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Mega-deals emphasize PE's ongoing embrace of investing in VC
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| Waymo, led by CEO John Krafcik, raised $3 billion in late-stage VC funding earlier this year from investors including Silver Lake, a tech-focused private equity firm. (Sean Gallup/Getty Images) |
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Over the past 10 years, the private equity industry has made an aggressive push into late-stage deals that were once solely carried out by venture capital firms.
This widespread shift across the PE landscape speaks to private equity firms' continuing diversification, with more firms executing deal types beyond traditional buyouts. It also underscores the industry's insatiable appetite for tech: |
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Mobility slows in Q3 after strong start to the year
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2020 has been a mixed bag for venture activity in mobility tech. Dealmaking was robust through June 30 despite global shutdowns, but the $7.9 billion in total capital invested in Q3 marked a drop of 30% compared to Q2 and 17% year-over-year.
Yet the potential for long-term growth in mobility tech remains, according to our latest installment of Emerging Tech Research. Once-disruptive technologies are now ingrained in consumers' everyday lives, and as the world recovers from the coronavirus crisis, the demand for low-cost and efficient mobility solutions will persist. Highlights from the report include:
- Mobility tech is experiencing a major divergence in valuations, as investors prioritize stable, late-stage companies over early-stage deals
- Tech giants are pulling ahead in the self-driving car race, as automakers have been forced to pull back amid financial pressures from the pandemic
- SPACs have emerged as a popular listing option for electric vehicle startups, driven by strong investor enthusiasm and high valuations
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A message from PitchBook Media
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What will it take to thrive next year?
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Your clients want to know how they can adapt and thrive in 2021, no matter what happens. You know how to help them do that—get your message out to 900,000-plus readers across venture capital, private equity and M&A.
By partnering with PitchBook Media, you can reach thousands of C-suite executives, managing directors and other business leaders. Share your firm's expertise or spotlight key insights with an actively growing audience across multiple channels, including:
- Placement of your message or advertising within The Daily Pitch
- Sponsorship of one of our most popular newsletters, The Weekend Pitch
- Sponsorship of PitchBook's podcast
- Content partnership and sponsorship of market-leading industry reports like the US PE Breakdown, which accumulate thousands of downloads
Connect with us to learn more |
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Airbnb has selected the Nasdaq exchange for the listing of its stock. The vacation rental company is seeking to raise around $3 billion at a valuation of more than $30 billion, Reuters reported earlier this month. This week, the company's board reportedly approved a two-for-one stock split that valued its shares at $34.88 as of Sept. 30.
Last year, Airbnb was believed to be leaning toward pursuing a direct listing, and Bill Ackman approached the business about a potential merger with his blank-check company before Airbnb confidentially filed for a public listing this past August, according to Bloomberg. |
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A $35B deal continues 2020's boom in semiconductor M&A
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| Silicon wafers are a hot target on the M&A market in 2020. (MirageC/Getty Images) |
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Chipmaking giant AMD has agreed to acquire rival Xilinx in an all-stock deal valued at $35 billion, the latest massive transaction in a year that has reshaped the landscape of the semiconductor industry.
Companies have either agreed to or completed $79 billion worth of M&A deals in the global semiconductor space so far this year, according to PitchBook data. Only once in the past 10 years has annual completed M&A deal value in the industry reached more than $60 billion, and in eight of the past 10 years it has been below $30 billion. It is unlikely all the recent deals will be completed before the year is out, making it an imperfect comparison, but 2020's run remains remarkable.
In July, Analog Devices lined up a deal to purchase fellow chipmaker Maxim Integrated Products for more than $20 billion. In September, Nvidia agreed to pay $40 billion to buy British chip designer Arm from SoftBank. And just last week, Intel agreed to sell its NAND memory unit to SK Hynix for $9 billion.
In many cases, the dealmaking has been aided by chipmaking stocks that have soared amid an increase in demand during the pandemic. AMD's shares are up some 68% since the start of 2020, while Xilinx stock is up more than 25%. |
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Genius Sports to go public via $1.5B US SPAC deal
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| The NBA is one of the leagues partnering with Genius Sports to supply betting firms with data. (Mike Ehrmann/Getty Images) |
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UK betting data provider Genius Sports plans to go public through a merger with DMY Technology Group II, a New York-listed special-purpose acquisition company, in a deal worth around $1.5 billion, including debt. The transaction is expected to close early next year. Genius Sports partners with the likes of the NBA, Premier League and PGA Tour to supply betting firms with data from sporting events.
DMY II raised $240 million in an IPO in August. It's the second vehicle launched by former EMC executive Harry You and former Glu Mobile CEO Niccolo de Masi. Its predecessor, which raised $200 million in February, agreed to merge with online gambling specialist Rush Street Interactive in July.
The deal with Genius Sports comes at a time when more investors on both sides of the Atlantic are using US-listed SPACs for European acquisitions. The UK SPAC market has been dormant this year, with blank-check companies facing hurdles including a lack of incentives, a less-friendly regulatory framework and an unsavory reputation created by ill-fated past deals. |
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The impact of the 2020 election
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Have your firm's dealmaking pace or fundraising plans changed ahead of the US presidential election? What are your biggest areas of concern ahead of a Biden presidency or a Trump second term?
