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The Daily Pitch: VC

February 9, 2021

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Today's Top Stories

Reddit doubles valuation in new round

Reddit is seizing its moment in the sun for a big step-up in valuation.

The social media and content sharing platform is now valued at $6 billion, CEO Steve Huffman told The Wall Street Journal. The new valuation, stemming from a $250 million Series E deal from new and existing investors, is double where it stood a year ago.

Reddit's new round comes just after its platform found itself in the spotlight thanks to the exploits of sub-Reddit group WallStreetBets, which orchestrated the trading frenzy in shares of GameStop and other underdog stocks.

Reddit, which reported having over 50 million daily users, said it plans strategic investments in video, advertising, consumer products and entering international markets.

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Understanding how access to alternative assets is opening to the masses

(Chip Somodevilla/Getty Images)

With value hard to find in the public markets, it should be no surprise that demand is only growing to make alternative strategies more available to those historically excluded due to wealth and income restrictions.

But access to the private markets has some exciting new developments, according to our latest analyst note. Highlights from the research:

New regulations have already begun to democratize access to alt strategies

Some alts products mitigate concerns of illiquidity

A brief history on how the definition of "the masses" has evolved

read it now

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A message from NSF

Invention to impact

Boston Metal uses electrons instead of coal to produce cleaner, cheaper and greener steel and stainless steel. The MIT spinout recently raised $50 million.

Boston Metal (NSF-1345571) is one of hundreds of deep tech startups funded annually by the National Science Foundation, a government agency that plays a central role in accelerating discoveries into the marketplace.

Each startup can receive up to $1.75 million to support translational R&D. NSF helps teams navigate the earliest stages of technology translation, investing roughly $200 million annually in startups. In the last five years, these companies have gone on to raise billions in follow-on capital, and the portfolio has had 100-plus exits.

Learn more about NSF funding for startups at seedfund.nsf.gov.

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Vision Fund mints 'golden eggs' for SoftBank

(Courtesy of SoftBank)

A soaring stock market and high-performing tech IPOs have propelled SoftBank to record a profit of 1.17 trillion yen (about $11 billion) for the three months ending Dec. 31.

The Vision Fund segment was responsible for 844.1 billion yen in net income for the quarter, led by stakes in DoorDash and Uber. SoftBank's unrealized gain on DoorDash stood at nearly $9 billion as of Dec. 31, more than 13 times its initial investment in the company.

"We are producing golden eggs," CEO Masayoshi Son said during an investor presentation, likening the firm's strategy of backing highly valued startups to the story of a mythical goose. SoftBank recently expanded its playbook with the planned launch of several blank-check companies and the debut last year of SB Northstar, a trading division that posted a quarterly loss of 169.8 billion yen.

Nagraj Kashyap, the former head of Microsoft's M12, will be joining the Vision Fund as managing partner, according to a SoftBank spokesperson. The appointment follows a string of departures from the fund, including managing partner Jeff Housenbold and COO Ruwan Weerasekera.

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On the podcast: Wrapping up Season 2 of 'In Visible Capital'

Over the course of this season, we took a closer look at how the pandemic shaped emerging technology trends. "In Visible Capital" host Lee Gibbs spoke with founders, investors, PitchBook analysts and other experts over the course of several months, discussing topics from healthcare to the supply chain.

Sponsored by Gray Scalable, the Season 2 finale features Paul Condra, the head of PitchBook's Emerging Technology Research team, who joins the podcast to discuss:

The acceleration of infosec, enterprise software and telehealth startups amid COVID-19

What kinds of startups are receiving funding

The overall shift toward investing at later stages

listen now

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Nexthink tops $1.1B valuation with mega-round

Nexthink has raised a $180 million Series D led by Permira, valuing the company at $1.1 billion. Existing investors including Highland Europe and Index Ventures also participated in the funding.

Founded in 2004, Nexthink helps companies monitor and improve software performance on their employees' devices in real time. Its technology is used by more than 1,000 global customers, including 3M, UBS and Mercedes-Benz.

The rise of remote working helped the company's annual recurring revenue reach more than $100 million last year. In 2018, the company raised $85 million at a $558.5 million valuation, according to a PitchBook estimate.

The company, which is headquartered in Boston and Lausanne, Switzerland, plans to use the new capital in part to expand operations across the US. Nexthink also added Permira senior adviser and former Adobe CEO Bruce Chizen to its board of directors.

