PitchBook News - Bain, Crosspoint bet on cybersecurity

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The Daily Pitch: VC

June 9, 2021

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Today's Top Stories

Bain, Crosspoint bet on cybersecurity with $900M ExtraHop takeover

(MF3d/Getty Images)

At a time when ransomware attacks have gained national attention, Bain Capital and Crosspoint Capital Partners have agreed to acquire cybersecurity provider ExtraHop in a transaction valued at $900 million.

The deal follows a string of ransomware attacks that have plagued US companies, including the May 7 Colonial Pipeline cyberattack, which resulted in a reported $4.4 million payment being made to hackers. Based in Seattle, ExtraHop has raised more than $60 million in private funding, reaching a valuation of $300 million in 2014, according to PitchBook data.

The number of US PE deals in the cybersecurity sector has increased each year since 2017, with 2021 pacing to roughly match last year's total of 103, also according to PitchBook data.

Founded in 2007, ExtraHop provides cloud-native network detection and response solutions to The Home Depot, Ulta Beauty, Phoenix Children's Hospital and others. ExtraHop CEO Arif Kareem, CTO Jesse Rothstein and chief customer officer Raja Mukerji will remain in their roles.

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What happens when a GP sells a piece of itself

(Taweesak Chaiyakhan/Getty Images)

The buying of GP stakes has become a somewhat standard practice in the PE industry. For the GPs, it brings on a strategic partner and provides capital for expansion. These deals also can validate an LP's investment thesis with the firm because GP stakes investors only target top-performing firms.

On the flip side, some LPs can be skeptical, believing that GPs, having sold a stake in their business, will prioritize boosting management fees over generating returns and carry for their investors. With this in mind, our latest analyst note explores how selling stakes can change manager behavior. Takeaways include:

How selling a minority stake might affect IRR and TVPI quartiles for GPs, with comparisons before and after and across several strategies.

The impact of stake sales on the growth of assets under management, and whether LPs are right to be concerned about GPs shifting their emphasis to amassing assets.

How the number of strategies that a firm pursues is influenced by selling GP stakes over time.

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A message from Deloitte

What's next for the fintech expansion-stage ecosystem?

A bevy of mature, expansion-stage fintech companies continue to make headlines as 2021 progresses. From the listing of Coinbase on public markets to the latest surge in retail investor activity on Robinhood, the fintech sector has seen some of the most notable advances in both expansion-stage investment and alteration of the competitive landscape for financial services.

The latest edition of Deloitte's Road to Next series zeros in on this select arena, reviewing which companies look poised to become category front-runners, and where the forefront of the next wave of innovation in fintech lies. Additional highlights include:

Datasets summarizing key dealmaking trends
Insights from Deloitte leaders as to first-mover advantages in regulation
A spotlight on the B2B payments ecosystem

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CVC Capital serves up $600M tennis bid

Serena Williams and Andy Murray play a mixed doubles match at Wimbledon in 2019. (Mike Hewitt/Getty images)

CVC Capital Partners is in talks to make a $600 million investment in a new $4 billion global tennis group, the Financial Times reported.

Under the terms of the deal, CVC would take a 15% stake in One Tennis, which will manage the media and data rights of both the men's and women's pro tours.

The Association of Tennis Professionals and the Women's Tennis Association, which govern the tours, would remain independent and in charge of sporting decisions.

The Luxembourg-based firm has become one of the most active investors in sports and sports media, particularly in Europe, where private equity has made significant inroads since the start of the pandemic.

The former owner of Formula One, CVC has made investments in Six Nations Rugby, Pro14 Rugby and the International Volleyball Federation since the start of 2020. It has also been targeting stakes in two top-flight soccer leagues—Italy's Serie A and Germany's Bundesliga, though the latter failed in May—and in the NBA's San Antonio Spurs.

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Thelander-PitchBook survey is now open

PitchBook has teamed up with J.Thelander Consulting to conduct the annual Thelander-PitchBook Investment Firm Compensation Survey, which covers base pay, bonuses, carried interest and more.

New information in this year's survey includes advisory board compensation for firms, ranging from managing general partners to analysts.

Participating in the survey will give you access to a free subset of the results on the Thelander platform, where you can filter the data by job title, firm type, assets under management and location.

