Inside the unusual unicorn class of 2020

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The Daily Pitch: VC

November 6, 2020

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

Today's Top Stories

2020's unicorns highlight shift in venture capital funding trends

(Annie Spratt/Unsplash)

MDLive, Whoop and Remitly are just a few of the 71 startups in the US that have reached a valuation of $1 billion or more so far this year.

As the pandemic has increased demand in certain sectors like fintech and healthcare, investors and VC funding have followed:

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Pandemic's shadow won't tarnish the bright future of foodtech

As the months go by, the pandemic continues to dramatically disrupt the foodtech industry. Consumer demand for delivery options has surged, supply chain challenges for meat and dairy products have raised the profile of plant-based alternatives, and meal kits have gotten a second chance.

However, venture investment in foodtech dropped for the third straight quarter, falling 31% over Q2 to top out at $2.6 billion, according to our Q3 Emerging Tech Research report on the sector. Nevertheless, our analysts see it as a long-term opportunity. Other report highlights include:

Since the start of 2019, VCs have invested $84.8 billion in the foodtech sector

Startups in two areas, bio-engineered foods and food suppliers, accounted for 70% of last quarter's deal activity

Ghost kitchens are reshaping delivery but may struggle in the short term amid health restrictions due to the coronavirus

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A message from BDO

PE sticks by SaaS through downturn

SaaS has shined as one of the success stories of private equity investment and exits in a year of historic challenges. The COVID-19 pandemic and rapid shift to remote work led many organizations to rely heavily on SaaS to help them successfully make the switch, causing interest in the sector to rise considerably.

But investment in SaaS is far from its peak. PE firms have long valued the predictable, subscription-based revenue model that is easily scalable without the need for too much extra capital. SaaS exits are also outperforming. Now, with ROI proven in the midst of a pandemic, SaaS is even more attractive as a still-uncertain economic future looms.

Find out why PE should keep an eye on SaaS in 2021.

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US moves to block Visa's Plaid acquisition

(Karl Tapales/Getty Images)

The US Justice Department's antitrust division has sued to block Visa's $5.3 billion purchase of fintech analytics startup Plaid, calling the move an attempt to take out a nascent competitor.

San Francisco-based Plaid has raised more than $300 million from venture investors including Andreessen Horowitz, Index Ventures, NEA and Goldman Sachs, as well as Visa, according to PitchBook data.

Visa has touted the January deal, which would be one of the largest fintech acquisitions on record, as an opportunity to facilitate connectivity between financial institutions and developers. But buying Plaid was really designed to protect Visa's monopoly in processing online payments, according to the government suit.

In a statement, Visa vowed to defend the deal, calling the government complaint "legally flawed and contradicted by the facts."

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Let's talk about race: Live video event

(Our panelists, from left: Matheny, Eggers, Muller, Lambert)

You're invited to join PitchBook News on Nov. 12 for a live, interactive conversation on the evolving role that investors play in addressing diversity and equality issues across the private markets. Speakers include:

Lisa Lambert, president and founder of National Grid Partners, and former head of Intel Capital's diversity fund

Barry Eggers, founding partner, Lightspeed

Cynthia Muller, director of mission-driven investment, WK Kellogg Foundation

Angela Matheny, diverse-manager consultant, Crewcial Partners

The event will be moderated by Alexander Davis, PitchBook News' executive editor, and Hilary Wiek, a PitchBook senior analyst

RSVP today to join us

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Recommended Reads

Dunkin' Brands was the target of a recent $11.3 billion acquisition. But overall, the pandemic has been bad news for fast food's bet on breakfast. [The Wall Street Journal]

Discord was founded with the idea of giving gamers a better way to communicate. It's turned into a whole lot more. [Protocol]

The unraveling of Ant Group's planned $35 billion IPO is a sign of the friction continuing to build between fintech upstarts and the world's traditional financial elite. [Bloomberg]

Since yesterday, the PitchBook Platform added:

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Quick Takes


	The Daily Benchmark
	2018 Vintage US PE Funds
	VC Deals
	ByteDance eyes new cash at $180B valuation
	Vimeo raises $150M, may be spun off by IAC
	Cytek Biosciences picks up $120M
	Ayar Labs nabs $35M Series B
	Exits & IPOs
	Airbnb to reveal IPO filing next week
	Merck to pick up cancer therapy startup for $2.7B+
	Payments specialist ShopKeep sells for $440M
	GoPuff to grab BevMo! for $350M
	Cannabis company strikes $300M brewery deal
	TikTok rival Kuaishou files for Hong Kong IPO

