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The Daily Pitch: VC

May 27, 2021

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

Today's Top Stories

European fintech startups with overseas ambitions fill war chests at record clip

Helsinki-based Holvi left the UK market in October, citing the pandemic and an unstable post-Brexit landscape. (Courtesy of Holvi)

European fintech startups have raised €7 billion (around $8.5 billion) from VC investors this year as many look to replicate their domestic success in both neighboring markets and in the US.

Payment card provider Curve and digital banks including Starling Bank have secured capital to put toward international expansion.

However, entering new markets can be fraught with challenges for fintech companies in regulated sectors such as banking and insurance.

Fintech startups looking to expand in the US face a patchwork of regulations, while in Europe, Brexit has added another layer of complexity to consider.

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VC, PE continue to shine brightest in private fund performance

Preliminary data for the fourth quarter of 2020 reveals that, after a headwind-filled year, fund performance across the majority of private market strategies has recovered.

PitchBook's latest Global Fund Performance Report provides a clear picture of the changes across sectors, with a new quilt chart visualization that will be included in all our quarterly benchmarks going forward. Other highlights include:

PE funds registered a 13.3% return in Q3. As a result, PE fund appreciation has more than made up for pandemic-induced losses, underscoring how quickly the economy bounced back.

VC's Q2 rebound in returns pushed higher in Q3. IRR for the quarter hit 12.4%—the highest figure since 2010—as investors returned to their usual dealmaking pace, with exits supported by a robust IPO market.

Private debt saw a modest improvement in Q3. The liquidity offered by central bank bond-buying programs, combined with lower-than-expected default rates, drove a broad recovery in credit markets in H2 2020.

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A message from SS&C Intralinks

Alternating current: Five energy M&A supertrends

Energy is in flux: Demand-side volatility and a growing emphasis on sustainability by dealmakers are combining to create unprecedented uncertainty in the energy sector. Plus, a pandemic-driven migration to technology platforms and digital tools and solutions is creating new challenges in energy M&A.

SS&C Intralinks' new report, 5 Energy M&A Supertrends, explores the dominant trends that emerged from last year's chaos and crises and provides energy deal professionals with insights into current and forecasted market conditions, plus guidance on how to navigate—and succeed—in the new virtual environment. The report examines:

The continuing impact of the pandemic
Why ESG is here to stay
Increasing government involvement
Distressed deals, consolidation and acquisitions
Rising valuations in renewables

Download the new report now

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Veritas, Evergreen complete $3B Cubic takeover

Cubic is a provider of communications, intelligence and training solutions to the defense industry. (Don Farrall/Getty Images)

Veritas Capital and Elliott Management affiliate Evergreen Coast Capital have completed a $3 billion acquisition of Cubic, a San Diego-based provider of tech solutions to the defense and transportation sectors.

The public-to-private deal includes the assumption of debt and will see company shareholders receive $75 per share in cash. Cubic stock has ceased trading on the NYSE, and the company will remain headquartered in San Diego.

Elliott confirmed in September that it had acquired a 15% stake in the company.

Cubic was founded in 1951 as an electronics company and completed its IPO in 1959. Its services have expanded to include digital intelligence, transportation fare collection and revenue management, and air combat maneuvering instrumentation for the military. Cubic has around 5,600 employees across 22 countries.

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Recommended Reads

It's never been easier to back a startup, and Gen Z is taking advantage of that fact. Inside the growing cohort of young investors who care less about getting rich, and more about making their mark on the startup ecosystem. [Wired]

A recent study demonstrates a little-known way that private equity ownership can add value to companies. [Institutional Investor]

Qualcomm's incoming CEO, Cristiano Amon, discusses 5G, Tesla competitors and the company's new capacity for R&D. [Forbes]

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Quick Takes


	The Daily Benchmark
	2018 Vintage European Venture Funds
	VC Deals
	SoftBank leads $775M round for Perch
	Contentsquare collects $500M Series E at $2.8B valuation
	Salesforce backs $120M+ round for Wiz
	Salt Security lands $70M Series C
	Pet tracking startup walks off with $35M
	PartnerStack picks up $29M
	Electric vehicle startup brings in $20M
	Fundraising
	Mindset Ventures raises $52M for Fund III

The Daily Benchmark

2018 Vintage European Venture Funds

Median IRR

18.00%

Top Quartile IRR Hurdle Rate

28.70%

1.03x

Median TVPI

Select top performers

Forbion Capital Fund IV

Dawn Capital III

Capital300 Fund

*IRR: net of fees

9 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

VC Deals

SoftBank leads $775M round for Perch

Perch, an acquirer and operator of third-party sellers and brands on Amazon, has raised $775 million in Series A financing led by SoftBank's Vision Fund 2. Spark Capital and Victory Park Capital also participated. Founded in 2019, the Boston-based company raised a $123.5 million round last year. Perch is profitable and has acquired more than two ecommerce brands per week so far in 2021.

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Contentsquare collects $500M Series E at $2.8B valuation

Contentsquare, the creator of a digital experience analytics platform, has been valued at $2.8 billion after raising a $500 million Series E led by SoftBank's Vision Fund 2. The company has received prior backing from Eurazeo, Bpifrance, KKR, Canaan, BlackRock and Highland Europe, many of which also participated in the latest financing. Contentsquare was founded in Paris in 2012 and also operates out of London, New York, Tokyo, Singapore and other locations. The round brings the company's total funding to more than $800 million.

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Salesforce backs $120M+ round for Wiz

Wiz, the developer of a cloud security platform, has raised over $120 million in a round led by Salesforce, Bloomberg reported. The 1-year-old Tel Aviv-based company has collected $230 million in prior funding from investors including Sequoia and Insight Partners. It reached a valuation of $1.7 billion in March.

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Salt Security lands $70M Series C

Cybersecurity startup Salt Security has raised $70 million in a Series C led by Advent International, with support from Alkeon Capital, DFJ Growth and others. The round values Salt Security at $650 million, according to a PitchBook estimate. The Bay Area-based company's platform offers protection against attacks on API-driven services and applications. Salt Security's customers include digital infrastructure company Equinix and corporate travel specialist TripActions.

Additional Investors:

S Capital VC, Sequoia, Tenaya Capital, Y Combinator

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Pet tracking startup walks off with $35M

Tractive has raised $35 million in a round led by Guidepost Growth Equity. The Austrian company is the developer of a GPS-based live-tracking device for dogs and cats. Founded in 2012, Tractive has more than 400,000 subscribers across 175 countries.

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PartnerStack picks up $29M

PartnerStack has raised a $29 million Series B led by 3L, with participation from Whitecap Venture Partners, Harbourvest and RRE Ventures. The Toronto-based company is the developer of a platform that helps SaaS companies manage partner relationships and drive revenue. PartnerStack was valued at around $27 million in 2019, according to PitchBook data.

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Electric vehicle startup brings in $20M

Beep has raised a $20 million Series A from Intel Capital and Blue Lagoon Capital. The Orlando-based company is a developer of autonomous, electric, multi-passenger vehicles. The funds will be used in part to help the startup continue expanding its fleet deployment across North America.

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Fundraising

Mindset Ventures raises $52M for Fund III

Mindset Ventures has raised $52 million for its third flagship fund. Fund III, which was first announced in 2019, had an initial target of $50 million. Founded in 2016, Mindset has offices in the Bay Area and Brazil, and it invests in early-stage startups, with a focus on US- and Israel-based companies seeking to expand in Brazil and Latin America.

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