We've created a short pre-election survey seeking the investor perspective (all answers are anonymous and results will only be published in aggregate):
Take the survey |
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What is Ant Group, and why is it on the brink of the biggest IPO in history? A detailed look at how the company has made itself inextricable from China's enormous economy. [The Wall Street Journal]
Vincent Ramos saw the future of encrypted messaging before other startups like Wickr and Signal. Just as important as a new technology, though, is what you decide to use it for. [Vice]
After the fall of The Abraaj Group, Investcorp is aiming to consolidate its position at the top of the heap in Middle Eastern private equity. [Bloomberg] |
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Since yesterday, the PitchBook Platform added:
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11
VC valuations
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1486
People
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390
Companies
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17
Funds
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2009 Vintage Global Venture Funds with more than $250M
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Cancer research startup snags $310M
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| Cancer research and testing startup Caris Life Sciences has pulled in $310 million. The round includes $235 million in equity funding co-led by Highland Capital Management and Coatue, and $75 million in debt from Sixth Street. The Irving, Texas-based company is a developer of molecular science that helps doctors provide personalized treatment for cancer patients. |
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Wholesale marketplace Faire hits $2.5B valuation
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| Faire has raised $170 million in a Series E led by Sequoia that values the company at $2.5 billion. Y Combinator, Lightspeed, D1 Capital Partners and others also supported the funding. Faire's new valuation is more than double the valuation it reached with a $150 million Series D in 2019. The San Francisco-based company provides a wholesale marketplace that helps connect local, independent retailers with brands and artisans. |
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Eightfold AI reaches unicorn status with mega-round
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FreshToHome picks up $121M
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| FreshToHome, the operator of an online grocery brand for fresh fish and meat products, has raised a $121 million Series C from investors including Investment Corporation of Dubai, Investcorp and Ascent Capital. Founded in 2015, the Bengaluru-based company plans to use the funding to expand its operations in India and the Middle East. |
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Ordermark lands $120M led by SoftBank
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| Ordermark, the creator of a mobile order management platform for restaurants, has secured $120 million led by SoftBank's Vision Fund 2. The Los Angeles-based startup also operates Nextbite, a portfolio of delivery-only, virtual restaurant brands. In July 2019, the company raised $18 million at a $70 million valuation, according to PitchBook data. |
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Market intelligence startup banks $120M
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| SimilarWeb, the developer of a digital market intelligence platform that analyzes online behavior, has raised $120 million in a round co-led by Ion Crossover Partners and Viola Growth. Founded in 2007, SimilarWeb was valued at $800 million in 2017, according to a PitchBook estimate. The New York-based company's customers include Walmart, P&G and Adidas. |
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DriveWealth takes in $56.7M
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| DriveWealth, the developer of an API-based digital brokerage platform, has raised a $56.7 million Series C led by Point72 Ventures. Founded in 2012, the New Jersey-based company was valued at $207 million in July, according to PitchBook data. DriveWealth's global digital trading tech is used by online brokers, digital advisers and mobile online financial services companies. |
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Eagle Eye Networks secures $40M
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| Accel has led a $40 million Series B for Eagle Eye Networks, which offers a cloud-based video surveillance platform. Founded in 2012 and based in Austin, the company was valued at $55 million in 2016, according to PitchBook data. |
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Visa's $5.3B deal for VC-backed Plaid faces antitrust review
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| Visa's purchase of fintech software startup Plaid could face opposition from the US Department of Justice, according to The Wall Street Journal. The government agency may reportedly sue to block the planned combination due to concerns over whether it prevents competition in the payments industry. Visa announced its $5.3 billion agreement to buy Plaid, which is backed by NEA, Index Ventures, Andreessen Horowitz and others, in January. |
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Exact shares soar after cancer screening deal
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| Cancer screening and diagnostics specialist Exact Sciences has agreed to acquire Thrive Earlier Detection in a cash-and-stock deal that could be worth $2.15 billion. Thrive is a fellow life sciences company focused on early cancer detection that raised $257 million in a Series B led by Casdin Capital and Section 32 earlier this year. Exact will pay $1.7 billion upon the deal's close and up to $450 million in future compensation based on certain milestones. Stock in Exact closed Tuesday up 23%. |
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General Catalyst-backed SPAC files for $500M IPO
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| A special-purpose acquisition company backed by venture capital firm General Catalyst is seeking to raise $500 million in an IPO. The SPAC, dubbed Health Assurance Acquisition, will seek to merge with a healthcare technology business. General Catalyst managing director Hemant Taneja, an early investor in Livongo, serves as the CEO of the blank-check company. |
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"Israel has one of the strongest healthcare ecosystems in the EMEA region, and GPs are increasingly leaning into the area. The sector comprised 57.8% of the country's PE deal value in H1 2020. Israel's largely public healthcare system is characterized by somewhat low healthcare costs per capita, relatively low staff churn, and strong interoperability of healthcare technology. Trends we saw prior to the pandemic across the healthcare industry have only accelerated, such as implementing technological enhancements to improve medical procedures for unmet patient medical needs."
Source: PitchBook's 2020 Israel Private Capital Breakdown |
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