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The Daily Pitch: VC

May 6, 2021

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

Today's Top Stories

BitGo, Bitso join growing herd of billion-dollar crypto companies

(Francesco Carta fotografo/Getty Images)

Not long ago, it was rare to see blockchain or cryptocurrency startups valued at more than $1 billion. But that list is growing rapidly.

Since the start of the year, eight new blockchain or cryptocurrency companies have received unicorn valuations, bringing the total count to 21, according to PitchBook data. Two of those were added yesterday.

Bitcoin investment firm Galaxy Digital agreed to pay $1.2 billion in stock and cash for BitGo. The startup operates a crypto platform for institutional investors and service providers, and has more than $40 billion of assets under custody. BitGo was valued at $170 million in 2018, according to PitchBook data.

Crypto trading platform creator Bitso raised $250 million in a Series C led by Tiger Global and Coatue Management at a $2.2 billion valuation. The Mexican company's Latin America customer base doubled to two million in less than a year. Paradigm, Bond, Valor Capital Group, QED, Pantera Capital and Kaszek also supported the round.

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Global M&A begins its post-pandemic recovery

The pandemic is not over, but the global economy is showing signs of recovery, and so is the M&A landscape. In all, 8,753 deals worth a combined $917.7 billion were closed in the first quarter of 2021. The total includes some of last year's headline-grabbing deals, among them LVMH's takeover of Tiffany & Co. and the London Stock Exchange's acquisition of Refinitiv, but it is also an indication that confidence is returning in 2021.

PitchBook's Q1 2021 Global M&A Report, sponsored by Liberty GTS and Mercer, looks at the key macroeconomic drivers behind the rebound in deal activity, from the vaccine rollout to the impact of the US government's fiscal stimulus. Our analysts also drill down into the specific regional and sector trends fueling the comeback. Highlights include:

The wave of consolidation among European companies has helped deal flow in the region hit a quarterly peak, with mergers among European banks and insurers being particularly prominent.

How healthcare services have dominated dealmaking, accounting for over half of global M&A volume for the period, with healthcare technology deals also showing a significant uptick.

An outlook for the coming quarters and why current indicators suggest even more activity in the months ahead as a surge of deals announced at the start of the year come to fruition.

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A message from TBM Consulting

Accelerate growth trajectory with the right technologies

Achieving aggressive top-line growth is hard in a world where uncertainty persists. But manufacturing portfolio companies that deploy technology strategically to monitor and respond to ongoing changes can thrive.

Specifically, the right technologies implemented across three areas of the business will help bring in revenues faster:

Sales and marketing technologies: Position companies to understand opportunities and expedite the sales process.
Engineering technologies: Reduce lead time and enhance product value.
Operations technologies: Help companies deliver on promises at the lowest total cost.

To learn how to identify digitally mature portfolio companies, download the article, "Manufacturers Grow Faster with the Right Digital Technologies," or contact Bob Brennan, Private Equity Practice managing director, at bbrennan@tbmcg.com.

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L Catterton scores big in The Honest Company's IPO

Jessica Alba has gone from being a movie star to leading The Honest Company to a splashy IPO. (Hannes Magerstaedt/Getty Images)

The Honest Company, the provider of beauty, cleaning, baby products and other consumer goods that was founded by Jessica Alba, saw its shares close up nearly 44% on Wednesday. The company raised around $413 million in its Nasdaq IPO by selling 25.8 million shares at $16 apiece, generating a fully diluted valuation of $1.6 billion.

The debut helped L Catterton cash in after it backed the business three years ago. The consumer goods-focused PE firm made a $200 million growth investment in The Honest Company in 2018, providing the business with a cash infusion after years of legal struggles. Founded in 2011, the company also raised nearly $300 million in VC funding, according to PitchBook data, with General Catalyst, Lightspeed, Fidelity Investments and Institutional Venture Partners among its other investors.

The company's backers sold more than 19 million shares in the IPO. But L Catterton was positioned for the largest windfall, owning around 37% of The Honest Company's shares before the offering. By comparison, Alba owned a 6.6% stake in the company.

