PitchBook News - Our VC predictions for 2021

Abcellera stock soars ~200% after IPO; Squire secures $59M in VC funding; Lidar maker Innoviz signs SPAC deal; Orbex lands $24M to fund rocket launch
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The Daily Pitch: VC
December 14, 2020
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Today's Top Stories
Pharma fundings, SPACs and our other VC predictions for 2021
The ongoing rollout of COVID-19 vaccines will help shape VC in 2021. (Karen Ducey/Getty Images)
After 2020 turned into a year nobody saw coming, trying to predict what will unfold in the next 12 months of VC dealmaking might seem like an ambitious errand. Luckily, it's one for which our analyst team is well equipped.

The rollout of vaccines and the future of the pandemic will have obvious influence on what's to come. So too will the presence of a new administration in the White House, with the potential for major changes to policies on taxes, immigration and trade. What will it all mean? Here are a few of our best guesses for what's ahead in 2021:
  • After a record-breaking 2020, biotech and pharma VC deal activity will again top $20 billion

  • Fewer than 30% of the SPACs that went public in 2020 will close an acquisition in 2021

  • The Bay Area will fall below a 20% share of US deal count for the first time
see all our VC predictions
 
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Private debt rides out crisis despite fears of loose deal terms
(Oscar Wong/Getty Images)
Amid the unprecedented economic emergency caused by the coronavirus, many private debt managers are facing their first real test since the global financial crisis. The frothy market and loose lending habits that preceded 2020 have fueled fears that some aren't prepared for a downturn—and a wave of defaults could be imminent.

Yet while there have been casualties, the industry has shown resilience, and many direct lenders have fared better than anticipated. This is especially true for those who targeted specific sectors and strategies:
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A message from Lincoln International
PE investors expect deal activity to be up in 2021—but with specific priorities, survey says
Lincoln International
In a recent survey conducted by Lincoln International, 88% of private equity investors indicate their most important objective for 2021 is deploying capital, a nearly 10-point increase from 79% in 2020.

Investors remain focused on identifying acquisition targets, with 89% expecting to be more active in buying than selling portfolio companies in 2021. However, they face the continued challenge of a supply-demand imbalance of quality businesses. Given the shortage of quality buying opportunities, investors are willing to pay higher multiples for these businesses, and Lincoln anticipates investors will work quickly to complete these deals.

For sellers, the key to success will be a quality management team that has a strong pandemic story to tell. Those who can explain the specific steps they took to manage through the crisis and unlock new potential for future growth will achieve the best outcomes.

To explore additional results of Lincoln's survey of private equity investors and outlook for 2021, click here.
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The many routes to liquidity for GP stakes investors
When an investor acquires a minority stake in a private equity firm—usually referred to as a GP stakes deal—it is often doing so for the long haul. But even asset managers with the longest horizons may eventually feel pressure around achieving some sort of liquidity from these deals. And doing so isn't always simple.

Our new analyst note takes a thorough look at the myriad possible paths to liquidity that are available to GP stakes investors, including multi-asset sales, single-asset sales, partial sales and dividend recaps. Some are more challenging, some are more feasible—but familiarity with them all may be key for GP stakes investors moving forward:
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Recommended Reads
As a teenager, Taihei Kobayashi spent two winters sleeping on the streets of Tokyo. Now, he's the CEO of a billion-dollar tech startup. [Bloomberg]

In the early days of the pandemic, life in the small town of Mitchell, S.D., went along pretty much as it always has. Then people started dying. [The Washington Post]

Some of the biggest oil and gas companies in the world have very different opinions about the industry's future. The same is true for oil and gas investors. [The Wall Street Journal]
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Quick Takes
  The Daily Benchmark  
  2015 Vintage Global Venture Funds with more than $250M  
  People  
  Benchmark adds general partner  
  VC Deals  
  Squire picks up $59M Series C  
  Orbex lands $24M to fund rocket launch  
  Exits & IPOs  
  Roblox, Affirm pause IPO plans  
  AbCellera soars nearly 200% in market debut  
  Lidar maker Innoviz to merge with SPAC  
  Lightning eMotors to go public via SPAC merger  
 
 
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The Daily Benchmark
2015 Vintage Global Venture Funds with more than $250M
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Summit Partners Venture Capital Fund IV
Trinity Ventures XII
OrbiMed Private Investments VI
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People
Benchmark adds general partner
Miles Grimshaw has signed on with Benchmark as a general partner. The 29-year-old investor placed early bets on Airtable, Segment and Benchling, and was previously a general partner at Thrive Capital.
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VC Deals
Squire picks up $59M Series C
Squire has raised $59 million in a round led by Iconiq Capital, with participation from investors including Tiger Global and Trinity Ventures. The New York-based company develops barbershop management software designed to help barbers operate their businesses with cashless transactions. In June, Squire raised a $34 million Series B at an $85 million valuation, according to PitchBook data.
Select Additional Investors:
CRV, SoftBank
View round
 
View 2 competitors »
 
Orbex lands $24M to fund rocket launch
Octopus Ventures and BGF have led a $24 million investment in UK-based space launch company Orbex. The capital will go toward funding the first launch of the environmentally sustainable Orbex Prime rocket, which is expected in 2022.
Existing Investors:
Elecnor, Heartcore Capital, High-Tech Gründerfonds
View round
 
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Exits & IPOs
Roblox, Affirm pause IPO plans
Roblox and Affirm, two high-valued tech companies that were poised to go public soon, are putting off their planned IPOs in light of the bullish debuts last week by Airbnb and DoorDash. Roblox, an online videogame company, and Affirm, a consumer lending platform that was valued last year at $2.9 billion, had been expected to join an end-of-year IPO stampede. But both companies are now looking to get back on track early next year, The Wall Street Journal reported. Affirm's reasons for postponing were unclear. As for Roblox, the decision allows the company time to adjust its deal's pricing and other matters in line with the intense investor appetite that has greeted new issues coming to market, the Journal reported. Roblox has raised more than $335 million, most recently at a $4 billion valuation in February, according to PitchBook.
View details
 
View 18 competitors »
 
AbCellera soars nearly 200% in market debut
Stock in AbCellera, the biotech company co-developing a COVID-19 antibody treatment with Eli Lilly, surged some 195% on its first day of trading on the Nasdaq. The company's closing stock price on Friday was $58.90 per share. It raised $483 million after pricing its shares at $20 apiece. AbCellera's investors include Peter Thiel, DCVC Bio and Viking Global.
View details
 
View 44 competitors »
 
Lidar maker Innoviz to merge with SPAC
Innoviz Technologies plans to go public by merging with special-purpose acquisition company Collective Growth. The deal gives Innoviz a total of $350 million in gross proceeds, including a $200 million PIPE investment led by Antara Capital, with support from Magna International, Phoenix Insurance and others. Innoviz is working with BMW to bring its light detection and ranging technology for autonomous vehicles to market. The startup's existing investors include China Merchants Capital, SoftBank and Samsung.
View details
 
View similar company »
 
Lightning eMotors to go public via SPAC merger
Electric vehicle maker Lightning eMotors has agreed to merge with GigCapital3, a blank-check company. The Loveland, Colo.-based startup is developing battery- and fuel cell-powered vans, buses and trucks. Lightning eMotors will be valued at around $823 million in the deal, which includes a $125 million PIPE investment from existing investor BP Technology Ventures and others.
View details
 
View 14 competitors »
 
Chart of the Day
Source: PitchBook's Q3 2020 North American M&A Report
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