PitchBook News - Split decision for tech in US vote

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The Daily Pitch: VC

November 4, 2020

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

Today's Top Stories

Gig companies, consumers grab wins in US voting

Demonstrators outside of the home of Uber CEO Dara Khosrowshahi in June. (Justin Sullivan/Getty Images)

US voters weighed in on state and local ballot initiatives dealing with gig worker protections, data-privacy laws and broadband internet access.

As of late Tuesday night, the races ended in victories for companies like Uber, Instacart and Postmates on California's heavily financed Proposition 22, and several consumer-friendly measures were winning as well:

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Fintech sets quarterly record with $8.9B in venture investment

The fintech sector in North America and Europe hit its highest quarterly deal value on record in Q3 with a total of $8.9 billion, yet the deal count of 414 was the lowest in three years. With the financial services industry bracing for a recession, investors have put their money into larger deals for late-stage companies, which have secured 77% of venture capital this year.

Despite the current headwinds, the financial services industry is still ripe for disruption in the long-term, according to our latest Emerging Tech Research report, and fintech remains one of the best-funded and fastest-growing areas of emerging technology. Other highlights include:

Consumer finance has already surpassed its record 2019, with $5.9 billion invested through Q3

Cash usage fell by 8% year-over-year, a decline that Square estimated would have taken three years without the pandemic

Fintech VC exit activity continued its strong year, including multiple $1 billion-plus acquisitions announced in Q3

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A message from RBC Capital Markets

Private equity playbook: valuations, capital deployment and SPACs

With $1.5 trillion in dry powder, PE firms today are better capitalized than at any time in history.

Yet with public company valuations at significant highs relative to those for privately held businesses, this represents both challenges and opportunities for the industry. While public market transactions have become more expensive, the attraction of taking private portfolio companies public has become stronger.

How is PE shifting business and capital deployment strategies? What impact could the rise of SPACs have? How has the pandemic influenced dealmaking? Will record dry powder accelerate investment in the months ahead?

Explore the major issues impacting PE and M&A, with insights from RBC Capital Markets' expert team of investment banking professionals.

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Ant Group's $34B+ IPO postponed

The Shanghai Stock Exchange suspended the listing following a meeting Chinese regulators held with Jack Ma and Ant executives. (Lintao Zhang/Getty Images)

The $34 billion-plus IPO of Chinese fintech giant Ant Group has been postponed on both the Shanghai and Hong Kong stock exchanges, less than 48 hours before the record dual listing was set to happen.

The Shanghai Stock Exchange put the brakes on the listing late Tuesday citing regulatory changes, prompting Ant to also halt its Hong Kong debut. The SSE said the company, an affiliate of Jack Ma's Alibaba, may fail to meet listing requirements following a change in the rules. Ant had planned to sell 1.67 billion shares in Hong Kong and a similar amount on Shanghai's STAR. The IPO, expected to raise at least $34.4 billion, would have been the largest on record.

The news came shortly after Chinese regulators drafted new rules governing online micro-lending—an area in which Ant operates—in a bid to tackle rising debt in the country. According to a report from Reuters, regulators had called a meeting on Monday with Ma, Ant's co-executive chairman Eric Jing and chief executive Simon Hu to discuss Ant's online lending business and the prospect of greater scrutiny.

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Recommended Reads

After years of talking the talk, corporate clients are pressuring law firms to walk the walk when it comes to increasing diversity among their ranks. [The Wall Street Journal]

Who is notable enough to get their own Wikipedia page? It's a question that played a key role in this year's Senate election in Iowa. [Wired]

Last month, Nvidia agreed to buy Arm in a $40 billion move that would shake up the semiconductor industry. In China, though, potential obstacles for the deal are mounting. [Financial Times]

Since yesterday, the PitchBook Platform added:

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Quick Takes


	The Daily Benchmark
	2011 Vintage Global PE Funds with less than $250M
	VC Deals
	Microsoft joins $100M round for Indonesia's Bukalapak
	Fast eyes funding at $1B+ valuation
	Human API secures $20M+ Series C
	Reflektion raises $13.5M
	Exits & IPOs
	Russian ecommerce company preps US IPO

The Daily Benchmark

2011 Vintage Global PE Funds with less than $250M

Median IRR

12.96%

Top Quartile IRR Hurdle Rate

21.45%

1.48x

Median TVPI

Select top performers

COPE Opportunities 2

Levine Leichtman Capital Partners SBIC Fund

Accel-KKR Growth Capital Partners

*IRR: net of fees

26 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

VC Deals

Microsoft joins $100M round for Indonesia's Bukalapak

Indonesian ecommerce company Bukalapak is raising $100 million from Microsoft and existing investors GIC and Emtek Group in a deal that could value the company at between $2.5 billion and $3 billion, Bloomberg reported. As part of the strategic investment, Bukalapak will be hosted on Microsoft's Azure cloud platform. Founded in 2010, the company has more than 12 million offline and online sellers and some 100 million users.

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Fast eyes funding at $1B+ valuation

Fast is discussing raising between $50 million and $200 million in a round that could value the fintech company at more than $1 billion, according to The Information. San Francisco-based Fast makes software to speed up the checkout process at online stores. It has received backing from Stripe, Index Ventures and others.

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Human API secures $20M+ Series C

Human API has raised more than $20 million from investors including Samsung Ventures, Moneta VC and Allianz Life Ventures. The San Mateo, Calif.-based company is the developer of a platform that enables patients to collate health data from a network of hospitals, pharmacies, wearable devices and more.

Additional Investors:

BlueRun Ventures, CNO Financial Group, Guardian Life Insurance Company of America, Scor Life & Health Ventures

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Reflektion raises $13.5M

Reflektion, the California-based developer of a personalized customer engagement platform, has raised $13.5 million from backers including UK investor network London Technology Club, Clear Ventures, Intel Capital, Battery Ventures and Hasso Plattner Ventures. Reflektion was valued at $76 million in 2017, according to PitchBook data.

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Exits & IPOs

Russian ecommerce company preps US IPO

Russian ecommerce specialist Ozon has filed for a public offering on the Nasdaq. The company operates a retail marketplace that was used by some 11.4 million buyers in the 12-month stretch that ended Sept. 30. Baring Vostok Private Equity holds a 45.1% pre-IPO stake in Ozon, and Index Ventures owns another 6% of the company.

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Chart of the Day

"The median holding period for MM (middle market) companies also ticked up in Q2 due to various factors. We expect that trend to continue as uncertainty around valuation and earnings outlooks leads sellers to wait out the storm. Another dynamic prolonging holding periods is the gaining popularity of buy-and-build strategies, which generally take longer to complete than mainstream strategies of the past. We expect both factors to accelerate this trend of longer holding times in the near term."

Source: PitchBook's Q2 2020 US PE Middle Market Report