PitchBook News - High hopes for a cannabis comeback

UK eyes IPO changes to entice tech titans; Roblox readies latest unicorn IPO; GSK spinout banks $500M VC fund; Forter becomes fraud prevention unicorn
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November 20, 2020
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Cannabis backers have high hopes for rebound from deal downturn
(Luke Dray/Getty Images)
After a downturn in deal activity, the cannabis industry suddenly has high hopes that a rebound is on the horizon following a string of wins by pot-legalization campaigns.

Industry backers say their fresh ballot victories come amid this year's surging sales, with stressed-out consumers in lockdown smoking more weed and gobbling up edibles infused with CBD-based ingredients.

But the venture-backed cannabis market has seen markedly lower fundraising activity in 2020, a stark reversal from the dealmaking frenzy that accompanied a legalization wave that began six years ago:
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UK revisits IPO rules to entice tech founders
New IPO rules could help keep the listing of UK-based food delivery startup Deliveroo close to home. (Hollie Adams/Getty Images)
The UK government is taking a fresh look at the rules around IPOs in an effort to make post-Brexit Britain more appealing to tech companies seeking to go public.

Allowing for dual-class share structures is one measure that would give founders more control over their companies upon listing. But that has a cost, and not everyone is a fan of the potential changes:
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A message from BMO
Education providers in the middle-market spotlight
BMO
The new look of the back-to-school season has put the focus on companies that can offer comprehensive hybrid learning solutions and a strong technology platform. Along with a look at what's happening in the education ecosystem, the current issue of Transaction Trends dives into the pandemic's impact on EBITDA adjustments and offers a close-up on the packaging industry. To conclude this issue of Transaction Trends, we provide an update on quarterly platform tuck-in volume.

To learn more, download the full issue of Transaction Trends. You can also contact Stephen R. Isaacs, Managing Director and Head of BMO Sponsor Finance, at stephen.isaacs@bmo.com.
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Roblox details COVID-era growth in IPO filing
An image of "The Wild West," one of the games on Roblox's platform. (Courtesy of Roblox)
Roblox, the creator of a platform that allows users to play and develop games online, has filed for an initial public offering. The SEC paperwork showed significant sales and active user growth, but with that came wider losses. The company was valued at $4 billion in February, according to PitchBook data.

Revenue grew to nearly $588.7 million in the nine months ended Sept. 30, a 68% year-over-year increase. But net losses more than quadrupled during that period, from $46.3 million to more than $205.8 million. More than half of Roblox's sales during this timeframe came via purchases on the Google and Apple-owned app stores, which each charge Roblox a 30% fee on in-app purchases.

Roblox's revenue steadily grew on a quarterly basis this year, notching $242.2 million in Q3, up from $189.7 million in Q2 and $156.8 million in Q1. The San Mateo, Calif.-based company also saw its daily active users gradually increase this year amid pandemic lockdown orders. Global daily active users on Roblox's platform reached 36.2 million in the third quarter, nearly double the amount of daily active users in Q3 2019.

Bookings, a metric that's primarily represented by in-game currency purchases that have not yet been recorded as revenue, hit $1.24 billion in the first nine months of 2020, nearly triple the bookings in the same period last year.

Roblox's leading stockholders include Altos Ventures, which owns 21.3% of outstanding shares, Meritech Capital (10.3%), Index Ventures (9.9%), Tiger Global (7.3%) and First Round Capital (6.3%). CEO and founder David Baszucki controls 70.7% of the company's voting power through exclusive ownership of super-voting shares.
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Recommended Reads
Who are the biggest winners of 2020's extraordinary SPAC boom? A group of investors known to some as the SPAC Mafia. [Forbes]

The concept of personal productivity has transformed the modern world of knowledge work. It might need to be transformed again. [The New Yorker]

You know about Silicon Valley. Now, the state of California wants to turn Lithium Valley into the next big thing. [Bloomberg]
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Quick Takes
  The Daily Benchmark  
  2006 Vintage Global Buyout Funds  
  People  
  Peter Thiel joins AbCellera board  
  VC Deals  
  Forter gets $125M at $1.3B+ valuation  
  Medable lands $91M  
  Sapphire leads $60M round for Verbit  
  ZenBusiness collects $55M Series B  
  Immunotherapy startup launches with $53M  
  Portfolio Companies  
  BuzzFeed to take over HuffPost in media merger  
  Exits & IPOs  
  Nasdaq strikes $2.75B financial fraud pact  
  Lightning eMotors eyes SPAC merger  
  Fundraising  
  SR One closes first independent fund  
 
 
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People
Peter Thiel joins AbCellera board
Peter Thiel has joined the board of AbCellera, the provider of an antibody discovery platform designed to prevent and treat disease. Thiel had previously participated in a $105 million Series B for AbCellera that took place in May. Backed by the Bill & Melinda Gates Foundation, the Vancouver, Canada-based startup has worked with Pfizer and Eli Lilly on antibody research. AbCellera may conduct an IPO as soon as December that would value it at several billion dollars, according to Bloomberg.
View details
 