The Honest Company experienced a rocky couple of years after multiple class action lawsuits in 2015 and 2016 alleged that its products were ineffective and not "natural," and that the company had misled consumers about ingredients. It was valued at $1.7 billion in 2015, according to PitchBook data. Then, in 2017, the company lost its unicorn status after raising a $75 million round at an $860 million valuation, according to a PitchBook estimate.

But The Honest Company's fortunes turned last year as sales of sanitation products boomed during the COVID-19 pandemic, pushing its 2020 revenue up some 28% year-over-year to more than $300 million.

Related read: Private equity's surge of 2020 IPOs capitalizes on frothy markets

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Recommended Reads

The onset of the pandemic resulted in challenges for food suppliers like Driscoll's, which misjudged demand in 2020. This year, the berry grower desperately needs to know America's appetite for strawberries. [The Wall Street Journal]

Actress Jessica Alba's The Honest Company made its public debut on the Nasdaq this week. But it's been a long and turbulent journey to get there. [Forbes]

A Copenhagen-based company is fighting food waste around the world via its app. It recently expanded into the US and is gaining ground by partnering with eateries, bakeries and grocery stores. [Fortune]

Since yesterday, the PitchBook Platform added:

21

VC valuations

1359

People

381

Companies

24

Funds

See what our data software can do

Quick Takes


	The Daily Benchmark
	2012 Vintage Global Real Assets Funds
	VC Deals
	Eikon Therapeutics lands $148M Series A
	Healthcare platform creator picks up $110M
	Timescale books $40M
	Fundraising
	Emergence Capital raises $950M across two funds
	Information Venture Partners wraps third fund

The Daily Benchmark

2012 Vintage Global Real Assets Funds

Median IRR

6.20%

Top Quartile IRR Hurdle Rate

8.81%

1.29x

Median TVPI

Select top performers

Aberdeen UK Infrastructure Partners

EnCap Flatrock Midstream Fund II

Post Oak Energy Partners

*IRR: net of fees

31 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

VC Deals

Eikon Therapeutics lands $148M Series A

The Column Group has led a $148 million round for Eikon Therapeutics, the developer of a drug discovery platform that works to treat life-threatening diseases by observing protein movement in living cells. Foresite Capital, Innovation Endeavors and Lux Capital also participated in the funding. California-based Eikon was valued at $60 million in 2019, according to PitchBook data.

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Healthcare platform creator picks up $110M

Vida Health has raised a $110 million Series D led by General Atlantic. Other investors including Centene, AXA Venture Partners, Ardea Capital Partners and NGP Capital also supported the financing. The San Francisco-based company is the provider of a virtual healthcare platform designed to help users manage physical and mental health conditions. Vida was valued at $140 million after a $30 million round in 2019, according to PitchBook data.

Additional Investors:

Ally Bridge Group, Aspect Ventures, Canvas Ventures, Valley Capital Partners, Workday Ventures, AME Cloud Ventures, Guidewell

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View 7 competitors »

Timescale books $40M

Timescale has raised a $40 million Series B led by Redpoint Ventures, with participation from Benchmark, NEA, Icon Ventures and Two Sigma Ventures. The New York-based company is the developer of an open-source SQL database designed to solve complex time-series data queries. Timescale was valued at $125 million in 2018, according to PitchBook data.

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Fundraising

Emergence Capital raises $950M across two funds

Emergence Capital, a SaaS-focused venture firm, has raised $575 million in committed capital for its sixth fund. It also closed a $375 million opportunity fund for follow-on rounds in existing portfolio companies, the first such vehicle for the firm. The two funds bring the firm's total assets under management to $2.3 billion. Since its founding in 2003, Emergence has been an early-stage backer of companies such as Zoom, Veeva and Bill.com.

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View 118 investments »

Information Venture Partners wraps third fund

Information Venture Partners has closed its third venture fund on $101 million, marking its largest vehicle to date. The Toronto-based firm focuses on early-stage B2B fintech and enterprise SaaS investments.

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View 38 investments »

Chart of the Day

"Even with this anemic activity at the top of the market, the median and top-quartile fund sizes rose sharply as the small end of the market also seized up, with the number of funds under $500 million hitting its lowest level since 2004. While smaller and larger fund counts contracted, activity for real estate vehicles between $500 million and $5 billion held relatively steady YoY."

Source: PitchBook's H2 2020 Global Real Estate Report