Take the survey

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Recommended Reads

Inside the marvelous and dangerous expeditions of Christophe Péray, a 66-year-old cristallier who climbs the French Alps in pursuit of rare crystals. [Outside]

In a suddenly hot job market, employers are getting creative with incentives to attract new employees and retain existing ones. Among the offerings? Paid college tuition and free food. [The New York Times]

Nearly one-third of the population of the Northern Triangle is suffering from crisis levels of food insecurity driven by climate change. This has many Central Americans fleeing to the US. [Bloomberg]

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Quick Takes


	A message from Unigestion
	Explore our microsite on the current opportunity in GP-led secondaries
	The Daily Benchmark
	2017 Vintage North American Venture Funds
	VC Deals
	BlockFi eyes $5B valuation with upcoming funding
	In record deal, Berkshire Hathaway bets on Brazil's Nubank
	Relativity Space lands $650M for rocket development
	LetsGetChecked picks up $150M Series D
	Brinqa banks $110M
	SoftBank backs $90M Series D for Whatfix
	Former Uber exec launches Waabi with $83.5M
	Plant-based meat maker Simulate raises $50M

A message from Unigestion

Explore our microsite on the current opportunity in GP-led secondaries

The COVID-19 crisis has created an exceptional opportunity in small, hard-to-access GP-led secondary transactions. How can investors access the best deals? What returns are achievable and what are the risks? Visit our Private Equity Secondaries microsite to discover a wealth of content about the current opportunity in GP-led secondary deals at the small end of the market.

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The Daily Benchmark

2017 Vintage North American Venture Funds

Median IRR

18.80%

Top Quartile IRR Hurdle Rate

34.75%

1.26x

Median TVPI

Select top performers

Alta Partners NextGen Fund I

Technology Impact Fund

Forerunner Builders I

*IRR: net of fees

42 Funds in Benchmark »

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VC Deals

BlockFi eyes $5B valuation with upcoming funding

Cryptocurrency specialist BlockFi is in discussions to raise hundreds of millions of dollars led by Third Point and Hedosophia at a roughly $5 billion valuation, The Information reported. The company landed a $350 million Series D at a $3 billion valuation in March. BlockFi operates a crypto trading platform in addition to offering crypto-backed loans and credit cards that earn Bitcoin rewards.

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In record deal, Berkshire Hathaway bets on Brazil's Nubank

Brazilian digital banking specialist Nubank has raised $750 million, led by $500 million from Berkshire Hathaway. That represents Latin America's largest single fintech funding round, according to PitchBook data. The deal, an extension to a Series G announced earlier this year, bumped Nubank's valuation up to $30 billion. Other investors participating in the round include the Canada Pension Plan Investment Board, MSA Capital and Sunley House Capital.

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Relativity Space lands $650M for rocket development

Relativity Space, which uses 3D printing to create rockets, has raised $650 million in a Series E. The round values the company at $4.2 billion, making it the next most valuable private space company behind SpaceX, according to reports. The round was led by Fidelity Management & Research and included participation from BlackRock, Coatue, Tiger Global and others. The funding will go toward the production of Terran R, a new reusable, 3D-printed rocket. The Long Beach, Calif.-based company has raised well over $1 billion in total funding.

Additional Investors:

Baillie Gifford, Centricus, K5 Global, Soroban Capital Partners, Tribe Capital, XN

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LetsGetChecked picks up $150M Series D

LetsGetChecked has raised $150 million in a round led by Casdin Capital. Founded in 2015 and jointly based in New York and Dublin, LetsGetChecked is a provider of at-home medical tests. The company raised a $71 million Series C in May 2020.

Select Additional Investors:

Commonfund, HLM Venture Partners, Illumina Ventures, Optum Ventures, Qiming Venture Partners, Transformation Capital Partners

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Brinqa banks $110M

Brinqa has raised $110 million in a round led by Insight Partners. Founded in 2009 and based in Austin, the company offers a platform to identify and manage cybersecurity risks.

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SoftBank backs $90M Series D for Whatfix

Whatfix has raised $90 million in a round led by SoftBank's Vision Fund 2. The San Jose-based company is the developer of a digital adoption platform designed to help companies such as Wipro and Cardinal Health deploy software tools. Whatfix raised a $32 million round in February 2020.

Additional Investors:

Cisco Investments, Dragoneer Investment Group, Eight Roads Ventures, F-Prime Capital, Sequoia India

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Former Uber exec launches Waabi with $83.5M

Waabi, a newly launched autonomous vehicle startup, has raised $83.5 million in a Series A led by Khosla Ventures, with support from investors including Uber, 8VC, Radical Ventures and OMERS Ventures. Waabi is focusing on automating long-haul trucks. The Toronto-based company was founded by Raquel Urtasun, an AI veteran and University of Toronto professor who was previously head of R&D for Uber's self-driving vehicle initiative.

Plant-based meat maker Simulate raises $50M

Simulate, the New York-based startup behind plant-based chicken nuggets brand Nuggs, has raised a $50 million Series B led by Seven Seven Six, according to reports. The deal, which reportedly values the company at $260 million, also saw participation from investors including Nomo Ventures, McCain Foods, Imaginary Ventures and Day One Ventures. The funding will go toward growing the company's headcount.

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