View 105 investments »
 
VC Deals
Forter gets $125M at $1.3B+ valuation
Ecommerce fraud prevention startup Forter has raised $125 million at a valuation of more than $1.3 billion. The Series E was led by Bessemer Venture Partners and Felix Capital, with Sequoia and other backers participating. Companies such as Nordstrom, Sephora, Priceline, Instacart and Adobe use Forter's automated platform. Based in New York, the company raised a $50 million round in 2018.
Additional Investors:
NewView Capital, Scale Venture Partners, March Capital Partners, Commerce Ventures
View round
 
View 32 competitors »
 
Medable lands $91M
Sapphire Ventures has led a $91 million Series C for Medable, the developer of a decentralized clinical trial platform intended to connect patients with healthcare researchers. Existing investors GSR Ventures, PPD and Streamlined Ventures also participated in the funding.
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View 19 competitors »
 
Sapphire leads $60M round for Verbit
Verbit, the creator of an AI-based transcription and captioning platform, has pulled in $60 million. The Series C was led by Sapphire Ventures, with existing backers Vertex Ventures, Stripes, HV Ventures, ClalTech and new investor Vertex Growth also contributing to the financing. In January, the New York-based startup raised $31 million at a $126.8 million valuation, according to PitchBook data. Verbit's tech is used by the higher education, legal, media and enterprise sectors to create transcriptions and captions for live and recorded video and audio.
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ZenBusiness collects $55M Series B
ZenBusiness has raised $55 million in a round led by Cathay Innovation, with support from GreatPoint Ventures and Lerer Hippeau Ventures. The Austin-based company is a developer of digital products and tools that help entrepreneurs launch and manage micro businesses. ZenBusiness raised $15 million at a $55 million valuation in September 2019, according to PitchBook data.
Additional Investors:
Breyer Capital, Omega Venture Partners, Greycroft, Interlock Partners, Mark VC, ATX Venture Partners
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View 2 competitors »
 
Immunotherapy startup launches with $53M
Umoja Biopharma has raised $53 million in a Series A co-led by MPM Capital and Qiming Venture Partners. The Seattle-based pre-clinical-stage biotech company is developing cellular immunotherapies to treat cancer. Umoja was valued at $23 million after an $8 million seed investment from MPM and DCVC Bio in November 2019, according to PitchBook data.
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Portfolio Companies
BuzzFeed to take over HuffPost in media merger
BuzzFeed has agreed to purchase rival digital media company HuffPost from Verizon Media, with the unit of Verizon Communications taking a minority stake in BuzzFeed as part of the deal. Verizon subsidiary AOL acquired HuffPost for $315 million in 2011. The new transaction is all-stock, and Verizon Media will also make a cash investment in BuzzFeed, The Wall Street Journal reported. BuzzFeed has raised nearly $500 million in prior venture funding, according to PitchBook data.
View details
 
View 34 competitors »
 
Exits & IPOs
Nasdaq strikes $2.75B financial fraud pact
Nasdaq has agreed to pay $2.75 billion in cash to acquire Verafin, the creator of a cloud-based platform that helps financial institutions detect, investigate and report financial fraud. The Canadian company was recapitalized last year in a C$515 million (about $394 million today) deal, with new equity financing coming from Spectrum Equity, Information Venture Partners and other backers.
View details
 
View 15 competitors »
 
Lightning eMotors eyes SPAC merger
Lightning eMotors, a startup developing electrification solutions for commercial fleet vehicles, is discussing a merger with special-purpose acquisition company GigCapital3 that could value the company at between $700 million and $1 billion, according to Bloomberg. The SPAC is also trying to line up $100 million in financing to support the deal, the report said. Lightning eMotors, based in Loveland, Colo., raised $41 million in equity and debt last December in a round led by BP Ventures.
View details
 
View 13 competitors »
 
Fundraising
SR One closes first independent fund
SR One, formerly the venture capital arm of pharmaceutical giant GlaxoSmithKline, has closed its first independent fund on $500 million. The firm recently completed its spinoff from GSK, which is the largest investor in the oversubscribed fund. Based in Philadelphia, SR One will continue to seek out investments in biotech companies developing innovative medicines.
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View 130 investments »
 
Chart of the Day
"Funds sized under €100 million have only accounted for 16.4% of fund count in 2020, pacing noticeably lower than funds sized between €1 billion and €5 billion, which have contributed 22.4%. If this pace is maintained through the remainder of 2020, it will be the first time in over a decade such a difference between the counts of the two fund sizes has occurred."

Source: PitchBook's Q3 2020 European PE Breakdown
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