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The Daily Pitch: VC

October 20, 2020

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

Today's Top Stories

Tech deals buoy private equity as the crisis recovery continues

Thanks to the coronavirus crisis, the rate of US private equity dealmaking in 2020 continues to lag well behind past years. But there are reasons to think the market is beginning to bounce back after bottoming out during the second quarter—a recovery that's been driven in part by a stream of tech buyouts that not even a pandemic could halt.

Sponsored by UMB Fund Services and ON Partners, PitchBook's Q3 2020 US PE Breakdown examines the industry's insatiable appetite for tech deals, plus 2020's ongoing SPAC frenzy and other trends defining this time of transition across private equity. Key takeaways include:

PE firms have capitalized on a swift recovery for public equity markets with a string of multibillion-dollar exits via IPO

New government guidelines and a potential change to the tax code could lead to an uptick in dealmaking

Current signs point to a feverish finish to the year for PE fundraising

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Key Microsoft dealmaker jumps to EQT

Swedish private equity giant EQT has hired seasoned tech dealmaker Marc Brown as a partner and head of its new growth unit, the latest sign of the firm's ambitions for diversification in the wake of its initial public offering last year.

Brown was previously a vice president of corporate development at Microsoft, where he led more than 185 acquisitions for the tech colossus, including its $26.2 billion acquisition of LinkedIn in 2016 and its $7.5 billion takeover of GitHub in 2018. More recently, Brown was involved in Microsoft's ill-fated negotiations to acquire TikTok's US assets, according to Bloomberg.

EQT and some of the other biggest private equity firms in the world continue to display a building interest in both venture investments and tech deals, chasing the sorts of superior returns that earlier-stage investments can produce. In another notable recent hire, in August, Blackstone brought on Christine Feng as a senior managing director focused on tech investments; Feng had previously been a senior executive at Amazon focused on M&A.

For more on PE's growing appetite for tech, check out our latest analyst note.

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A message from Deloitte Private

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Conoco expands shale footprint with $9.7B Concho deal

A ConocoPhillips refinery in Ponca City, Okla.
(John Elk III/Getty Images)

ConocoPhillips has agreed to purchase fellow oil and gas company Concho Resources in an all-stock deal that values Concho at $9.7 billion and would create a combined entity with an enterprise value of about $60 billion. Investors will receive 1.46 Conoco shares for each Concho share, representing a 15% premium to Concho's closing stock price on Oct. 13.

The deal expands Houston-based Conoco's footprint in the Permian Basin and would result in the production of more than 1.5 million barrels of oil equivalent per day. The combination would also represent the largest US oil deal since the pandemic began affecting the energy markets, and would create the largest independent oil company in the country, according to The Wall Street Journal.

Conoco's planned acquisition of Concho follows a string of energy company consolidations amid low oil prices and weak demand. Chevron closed a $5 billion all-stock deal for Noble Energy earlier this month. And, in late September, Devon Energy agreed to buy WPX Energy for a price tag of $2.6 billion.

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Since yesterday, the PitchBook Platform added:

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VC valuations

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People

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Funds

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Quick Takes


	The Daily Benchmark
	2006 Vintage Global Debt Funds
	VC Deals
	Hyperscience hauls in $80M Series D
	Unit21 picks up $13M
	Solarea Bio collects $11M+ Series A
	Portfolio Companies
	Nextdoor mulls options for going public
	Exits & IPOs
	Ant Group gets approval for Hong Kong listing
	Networking companies connect with $450M deal
	Fundraising
	Lee Fixel's Addition lands $1.4B
	Investors
	Colonial Consulting rebrands as Crewcial Partners, CEO steps down

The Daily Benchmark

2006 Vintage Global Debt Funds

Median IRR

4.20%

Top Quartile IRR Hurdle Rate

7.08%

1.19x

Median TVPI

Select top performers

BDCM Opportunity Fund II

Oaktree European Principal Fund I

Cerberus Institutional Partners IV

*IRR: net of fees

16 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

PitchBook Webinar: Sustainable investing in the context of COVID-19

As private market investors continue to commit more dollars and create additional products around sustainable investing, the field has continued to evolve. From considering investments in the framework of ESG risk factors to newer developments in impact investing today, a lot has changed.

