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The Daily Pitch: VC

May 11, 2021

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

Today's Top Stories

On the podcast: Autonomous finance's obstacles and opportunities

In the past few years, VCs have poured tens of millions of dollars into startups that use AI to help consumers spend wisely. But the push to back companies that let robots make financial decisions creates both possibility and risk.

On the latest episode of "In Visible Capital," PitchBook emerging tech analysts talk about what the future may hold for autonomous finance. Topics discussed include:

Why humans are ill-suited to making sound financial decisions and how AI can help.

Why gaining the trust of consumers who are willing to release a trove of personal financial information remains an obstacle.

What the future could look like for autonomous financial regulations and why many fintechs are still operating in a gray area.

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Can VCs use data to discover the next unicorn founder?

It's easy to picture the classic unicorn founder as a stereotypical 25- to 34-year-old out of Stanford or Facebook (or some accelerator like Y Combinator).

But the reality is that most of the star entrepreneurs coming into prominence show none of those kinds of attributes, according to a unique dataset amassed by Ali Tamaseb, a venture capitalist with DCVC.

In a new book called "Super Founders" due out May 18, Tamaseb's data calls into question whether the big VC firms really know what to look for in their quest to find the great company-builders of the future. Tamaseb collected a trove of proprietary data about companies founded between 2005 and 2018 (partly relying on PitchBook's platform), helping to paint a picture of promising founders using larger, less biased samples while avoiding anecdotes or widely held archetypes.

"The biggest signal I observed in the data is that a bunch of things don't matter, like age and university and being technical," Tamaseb says. "What matters is having a history of having generated value, even if that value was small."

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A message from Velocity Global

Help your portfolio companies overcome global expansion obstacles

VC investors and their portfolio companies need an international growth strategy that supports their high-growth trajectory and maximizes ROI.

Download Velocity Global's new infographic, Venture Capital: Set Your Portcos Up for a Successful Global Expansion, to explore different global hiring scenarios, and identify the difference between a vendor and a strategic global expansion partner to avoid costly mistakes. Scenarios cover:

Managing benefits for international teams
Protecting intellectual property
Navigating value-added tax
Encountering country-specific issues

Get the infographic

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Recommended Reads

With many families no longer able to afford tuition, Catholic schools across the US are losing students at record rates, and hundreds are closing. [The Wall Street Journal]

A coastal development near Athens is getting ready to move forward. But with prices beyond the reach of most Greeks, the country is hoping to attract foreign investors. [Bloomberg]

Toy giant Mattel is giving Barbie and other toys a makeover. And not in the way you might think. [Forbes]

Since yesterday, the PitchBook Platform added:

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Quick Takes


	The Daily Benchmark
	2009 Vintage North American Venture Funds
	VC Deals
	Gojek raises $300M before Tokopedia merger
	Laronde launches with $50M from Flagship Pioneering
	Babel nabs $40M
	Exits & IPOs
	Michael Klein, Sam Altman cut SPAC IPO size
	Procore sets IPO terms
	Better eyes SPAC exit
	Plus to go public in SPAC deal

The Daily Benchmark

2009 Vintage North American Venture Funds

Median IRR

10.80%

Top Quartile IRR Hurdle Rate

20.95%

1.67x

Median TVPI

Select top performers

AM Pappas Life Science Ventures IV

Oregon Angel Fund 2009

5AM Fund III

*IRR: net of fees

26 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

VC Deals

Gojek raises $300M before Tokopedia merger

Indonesian super app maker Gojek has raised $300 million from wireless carrier Telkomsel, building on a $150 million investment that Telkomsel made in the company last year. Gojek plans to merge with ecommerce company Tokopedia to form a new company called GoTo. Gojek was reportedly valued at $10 billion last year.

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Laronde launches with $50M from Flagship Pioneering

Biotech startup Laronde has launched with $50 million in capital from VC firm Flagship Pioneering. Cambridge, Mass.-based Laronde, which was founded in 2017 by Flagship Labs, is creating an engineered form of RNA capable of producing therapeutic proteins in the human body. Flagship Pioneering has also backed companies including mRNA vaccine maker Moderna and cellular engineering specialist Sana Biotechnology.

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Babel nabs $40M

Babel Finance, a Hong Kong-based crypto financial services startup, has raised a $40 million Series A led by Zoo Capital, Sequoia China, Dragonfly Capital, BAI Capital, Bertelsmann and Tiger Global, with existing backers also participating. The company offers crypto lending, asset management and prime financing to institutions and qualified investors worldwide.

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Exits & IPOs

Michael Klein, Sam Altman cut SPAC IPO size

AltC Acquisition Corp. is now looking to raise $400 million after originally seeking to raise $1 billion in its IPO, according to SEC filings. The SPAC is sponsored by former Y Combinator president Sam Altman and Michael Klein, a serial SPAC sponsor perhaps best known for taking Lucid Motors public. The reduction in the offering amount comes amid increased regulatory scrutiny of SPAC deals and a widespread belief that there are too many SPACs chasing too few potential targets.

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Procore sets IPO terms

Construction software specialist Procore plans to sell 9.47 million shares at between $60 and $65 apiece in its upcoming IPO. Iconiq Capital holds a 39.5% stake in the company, which is also backed by Bessemer Venture Partners, Tiger Global and D1 Capital Partners. California-based Procore was valued at $4.85 billion last year, according to PitchBook data.

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Better eyes SPAC exit

Online mortgage lender Better plans to merge with special-purpose acquisition company Aurora Acquisition Corp., The Wall Street Journal reported. The deal is said to value Better at $7 billion pre-money. SoftBank is a backer of Better and could invest another $1.3 billion as part of a $1.5 billion PIPE round that would come alongside the SPAC deal. New York-based Better was valued at $4 billion last year, according to PitchBook data.

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Plus to go public in SPAC deal

Self-driving truck startup Plus has struck a deal to merge with blank-check company Hennessy Capital Investment Corp. V. The deal values the combined company at $3.3 billion and is expected to provide Plus with $500 million in cash. Bay Area-based Plus plans to begin production of its autonomous truck system through a partnership with Chinese truck manufacturer FAW as soon as this year.

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Chart of the Day

"M&A will likely continue to surge in sectors such as tech and healthcare. Both proved resilient in the downturn, and companies in these sectors have record-setting war chests of cash. Manufacturing is a sector to watch as fallout from the pandemic reshapes the competitive balance in the coming years."

Source: PitchBook's Q1 2021 Global M&A Report