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The Daily Pitch: VC

March 22, 2021

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

Today's Top Stories

Venture debt growth reaching all areas of VC market

(siraanamwong/Getty Images)

Equity financing is among the most expensive forms of capital. Selling an early stake for a few hundred thousand dollars can cost a company millions when it exits.

Debt, on the other hand, can be cheap. The venture debt market has boomed, with VC-backed companies taking on more than $80 billion in loans and other debt products over the past three years, according to our latest analyst note. Key takeaways include:

Debt is growing faster than the broader VC market, reaching a record value of $28.2 billion in 2019 and nearly matching that in 2020.

Last year, venture-backed companies used debt products nearly 3,000 times, often in tandem with equity funding.

The largest proportion of venture debt goes to tech companies, who borrowed nearly $18 billion in 2020.

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LPs bend their own rules in a bid to bet on emerging fund managers

(David Malan/Getty Images)

It has been challenging for limited partners to invest in emerging managers amid the pandemic, but the allure of outsize returns has inspired investors to rethink who they're connecting with.

In 2020, emerging managers accounted for just 11.7% of PE capital raised globally, down from 18% in 2019, according to a recent PitchBook report.

But the data also showed that as of Q2 2020, 17.7% of first-time funds had an IRR of over 25%.

LPs may consider co-investing alongside GPs, but the opportunities can be scarce when it comes to highly sought-after managers.

Recommended Reads

As SPACs have continued with their extraordinary dealmaking frenzy, they're pulling out all sorts of tactics to make deals with target companies. [The New York Times]

The real estate market is red hot, and many lenders are backing home flippers. But what happens when and if a housing bust occurs? [Bloomberg]

How the pandemic supercharged the advertising success of Google, Facebook and Amazon. [The Wall Street Journal]

Since yesterday, the PitchBook Platform added:

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Quick Takes


	The Daily Benchmark
	2007 Vintage Global Venture Funds
	VC Deals
	Turkey's Getir hits $2.6B valuation with Sequoia backing
	Ethnic grocer raises $315M led by DST Global
	OpenSea sails away with $23M
	3D printing company brings in $20M
	OpenReel collects $19M for video creation platform
	Portfolio Companies
	UBiome founders charged with fraud
	Exits & IPOs
	Rockley Photonics to go public via SPAC merger
	Fundraising
	Juxtapose lands $300M for Fund II

The Daily Benchmark

2007 Vintage Global Venture Funds

Median IRR

8.40%

Top Quartile IRR Hurdle Rate

15.55%

1.76x

Median TVPI

Select top performers

Avalon Ventures VIII

Emergence Capital Partners Fund II

Foundry Venture Capital 2007

*IRR: net of fees

63 Funds in Benchmark »

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VC Deals

Turkey's Getir hits $2.6B valuation with Sequoia backing

Grocery delivery startup Getir is raising $300 million at a $2.6 billion valuation in a round co-led by Sequoia and Tiger Global, Business Insider reported. Istanbul-based Getir was valued at $850 million in January, according to a PitchBook estimate.

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Ethnic grocer raises $315M led by DST Global

Weee!, the operator of an online marketplace specializing in ingredients for Asian and Hispanic cuisines, has raised a $315 million Series D led by DST Global. New investors that took part in the round include Blackstone, Arena Holdings and Tiger Global. Weee! has secured over $415 million in funding thus far and was valued at $635 million last August, according to PitchBook data.

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OpenSea sails away with $23M

OpenSea has raised a $23 million Series A led by Andreessen Horowitz, with participation from several angel investors. Founded in 2017, the New York-based company is the operator of a peer-to-peer marketplace for crypto assets such as art, trading cards and collectibles.

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3D printing company brings in $20M

Fortify has raised a $20 million Series B led by Cota Capital, with participation from Accel, Neotribe Ventures and Prelude Ventures. The Boston-based company is the developer of a digital composite manufacturing platform for the 3D printing industry. Founded in 2016, Fortify was valued at $28.6 million in 2019, according to PitchBook data.

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OpenReel collects $19M for video creation platform

OpenReel has raised a $19 million Series A led by Five Elms Capital. The New York-based company is the developer of a video creation platform that helps remote teams throughout the world record and collaborate on content. OpenReel, which is also backed by investors including Brooklyn Bridge Ventures and Forefront Ventures, was valued at $13.7 million in 2019, according to PitchBook data. The startup works with consumer brands, media companies and other agencies.

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Portfolio Companies

UBiome founders charged with fraud

The founders of bankrupt microbiome health startup UBiome have been charged with fraud by the SEC and a federal grand jury. The SEC complaint alleged that Jessica Richman and Zachary Apte deceived private investors during the company's Series C in 2018, which was led by OS Fund, with 8VC, Y Combinator and Dentsu Ventures participating. Apte and Richman were also indicted by a federal grand jury in California on charges of conspiracy to commit securities fraud, money laundering and other offenses.

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Exits & IPOs

Rockley Photonics to go public via SPAC merger

Chip supplier Rockley Photonics has agreed to go public by merging with a blank-check company, SC Health Corp. The deal values the combined company at $1.2 billion. Rockley has raised capital from investors like Applied Ventures, the venture arm of Applied Materials, SIG-I Capital and Morningside Ventures.

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Fundraising

Juxtapose lands $300M for Fund II

New York-based Juxtapose has closed its latest namesake fund with $300 million in commitments. The tech-focused VC firm's portfolio includes dentistry startup Tend, real estate platform operator Orchard, and Great Jones, a property management startup. Juxtapose was founded in 2015.

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