The Daily Benchmark

2018 Vintage US PE Funds

Median IRR

2.63%

Top Quartile IRR Hurdle Rate

13.71%

1.02x

Median TVPI

Select top performers

Nexus Special Situations II

The Resolute Fund IV

Clearlake Capital Partners V

*IRR: net of fees

94 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

VC Deals

ByteDance eyes new cash at $180B valuation

TikTok's parent company, ByteDance, is in talks to raise $2 billion, which would increase its valuation to $180 billion, according to Bloomberg. Beijing-based ByteDance is reportedly discussing the funding with a group of investors that includes Sequoia. After the funding, the company could begin preparing Hong Kong listings for two of its units: Douyin, the Chinese version of TikTok, and Toutiao, an AI-driven news service.

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Vimeo raises $150M, may be spun off by IAC

Vimeo, the provider of a video-streaming platform that's used by corporate marketers, has raised $150 million from Thrive Capital and GIC. The New York-based company is also being considered for a spinoff to shareholders, corporate parent IAC said. In a letter to shareholders, IAC CEO Joey Levin said the company has begun "contemplating" spinning off Vimeo after learning of strong investor appetite in the unit, which he said raised the latest funding at an implied valuation of $2.75 billion.

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Cytek Biosciences picks up $120M

Cytek Biosciences has raised a $120 million Series D co-led by RA Capital and Hillhouse Capital, with participation from OrbiMed and Lyfe Capital. The California-based company is a developer of cell analysis instruments for scientists and clinicians working in fields such as immunotherapy, immuno-oncology and infectious diseases. Cytek was valued at $307.5 million in 2018, according to a PitchBook estimate.

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Ayar Labs nabs $35M Series B

Ayar Labs, a developer of photonics-based optics and lasers, has raised $35 million in a round co-led by Downing Ventures and BlueSky Capital. The Bay Area-based company was valued at $53.6 million in 2018, according to PitchBook data.

Select Additional Investors:

Lockheed Martin Ventures, Founders Fund, Applied Ventures

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Exits & IPOs

Airbnb to reveal IPO filing next week

Home rental giant Airbnb is planning to make its IPO filing public next week, according to Reuters. The company reportedly plans to set an offering price range and begin an investor roadshow in December. Airbnb's IPO is said to be one of the biggest this year, with a goal of raising some $3 billion at a valuation north of $30 billion.

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Merck to pick up cancer therapy startup for $2.7B+

Merck has agreed to acquire San Diego-based VelosBio for $2.75 billion in cash. The startup, which develops cancer therapies, was valued at $375 million in July after it secured a $137 million Series B led by Matrix Capital Management and Surveyor Capital, according to PitchBook data. The acquisition is expected to close by the end of the year.

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Payments specialist ShopKeep sells for $440M

Ecommerce software company Lightspeed POS has bought cloud commerce platform provider ShopKeep for about $440 million in cash and stock. New York-based ShopKeep allows over 20,000 retailers and restaurants in the US to accept any payment type and offers services like automatic inventory tracking, employee management and real-time sales reporting. The company has previously been backed by Tribeca Venture Partners, Salesforce and others.

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GoPuff to grab BevMo! for $350M

Delivery startup GoPuff has agreed to buy alcoholic beverage retailer BevMo! for $350 million as it makes a push into California. GoPuff plans to add the retailer's 161 stores in California, Arizona and Washington to its growing micro-fulfillment center network. Last month, GoPuff raised $380 million at a $3.9 billion valuation. Concord, Calif.-based BevMo! was bought by private equity firm TowerBrook Capital Partners in 2007.

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Cannabis company strikes $300M brewery deal

Canadian cannabis company Aphria has agreed to pay about $300 million to acquire SweetWater Brewing, a craft brewing company based in Atlanta whose products include beers that use terpenes to mimic the scent and flavor of cannabis. TSG Consumer Partners will sell its stake in SweetWater in the deal.

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TikTok rival Kuaishou files for Hong Kong IPO

Short-video platform provider Kuaishou has filed for an IPO in Hong Kong, according to the South China Morning Post. Based in Beijing, Kuaishou chose to list in its home country due to increased censorship of Chinese companies by the US, the report said. The TikTok rival, backed by Chinese tech giants Tencent, Alibaba and Baidu, is reportedly worth over $30 billion.

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