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The Daily Pitch: VC

February 17, 2021

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

Today's Top Stories

PE powerhouses focus on fee earnings, perpetual capital

(Andriy Onufriyenko/Getty Images)

A private equity firm's earnings come from two primary routes: Management fees, where LPs pay a set fee based on the size of their investment, and performance fees, where firms take a cut of their investment returns. Lately, the five largest publicly traded PE firms have been more focused than ever on the former as a way to boost their overall earnings.

Our latest analyst note examines the recent earnings reports from Apollo Global Management, Ares Management, Blackstone, The Carlyle Group and KKR to see how all five managed to grow their fee-related earnings in 2020 on a year-over-year basis. Some key takeaways:

Perpetual capital vehicles have become a popular tool for helping firms boost their AUM and collect more management fees.

Large insurance transactions have proven particularly useful, with Apollo and KKR leading the way.

Pandemic uncertainty contributed to a healthy fundraising year, as many LPs focused on existing relationships.

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A startup made of startups: Centessa launches with $250M

(MicrovOne/Getty Images)

British VC firm Medicxi has joined with General Atlantic and other investors to create Centessa Pharmaceuticals, a drug development company with an unconventional origin story.

To form Centessa, Medicxi combined 10 biotech companies in its portfolio: ApcinteX, Capella BioScience, Janpix, LockBody, Morphogen-IX, Orexia Therapeutics, Palladio Biosciences, PearlRiver Bio, Pega-One and Z Factor. Each will continue to develop their own assets.

Cambridge, Mass.-based Centessa is launching with $250 million in Series A funding led by General Atlantic, with participation from Vida Ventures and Janus Henderson Investors, among others. The financing is one of the largest Series A rounds for a biotech company, according to PitchBook data.

Former Bristol Myers Squibb executive Saurabh Saha has been named CEO of Centessa. The company's chief scientific officer is Moncef Slaoui, a partner at Medicxi and former chief scientific adviser of Operation Warp Speed, the US government's coronavirus vaccine program.

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Recommended Reads

An interview with Bill Gates about his history of clean tech investing and his new book, which does nothing more or less than lay out the billionaire's plan for how to save the world. [The Wall Street Journal]

More and more cities across the US are struggling to make ballooning pension payments. To fill the gap, some are resorting to a strange new sort of financial maneuver. [The New York Times]

In the asset management industry, artificial intelligence isn't just for quants anymore. [Institutional Investor]

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Quick Takes


	The Daily Benchmark
	2009 Vintage Global Funds-of-Funds
	VC Deals
	Valoreo locks in $50M
	Eavor picks up $40M
	Redefine Meat cooks up $29M funding
	Menlo Ventures leads $11M round for Strata
	Portfolio Companies
	Freshworks exceeds $300M in annual subscription sales
	Exits & IPOs
	Battery recycling startup inks $1.7B SPAC deal
	Owlet Baby Care plans SPAC merger
	Amazon to buy ecommerce startup Selz
	Fundraising
	Ironspring Ventures raises $61M to invest in industrial tech
	Former a16z partner launches Atelier Ventures
	Investors
	Khosla Ventures looks to create trio of SPACs worth $1.2B

The Daily Benchmark

2009 Vintage Global Funds-of-Funds

Median IRR

13.35%

Top Quartile IRR Hurdle Rate

15.96%

1.72x

Median TVPI

Select top performers

Mesirow Capital Partners Fund X

Bay Hills Emerging Partners II

Storebrand International Private Equity IX

*IRR: net of fees

42 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

VC Deals

Valoreo locks in $50M

Valoreo has raised $50 million in seed funding from investors including Upper90, FJ Labs, Angel Ventures and Presight Capital. The startup operates as a holding company designed to acquire and manage ecommerce businesses across Latin America.

