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The Daily Pitch: VC

October 15, 2020

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

Today's Top Stories

Reopened economies cause European PE activity to roar back

Across Dublin and other European markets, PE activity is ramping back up. (© Marco Bottigelli/Getty Images)

In Europe, private equity dealmakers closed on 972 transactions during the third quarter of the year, a leap of nearly 33% from the quarter prior. As economies across the region began to reopen from mass lockdowns caused by the coronavirus crisis, investors were eager to get back to work.

But despite last quarter's activity, the European market should still expect an uneven and uncertain recovery from the worst ravages of the pandemic, according to PitchBook's Q3 2020 European PE Breakdown. The report takes a data-driven look at the bounce-back in deal activity and several other key trends, including:

The tech sector proved to be one of the biggest drivers of Q3's dealmaking push

Annual PE exit count in Europe is on pace for a 10-year low, a sign of continued caution from sponsors

On the other hand, PE fundraising figures in Europe are on track to reach their second-highest annual total this decade

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Robert Smith settles DOJ probe for $140M

Robert Smith, the founder of Vista Equity Partners, has reached a $140 million settlement agreement with the Justice Department related to a probe into the billionaire's taxes, The Wall Street Journal reported.

The settlement reportedly includes a penalty of $85 million, with Smith also set to pay $30 million in back taxes and roughly $25 million in interest.

The four-year probe centered on whether Smith failed to pay taxes on $200 million in assets connected to businessman Robert Brockman, the sole investor in Vista's inaugural fund.

Under the settlement, Smith will admit liability for taxes owed but he won't face prosecution, the WSJ reported.

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A message from Datasite

The adaptation of due diligence in the PE dealmaking landscape

In the COVID-19 era, nearly everything seems to have changed. Private equity's methods of due diligence are no exception. According to a recent Datasite survey of 500+ global PE professionals, dealmakers are leveraging new and emerging technologies to adapt and expedite classic approaches to due diligence in order to better navigate the highly competitive PE dealmaking environment.

In a full-length market review, Datasite utilizes PitchBook data and those survey results to analyze the current dealmaking landscape in depth, identifying the key trends defining the market and PE fund managers' priorities.

Read the report

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Driven by pandemic demand, mental health startups surpass 2019 funding

(katleho Seisa/Getty Images)

As Americans struggle with mental health conditions exacerbated by COVID-19, VC investment in virtual care services has taken off—increasing more than fourfold since 2015.

Mental health startups logged a series of mega-rounds in the first three quarters of this year alone. And with meditation app maker Calm reportedly eyeing a $150 million round at a $2.2 billion valuation, the sector's funding haul is set to keep growing:

Recommended Reads

In the isolation of the pandemic, teenagers are searching for new ways to connect, aiding an ongoing explosion in popularity for a game called "Among Us." [The New York Times]

An answer to a question you may have never thought to ask: What would happen if a cult started an edtech platform? [OneZero]

Airbnb rentals are replacing nightclubs as the place where revelers unconcerned with social distancing go to mingle. For experts in the home rental marketplace, it's "something we've never seen before." [Bloomberg]

Since yesterday, the PitchBook Platform added:

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Quick Takes


	The Daily Benchmark
	2017 Vintage Global PE Funds with $250M-$500M
	People
	Bain Capital Ventures adds talent partner
	VC Deals
	Getaround speeds off with $140M Series E
	SoftBank leads $140M Series D for farming startup Plenty
	Wealthsimple collects $87M in latest round
	Mexico-based rental startup banks $48M
	Fundraising
	Lead Edge Capital refuels with $950M

The Daily Benchmark

2017 Vintage Global PE Funds with $250M-$500M

Median IRR

8.66%

Top Quartile IRR Hurdle Rate

14.35%

1.13x

Median TVPI

Select top performers

Falfurrias Capital Partners Fund III

G Square Capital II

DC Capital Partners Fund II

*IRR: net of fees

26 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

People

Bain Capital Ventures adds talent partner

Leslie Kurkjian Crowe has joined Bain Capital Ventures as a talent partner. Crowe will collaborate with founders to scale their teams and build culture. She was chief people officer at TripActions; before that, she worked at MuleSoft and Dropbox.

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VC Deals

Getaround speeds off with $140M Series E

Car-sharing startup Getaround has raised $140 million in a round led by PeopleFund, with participation from investors including Reinvent Capital, SoftBank and Pennant Investors. Founded in 2009, the San Francisco-based company is the provider of a platform that allows users in more than 300 cities to rent cars by the hour or day. Getaround was valued at $1.7 billion in August 2019, according to PitchBook data.

Additional Investors:

Menlo Ventures, Cathay Innovation, Braemar Energy Ventures, Triangle Peak Partners, Asset Plus Capital, Bpifrance, Via ID

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SoftBank leads $140M Series D for farming startup Plenty

Plenty, an operator of indoor vertical farms, has raised a $140 million round led by SoftBank, with participation from fresh berry company Driscoll's. The funding will be used in part to execute a collaboration in which Plenty will grow Driscoll's strawberries in its indoor farms. San Francisco-based Plenty has raised over $500 million in total funding. Its renewable energy-powered farms can grow the equivalent of 1,500 acres worth of food in a building the size of a large grocery store.

View details

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Wealthsimple collects $87M in latest round

Canadian fintech startup Wealthsimple has raised C$114 million (around $87 million) in a round led by TCV. Greylock Partners, Meritech, Two Sigma Ventures and existing investor Allianz X also participated in the funding, which values the Toronto-based company at C$1.4 billion. Wealthsimple provides automated investing, commission-free stock and crypto trading, tax filing software and other financial products to more than 1.5 million Canadians. The startup raised C$100 million in May 2019.

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Mexico-based rental startup banks $48M

Short-term rental startup Casai has landed a $48 million Series A. TriplePoint Capital will provide up to $25 million in debt financing, while Andreessen Horowitz led the $23 million in equity funding. Kaszek Ventures, Monashees Capital, Global Founders Capital and Liquid 2 Ventures also participated in the round. Casai manages 200 housing units in Mexico City and has plans to expand throughout Latin America. To date, the company has raised $53 million.

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Fundraising

Lead Edge Capital refuels with $950M

Lead Edge Capital has closed its latest vehicle on a hard cap of $950 million, the growth-stage firm's fifth and largest flagship fund to date. New York-based Lead Edge, led by Mitchell Green, raised $520 million for its previous namesake fund in 2018. The firm's portfolio companies include project-management specialist Asana, which went public in September, and China-based financial powerhouse Ant Group, which is expected to have its own IPO in the coming months.

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Chart of the Day

"During H1 2020, the median and average VC fund size has been pacing slightly higher than in 2019, further underlining resolute fundraising conditions amid travel restrictions and lockdowns across Europe. Israel-based S Capital VC closed its S Capital Fund II at €110.0 million, one of the six €100+ million funds to close in Q2."

Source: PitchBook's Q2 2020 European Venture Report