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The Daily Pitch: VC

January 11, 2021

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Today's Top Stories

What Democratic control of the Senate could mean for VC

Sen. Chuck Schumer will take over as Senate majority leader following Democratic victories in Georgia.
(Win McNamee/Getty Images)

President-elect Joe Biden's legislative agenda got a boost after Democrats won a slight majority in the Senate last week.

Many venture capitalists and lobbyists expect ambitions to be tempered by the party's slim hold on power. But action on Democratic priorities like climate change, immigration and taxes could spell changes regarding investment and innovation in high-growth startups.

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Second round of PPP loans begin

The Small Business Administration has begun accepting applications for the second round of loans from the Payment Protection Program.

The $900 billion pandemic relief bill signed into law at the end of last year by President Trump allocated $284 billion for the program. First-time borrowers are still bound by the terms of the initial round. This time around, loans are capped at $2 million, down from the previous $10 million maximum.

Companies seeking a second loan must meet certain qualifications, such as having no more than 300 employees, and show that revenue declined at least 25% in any quarter in 2020 compared with 2019. Re-applying companies should have also used the full amount of their first loan by the time they receive the second.

During the first two days of the loan application period, priority will be given to small businesses in low-income communities that may not have gotten access to funds in the first round. Only community financial institutions will be able to initiate loan applications starting Jan. 11 and offer funds to reapplying companies Jan. 13. After that date, the program will open to all participating lenders.

Over 145,000 privately backed companies received a PPP loan last year, according to PitchBook data.

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A message from West Monroe

Outlook remains strong for high-tech and software M&A in 2021

Despite uncertainty, the appetite for deals in the high-tech and software sector is anticipated to increase in 2021. Are you ready to seize opportunities?

A recent survey revealed that 70% of investors plan to acquire as many as two high-tech and software companies over the next 24 months, and 27% intend to make three or four acquisitions. Competition within this sector will only increase. But high multiples, a crowded space, and unique integration and differentiation challenges make the path to payoff more difficult. Successful dealmaking in this environment requires a rigorous approach to strategy, due diligence, deal execution and post-deal integration.

Access the latest report detailing trends, top subsectors and opportunities for value creation in the TMT industry.

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GIP grabs Bill Gates-backed Signature Aviation for $4.6B

Bill Gates' Cascade Investment previously supported Blackstone's bid.
(Alex Wong/Getty Images)

Global Infrastructure Partners has agreed to acquire London-listed private jet operator Signature Aviation for $4.63 billion, defeating rival bids from Blackstone and The Carlyle Group.

On Friday, Blackstone said it had won the support of Bill Gates' Cascade Investment, which already holds a 19% stake, to buy the company for around $4.3 billion. Sky News reported last week that Carlyle was considering a £3 billion (around $4 billion) bid.

The new offer of 405 pence a share represents a 51% premium over the company's 268 pence share price on Dec. 16, the day before the offer period began. Shares in Signature opened at 428 pence on Monday morning, up over 5% from the previous closing price, and reached as high as 445 pence by midmorning.

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Recommended Reads

Nearly 50 years later, the real story of how The New York Times got its hands on the Pentagon Papers has come to light. [The New York Times]

As the pandemic continues to redraw the map of finance and tech, Blackstone has become the latest major Wall Street name to set its sights on Miami. [Institutional Investor]

It's been a little more than a year since Coty acquired a majority stake in Kylie Cosmetics, the brand run by superstar Kylie Jenner. So far, the results are mixed. [The Wall Street Journal]

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Quick Takes


	The Daily Benchmark
	2018 Vintage Global Real Assets Funds
	VC Deals
	Affinivax collects $226M
	Dice Molecules secures $80M
	Carrum Health raises $40M
	Portfolio Companies
	Roku confirms deal to buy Quibi's content
	Exits & IPOs
	Red Hat agrees to acquire StackRox
	Fundraising
	Ludlow Ventures plans $65M vehicle

The Daily Benchmark

2018 Vintage Global Real Assets Funds

Median IRR

1.29%

Top Quartile IRR Hurdle Rate

7.00%

0.98x

Median TVPI

Select top performers

Rockland Power Partners III

Kayne Private Energy Income Fund II

Merit Energy Partners K

*IRR: net of fees

47 Funds in Benchmark »

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VC Deals

Affinivax collects $226M

Affinivax has raised a $226 million Series C co-led by Rock Springs Capital and Foresite Capital. Based in the Boston area, the biopharma company is developing vaccines to prevent a range of infectious diseases. In April 2020, the company raised $120 million at a $345 million valuation, according to PitchBook data.

Select Additional Investors:

BlackRock, EcoR1 Capital, T. Rowe Price, Viking Global Investors

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Dice Molecules secures $80M

RA Capital Management has led an $80 million Series C for Dice Molecules, a biopharmaceutical company that focuses on immunology. The company plans to use the funding in part to advance clinical trials of one of its oral medicines.

Select Additional Investors:

Northpond Ventures, New Leaf Venture, Sanofi Ventures

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Carrum Health raises $40M

Carrum Health has closed a $40 million Series A led by Tiger Global, with participation from GreatPoint Ventures, Cross Creek, Wildcat Venture Partners and SpringRock Ventures. The San Francisco-based company is the developer of a healthtech platform that connects self-insured employers and providers.

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Portfolio Companies

Roku confirms deal to buy Quibi's content

Roku has acquired the distribution rights to programming created by Quibi, the failed streaming startup that raised $1.75 billion before shutting down last year. The deal gives Roku a catalog of more than 75 shows and documentaries, which feature performances by celebrities like Chrissy Teigen, Kevin Hart and Idris Elba. Roku paid less than $100 million for the rights, The Wall Street Journal reported.

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Exits & IPOs

Red Hat agrees to acquire StackRox

Open-source software provider Red Hat has secured a deal to buy StackRox, an enterprise cybersecurity specialist based in Mountain View, Calif. StackRox has raised more than $60 million in prior venture funding from investors including Redpoint Ventures, Sequoia and Amplify Partners, including a $26.5 million round that closed in September.

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Fundraising

Ludlow Ventures plans $65M vehicle

Detroit-based Ludlow Ventures has set a $65 million target for its latest fund, according to an SEC filing. The firm was an early investor in Honey, the operator of a coupon-finding service that PayPal acquired last year for $4 billion, and its current portfolio includes 100 Thieves, an esports startup that was valued at $160 million in 2019 and is also backed by the rapper Drake, Marc Benioff and Sequoia.

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