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Eavor picks up $40M

Eavor, the creator of a radiator that uses geothermal heat to produce renewable energy, has raised $40 million from investors including Bp Ventures, Chevron Technology Ventures, Temasek, BDC Capital, Eversource and Vickers Venture Partners. The Calgary-based company plans to use the funding in part to scale projects and commercialize operations.

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Redefine Meat cooks up $29M funding

Redefine Meat has raised a $29 million Series A co-led by Happiness Capital and Hanaco Ventures. The Israel-based startup is a developer of 3D printing technology that produces animal-free meat by replicating the texture and flavor of meat products. Redefine Meat plans to use the funding in part to launch its product in Europe, Asia and North America.

Additional Investors:

CPT Capital, K3 Ventures, Losa Group, Sake Bosch

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Menlo Ventures leads $11M round for Strata

Strata, the developer of a multi-cloud platform that lets companies manage identity and security policies in a central location, has raised an $11 million Series A led by Menlo Ventures. Founded in 2019, the Boulder, Colo.-based company has added Menlo Ventures partner Venky Ganesan to its board of directors.

Additional Investor:

ForgePoint Capital

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Portfolio Companies

Freshworks exceeds $300M in annual subscription sales

Freshworks, a provider of customer engagement software, has surpassed $300 million in annual recurring revenue. The Bay Area-based Salesforce rival has grown its business 40% year-over-year during the pandemic. Freshworks has raised nearly $400 million in venture funding and was valued at $3.5 billion in 2019, according to PitchBook data. Its investors include Accel, Capital G, Tiger Global and Sequoia India.

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Exits & IPOs

Battery recycling startup inks $1.7B SPAC deal

Li-Cycle, a lithium-ion battery recycling startup, has agreed to go public via a merger with blank-check company Peridot Acquisition Corp., which is sponsored by Carnelian Energy Capital. The deal values the combined company at $1.67 billion and will provide it with $615 million in gross proceeds. Based in Toronto, Li-Cycle has raised prior funding from investors including Moore Strategic Ventures.

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Owlet Baby Care plans SPAC merger

Owlet Baby Care has agreed to merge with blank-check company Sandbridge Acquisition Corporation in a deal that will value the combined entity at around $1 billion and provide it with up to $325 million in cash, including a $130 million PIPE investment. The Utah-based startup provides healthtech for babies; its flagship product is a "smart sock" baby monitor that tracks vital signs. Owlet has received prior backing from Trilogy Equity Partners, Eniac Ventures and Formation 8, reaching a valuation of $150 million in 2018, according to PitchBook data.

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Amazon to buy ecommerce startup Selz

Amazon has agreed to buy Australian ecommerce startup Selz. Financial terms of the deal were not disclosed. Selz offers features that help small businesses build ecommerce capabilities and process payments. The startup received prior funding from Adcock Private Equity and Macdoch Ventures.

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Fundraising

Ironspring Ventures raises $61M to invest in industrial tech

Ironspring Ventures has closed its debut fund with $61 million in commitments, TechCrunch reported. The Austin-based firm targets early-stage startups in sectors including construction, transportation, mining and resources, and energy. Thus far, Ironspring has invested in Mercado, Icon, Fast Radius and GoContractor, the report said.

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Former a16z partner launches Atelier Ventures

Li Jin, a former partner at Andreessen Horowitz, has launched a new $13 million fund called Atelier Ventures. The fund's investing thesis is derived from an essay Jin published in 2019 describing the "passion economy," in which people build and sustain businesses based on their personal passions. The fund has already invested in startups including Substack, Patreon and Dumpling.

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Investors

Khosla Ventures looks to create trio of SPACs worth $1.2B

Khosla Ventures has filed to launch three blank-check companies that will seek to raise a combined $1.2 billion. Khosla's plans mirror VC investors like Ribbit Capital and G Squared, which recently launched SPACs of their own. Several of Khosla's portfolio companies, including real estate tech company Opendoor and solid-state battery startup QuantumScape, agreed to merge with SPACs in recent months.

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View 526 investments »