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Recommended Reads

A look at what investors lose in an undeveloped secondary market. [Institutional Investor]

With the click of a mouse, one can "visit" Budapest, Zurich, Paris or any number of other geographical locations. The pandemic lockdown has only served to increase the popularity of Google street view. [The New Yorker]

New research demonstrates how government censorship can affect AI algorithms and the apps that they help build. [Wired]

Since yesterday, the PitchBook Platform added:

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Quick Takes


	The Daily Benchmark
	2010 Vintage Global PE Funds
	VC Deals
	Kong collects $100M Series D
	Cabin booking startup locks in $41.7M Series C
	Portfolio Companies
	TikTok plans ambitious US ecommerce push
	Exits & IPOs
	Oscar gears up for IPO
	Hippo eyes public listing via SPAC
	Decibel Therapeutics sets IPO terms
	DoorDash to buy robotics startup Chowbotics
	Fundraising
	Construct Capital closes inaugural fund on $140M
	Investors
	New VC firm Panoramic launches, targets $300M fund

The Daily Benchmark

2010 Vintage Global PE Funds

Median IRR

11.80%

Top Quartile IRR Hurdle Rate

19.01%

1.47x

Median TVPI

Select top performers

Ticonderoga KI

Seaport Capital Partners IV

Northcreek Mezzanine Fund I

*IRR: net of fees

74 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

VC Deals

Kong collects $100M Series D

Kong has raised $100 million in a round led by Tiger Global at a $1.4 billion valuation. Index Ventures, CRV, GGV Capital, Andreessen Horowitz and Goldman Sachs also participated in the funding. Based in San Francisco, the cloud connectivity company is the developer of an API management platform and other related technology. Kong was valued at $478 million in 2019, according to PitchBook data.

View round

View 37 competitors »

Cabin booking startup locks in $41.7M Series C

Getaway has closed a $41.7 million round led by Certares, with support from existing backers. The company's platform, which lets users rent tiny cabins located less than two hours from major US cities, saw its bookings increase by some 150% year-over-year during 2020. In 2019, Getaway raised $22.5 million at a $62 million valuation, according to PitchBook data.

View round

View similar company »

Portfolio Companies

TikTok plans ambitious US ecommerce push

TikTok has goals to expand into the US ecommerce market, the Financial Times reported. The short-form video app maker is reportedly rolling out a host of new features this year, including allowing its most popular users to link to products and earn commissions on sales and letting brands showcase a catalogue of their products on the platform. Another feature includes "livestreamed" shopping, a mobile version of television shopping channels, the report said.

View details

View 16 competitors »

Exits & IPOs

Oscar gears up for IPO

Oscar, the health insurance startup co-founded by Joshua Kushner, has filed for an IPO. Oscar has raised over $1 billion in private funding, according to PitchBook data, with the company's backers including Founders Fund, Kushner's Thrive Capital, General Catalyst and Alphabet. The company, which had 529,000 members as of Jan. 31, plans to list its shares on the NYSE.

View details

View 17 competitors »

Hippo eyes public listing via SPAC

Home insurance startup Hippo has held talks with blank-check company Reinvent Technology Partners about a merger that could value the combined entity at more than $5 billion, Bloomberg reported. Reinvent is led by Zynga founder Mark Pincus and LinkedIn co-founder Reid Hoffman. Last November, Hippo raised $350 million from Mitsui Sumitomo Insurance; it's also backed by other investors including Comcast Ventures and Fifth Wall.

View details

View 26 competitors »

Decibel Therapeutics sets IPO terms

Decibel Therapeutics, a developer of treatments for hearing loss and balance disorders, has decided on an expected price range of $16 to $18 per share for its upcoming IPO of 5.9 million shares, according to an SEC filing. A midpoint pricing would raise $100 million and value the company at about $393 million. Decibel is backed by Third Rock Ventures (18.2% pre-IPO stake), OrbiMed (19%) and Regeneron Pharmaceuticals (12.2%), among others. The Boston-based company plans to trade on the Nasdaq under the symbol DBTX.

View details

View 12 competitors »

DoorDash to buy robotics startup Chowbotics

DoorDash has reached a deal to acquire Chowbotics, a venture-backed maker of robotic food-preparation technology, for an undisclosed sum. Chowbotics, based in Hayward, Calif., was valued at $46 million following a private funding round in 2018, according to PitchBook data. The company previously raised about $17 million from investors including Techstars and Foundry Group.

View details

View 3 competitors »

Fundraising

Construct Capital closes inaugural fund on $140M

Construct Capital has closed its first early-stage fund with $140 million in commitments. Thus far, the firm has invested in Copia, Tradeswell, ChargeLab and Chef Robotics. Former NEA partner Dayna Grayson and Rachel Holt, one of Uber's first employees, started Construct Capital last year.

View fund

View 2 investments »

Investors

New VC firm Panoramic launches, targets $300M fund

Panoramic Ventures, a new Atlanta-based venture capital firm, has been formed through a partnership between investor Paul Judge and BIP Capital. The firm also announced plans to raise a $300 million fund. Panoramic aims to invest in companies in the US Southeast and Midwest, with a focus on funding underrepresented founders.

View details

View investment »

Chart of the Day

"M&A take-private activity proved stale in 2020. The deal type has been on a downward trend since 2016, with take-private M&A volume clocking its lowest-ever reading in 2020. Several market headwinds made take-privates challenging to execute in 2020, including the pandemic, Brexit, and increased government scrutiny of foreign takeovers."

Source: PitchBook's 2020 Annual European M&A Report

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