Join us for a webinar on Oct. 21 at 10 a.m. PT that discusses how LPs, GPs and their advisers are thinking about sustainable investing in the context of COVID-19. Takeaways will include:

Highlights from our 2020 sustainable impact survey, which includes responses from LPs, GPs and service providers

How investors are considering sustainable investing in light of the COVID-19 pandemic

How PitchBook is working to serve the needs of investors interested in sustainable investing

Register today

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VC Deals

Hyperscience hauls in $80M Series D

New York-based startup Hyperscience has raised $80 million in a round led by Tiger Global, with Bond and Bessemer Venture Partners also participating. The company makes software to automate routine business tasks. Earlier this year, Hyperscience raised a $60 million Series C and announced a threefold year-over-year increase in revenue.

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Unit21 picks up $13M

Unit21, the creator of an API-based platform that helps companies identify and investigate money laundering and fraud, has raised $13 million in a round led by A.Capital Ventures. Other participating investors include Gradient Ventures, Core VC and South Park Commons. Founded in 2018, the San Francisco-based company's customers include Coinbase, Intuit and Gusto.

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Solarea Bio collects $11M+ Series A

Solarea Bio, a developer of microbiome-based therapeutics that use bacteria, fungi and prebiotic fibers to help treat inflammatory diseases, has raised more than $11 million in a round co-led by S2G Ventures and Bold Capital Partners. Founded in 2017 and based near Boston, the biotech company is valued at around $20 million, according to PitchBook data.

Additional Investors:

Gisev Family Office, Viking Global

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Portfolio Companies

Nextdoor mulls options for going public

Nextdoor is exploring options to go public, which include an IPO, direct listing or a reverse merger with a SPAC, according to Bloomberg. The social network for neighbors is reportedly seeking a valuation of $4 billion to $5 billion. Nextdoor was valued at $2.1 billion in 2019 after raising $170 million, according to PitchBook data; its investors include Benchmark Greylock Partners, Kleiner Perkins and Tiger Global.

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Exits & IPOs

Ant Group gets approval for Hong Kong listing

Ant Group has received the go-ahead from Chinese regulators for the Hong Kong portion of its dual IPO, according to reports. Approval for the Chinese fintech company's Shanghai registration is still outstanding, although a decision is expected soon, according to Bloomberg. Ant Group is reportedly seeking a $280 billion valuation and hopes to raise some $35 billion with the dual listing, potentially resulting in the largest-ever IPO.

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Networking companies connect with $450M deal

California-based Juniper Networks has agreed to pay $450 million for 128 Technology, a fellow networking specialist. Based near Boston, 128 Technology has raised prior funding from investors including G20 Ventures and Montlake Capital, reaching a valuation of nearly $166 million in 2018, according to PitchBook data.

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Fundraising

Lee Fixel's Addition lands $1.4B

Addition, the venture firm formed by Tiger Global veteran Lee Fixel, has brought in a $1.4 billion fund, according to the Financial Times, less than four months after Addition raised $1.3 billion for a separate vehicle. The firm's portfolio includes Lyra Health and Snyk. Last year, Fixel departed Tiger Global to branch out on his own after more than a dozen years with the firm.

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Investors

Colonial Consulting rebrands as Crewcial Partners, CEO steps down

Colonial Consulting, an investment advisory firm for philanthropies and other nonprofit investors, has rebranded itself as Crewcial Partners. The New York firm, which was founded in 1980, also announced that chief executive Charlie Georgalas will step down. Dine Grullon, the firm's chief operations officer, was named interim CEO.

Chart of the Day

"Breaking down activity via region shows the UK & Ireland continued to account for the lion's share of capital raised and fund count proportions, accounting for 66.6% and 39.1%, respectively, with London dominating fund locations."

Source: PitchBook's Q3 2020 European PE Breakdown