PitchBook News - Exploring a frothy buyouts market

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The Daily Pitch: VC

March 30, 2021

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Today's Top Stories

Tracking a frothy buyouts market

(Paper Boat Creative/Getty Images)

For the first time in over a decade, the US and Europe are seeing a significant gulf in buyout multiples. In a new research note, PitchBook analysts explore what's driving the valuation differentials, which have big consequences for GP returns across the private equity industry. Key takeaways include:

US buyout prices during the pandemic have surged to record highs while Europe's declined, a sign of each market's comparative resilience.

Buyout valuations in Europe's biggest markets have come closer in line with each other, as the UK's buyout multiples dropped while those in France and Germany increased.

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Deliveroo cuts IPO range amid investor concerns

(Jack Taylor/Getty Images)

Deliveroo will price its upcoming IPO toward the bottom of its intended price range, blaming volatile market conditions.

The news comes at a time when many high-profile investors are stepping away from the offering, citing concerns over how workers are paid and the planned dual-class share structure.

A number of the UK's largest investors, including Legal & General Investment Management, Aviva Investors, Aberdeen Asset Management and M&G, said that they will not participate in the offering, the Financial Times reported.

Gig worker compensation has been under greater scrutiny since the UK's Supreme Court ruled that Uber drivers must be treated as workers rather than as self-employed individuals. A study by the Bureau of Investigative Journalism found that, on an hourly basis, one in three Deliveroo riders earned less than the national minimum wage.

Recommended Reads

Complaints about working conditions at investment banks are raising some questions about the sustainability of the industry's profit surge. [The Wall Street Journal]

An overwhelming demand for therapists has created a growing field of companies that promise mental-health care via smartphone. But are they promising a service they can't possibly provide? [The Cut]

Remote work is here to stay, and Manhattan may never be the same. [The New York Times]

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Quick Takes


	The Daily Benchmark
	2018 Vintage Global Funds-of-Funds
	VC Deals
	Brex rival Ramp's valuation rises to $1.6B
	Cityblock Health collects $192M
	Crossover Health banks $168M Series D
	Qihan secures new funding
	Adtech specialist strikes pact with Vista
	Substack deal sets sights on $650M valuation
	Exits & IPOs
	VC-backed Cazoo to go public in $7B SPAC deal
	SomaLogic to go public in SPAC deal
	Fundraising
	BBG Ventures announces $50M fund

The Daily Benchmark

2018 Vintage Global Funds-of-Funds

Median IRR

7.42%

Top Quartile IRR Hurdle Rate

14.17%

1.02x

Median TVPI

Select top performers

Top Tier Venture Velocity Fund 2

Industry Ventures Partnership Holdings V

Aberdeen US Private Equity VII

*IRR: net of fees

35 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

VC Deals

Brex rival Ramp's valuation rises to $1.6B

Fintech startup Ramp, a Brex competitor that provides corporate credit cards and a spend management platform, is close to wrapping up a pair of funding rounds, one of which would value the company at $1.6 billion, as first reported by The Information. The deals reportedly include a $65 million round led by D1 Capital Partners and a second $50 million funding led by payments giant Stripe, which is also co-investing in the other round.

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Cityblock Health collects $192M

Cityblock Health, a healthcare provider for Medicaid and lower-income Medicare beneficiaries, has raised $192 million in a Series C extension led by new investor Tiger Global, with support from existing backers Kinnevik, Maverick Ventures and Redpoint Ventures. The company was valued at $1.28 billion in December, according to PitchBook data. Cityblock currently operates across New York, Connecticut, Massachusetts and Washington, DC.

Additional Investors:

General Catalyst, Echo Health Ventures, 8VC, Thrive Capital, Wellington Management, Imprint Capital Advisors

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Crossover Health banks $168M Series D

Crossover Health has raised $168 million in a round led by Deerfield Management, with participation from investors including Perceptive Advisors, OrbiMed Advisors and Foresite Capital. The company helps self-insured employers manage employees' health plans, including primary care and mental health services. Crossover Health was valued at $184 million in 2016, according to PitchBook data.

Select Additional Investors:

Avidity Partners, Irving Investors

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Qihan secures new funding

Qihan Biotechnology has added $67 million to its Series A round. Investors including Lilly Asia Ventures, Matrix Partners China, Sequoia and CMB International supported the funding. Based in Hangzhou, China, the company is using genome editing technology to develop cell therapies and organs for transplantation.

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Adtech specialist strikes pact with Vista

Vista Equity Partners has acquired a majority stake in TripleLift, a provider of media advertising products, in a deal reportedly worth some $1.4 billion. TripleLift CEO Eric Berry will retain his role and remain on the company's board of directors. The company previously received around $16.5 million in venture funding, with Edison Partners most recently leading a $10.5 million Series B in 2015.

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Substack deal sets sights on $650M valuation

Substack is reportedly seeking to raise $65 million in a venture capital deal that would value the newsletter-publishing platform at around $650 million. The company was valued at just over $48 million in a deal in July 2019, according to PitchBook data. Axios reported the new round is being led by existing investor Andreessen Horowitz.

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Exits & IPOs

VC-backed Cazoo to go public in $7B SPAC deal

UK-based online used car retailer Cazoo has agreed to go public on the NYSE by merging with blank-check company Ajax I in a deal worth $7 billion. The deal will raise around $1.6 billion in proceeds for the company, including $805 million cash in trust and an $800 million PIPE led by Ajax sponsors and existing backer D1 Capital Partners. Cazoo has previously been backed by investors such as General Catalyst and BlackRock.

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SomaLogic to go public in SPAC deal

Biotech specialist SomaLogic plans to combine with blank-check company CM Life Sciences II in a deal that gives it a pre-money valuation of about $1.23 billion. The Boulder, Colo.-based business expects to receive $651 million from the deal, including a $375 million PIPE round from Casdin Capital, Corvex Management, Janus Henderson, SoftBank and others. SomaLogic's proteomics technology is used by other biotech companies for drug discovery.

Additional Investors:

ARK Investment Management, Morgan Stanley, Farallon Capital Management, Illumina, Novartis, Perceptive Advisors, T. Rowe Price

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Fundraising

BBG Ventures announces $50M fund

New York-based BBG Ventures has raised $50 million for its latest namesake vehicle, which will be used to lead seed and pre-seed rounds for consumer startups addressing health, climate-friendly products, education and overlooked communities. The firm focuses on backing female-led startups, and a third of its portfolio companies have a Black or Latinx founder.

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