	The Daily Benchmark
	2013 Vintage Global Venture Funds
	VC Deals
	Digital marketing startup banks $160M Series B
	Sophia Genetics gets $110M for medical data platform
	GV leads $37M round for dental startup
	Solo.io collects $23M Series B
	Pacaso brings home $17M Series A
	Exits & IPOs
	Fastly snares Signal Sciences for $775M
	Cisco to purchase Portshift

The Daily Benchmark

2013 Vintage Global Venture Funds

Median IRR

15.50%

Top Quartile IRR Hurdle Rate

30.19%

1.54x

Median TVPI

Select top performers

Foresite Capital Fund I

OrbiMed Private Investments V

Pear Ventures I

*IRR: net of fees

35 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

VC Deals

Digital marketing startup banks $160M Series B

Digital marketing startup Sendinblue has raised $160 million in Series B funding from Bridgepoint, Bpifrance, BlackRock and Partech. The company offers tools including email, marketing automation and sales management for small and medium-sized businesses across 160 countries. Based in Paris, Sendinblue also has offices in the US, Canada, Germany and India.

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Sophia Genetics gets $110M for medical data platform

Sophia Genetics has secured $110 million in a Series F co-led by aMoon and Hitachi Ventures, with support from Endeavour Vision, Swisscom Ventures and Alychlo. The Swiss startup is the developer of an AI-based medical data platform that helps healthcare professionals at more than 1,000 hospitals manage their patients' cancer and other diseases.

Additional Investors:

Generation Investment Management, Eurazeo, ACE & Company, Famille C

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GV leads $37M round for dental startup

Tend has raised a $37 million Series B led by GV, with participation from investors including Tiger Global and Redpoint Ventures. Launched in 2019, the company is an operator of dental studios in New York, with plans to use the new funding to expand operations to areas including Boston and Washington, DC. Tend was valued at $66 million last year, according to PitchBook data.

Additional Investors:

Juxtapose, GoodFriends, Zigg Capital

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Solo.io collects $23M Series B

Redpoint Ventures and True Ventures have co-led a $23 million round for Solo.io, the developer of an open-source API infrastructure platform. The funding values the company at $105 million, according to PitchBook data.

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Pacaso brings home $17M Series A

Pacaso, the developer of a real estate platform that helps individuals purchase a share in a second home via a co-ownership agreement with vetted buyers, has launched with a $17 million round led by Maveron. The San Francisco-based company has also collected $250 million in debt financing, which will be used to purchase shares of homes. Zillow co-founder Spencer Rascoff is chairman of Pacaso, while former Zillow executive Austin Allison serves as the startup's CEO.

Additional Investors:

Crosscut Ventures, Global Founders Capital, Howard Schultz

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Exits & IPOs

Fastly snares Signal Sciences for $775M

Fastly has completed its $775 million purchase of Signal Sciences, with plans to combine the company's web application and API security with its own edge cloud platform and security offerings. Based in Culver City, Calif., Signal Sciences has raised prior funding from firms including Vulcan Capital, Lead Edge Capital and CRV.

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Cisco to purchase Portshift

Cisco has agreed to buy Portshift, an application security company based in Tel Aviv. Portshift launched in 2018 out of Israeli accelerator Team8 with a reported $5.3 million in seed backing. Cisco will absorb the business into its emerging technology and incubation group.

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