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The Daily Pitch: VC

June 10, 2021

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Today's Top Stories

How VC managers have adapted over time

(OsakaWayne Studios/Getty Images)

In the high-risk, high-reward game of staking startups, venture capitalists have shown a willingness to rewrite their playbook—changing their industry focus and oscillating between more and less specialized approaches.

Our latest analyst note dives into how US VC manager styles have drifted over the last 15 years. Key takeaways include:

Veteran venture investors have become increasingly split between highly specialized and generalist firms, with fewer managers taking the more moderate, targeted approach.

New GPs tend to specialize, often leveraging the networks and industry know-how they developed in past roles.

In recent years, specialist firms have dominated in terms of overall fundraising, bringing in $100 billion across 678 funds. Leading biotech investors, in particular, have become more specialized.

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Opaque private equity is marketing to retail investors despite pushback

(Spencer Platt/Getty Images)

It's been a year since federal officials announced policies that use 401(k) plans and other pensions to crack open private equity funds for the first time to retail investors.

Along the way, dueling views on the risks and returns of these products have sparked fierce debate over whether the asset class has driven the returns it claims to offer.

On the one hand, allowing retail investors to tap into private equity funds exposes them to an asset class that's historically been reserved for pensions, endowments and other institutional investors.
On the flip side, private equity funds have shown to be complex, illiquid and chock-full of expensive management fees that cut into overall returns.
While the debate rages, private equity firms have used workarounds to get access to retail traders through the public markets.

Recommended Reads

Some workers may be dreading the prospect of a return to the office. But many who have been liberated from their daily commutes during the pandemic are experiencing a void they can't quite name. [The Atlantic]

At look at the "huge" investment opportunities in Asia, and the research firms trying to help investors find them. [Institutional Investor]

How a former Reddit CEO is hoping to use his startup to tackle climate change through forest restoration. [Forbes]

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Quick Takes


	The Daily Benchmark
	2014 Vintage Global VC Funds-of-Funds
	VC Deals
	Northvolt brings in $2.7B+ to boost batteries
	Solana Labs nabs $314M+
	Verbit snags $157M Series D
	Cybersecurity specialist Aura locks in $150M
	Sequoia leads $150M Amplitude funding
	Strateos grabs $56M
	Exits & IPOs
	Marqeta stock rises after $1.2B IPO
	Investors
	Sequoia considers changes to returns distributions amid proposed tax increases

The Daily Benchmark

2014 Vintage Global VC Funds-of-Funds

Median IRR

20.88%

Top Quartile IRR Hurdle Rate

22.30%

2.06x

Median TVPI

Select top performers

Greenspring Global Partners VI

Weathergage Capital Investments 2014

SVB Strategic Investors Fund VII

*IRR: net of fees

13 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

VC Deals

Northvolt brings in $2.7B+ to boost batteries

Lithium-ion battery maker Northvolt has raised $2.75 billion in a private placement co-led by OMERS Capital Markets and four Swedish pension funds. Investors including Goldman Sachs, Volkswagen, Baillie Gifford and Norrsken VC also participated. Stockholm-based Northvolt is expanding the annual capacity of its gigafactory by 50% to meet growing demand for its batteries, which are sustainably manufactured and 97% recyclable.

Select Additional Investors:

AMF, Baron Funds, Bridford Investments, Compagnia di San Paolo, IMAS Foundation, EIT InnoEnergy, PCS Holding

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Solana Labs nabs $314M+

Crypto startup Solana Labs has raised more than $314.15 million in a private token sale led by Andreessen Horowitz and Polychain Capital, with support from 1kx, Sino Global Capital, Blockchange Ventures, Multicoin Capital, ParaFi Capital and others. Based in San Francisco, Solana Labs is a blockchain studio that incubates and launches decentralized finance projects built on the Solana blockchain. The company reportedly raised $40 million in March.

Additional Investors:

Alameda Research, CMS Holdings, Coinfund, CoinShares Ventures, Collab+Currency, Memetic Capital, Jump Trading

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Verbit snags $157M Series D

Verbit has raised $157 million at a more than $1 billion valuation in a round led by Sapphire Ventures. The startup, which is based in New York, San Francisco, Tel Aviv and Kyiv, Ukraine, is a provider of AI-powered speech recognition technology for use in transcription and captioning. Verbit was valued at $290 million in November, according to PitchBook data.

Select Additional Investors:

Azura, Icon Fund, More Capital, Stripes, Third Point, HV Capital, ClalTech

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Cybersecurity specialist Aura locks in $150M

Aura has raised a $150 million Series E led by Warburg Pincus, bringing the cybersecurity startup's total funding to about $450 million. The Massachusetts-based company offers a platform to help protect against identity theft and digital fraud.

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Sequoia leads $150M Amplitude funding

Amplitude has raised a $150 million Series F at a $4 billion pre-money valuation. The round was led by Sequoia, with participation from GIC, Battery Ventures and IVP. The company provides a product intelligence platform designed to help businesses analyze and optimize customer experience. Amplitude raised $50 million at a $1 billion valuation in May 2020, according to PitchBook data.

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Strateos grabs $56M

Strateos, a developer of remote access laboratories and lab control software for the life sciences sector, has raised a $56.1 million Series B. The financing was led by DCVC and Lux Capital, with participation from Eli Lilly, Castor Ventures and others. The new capital will be used to support the company's SmartLab platform, which integrates data generation, AI and automation to accelerate pharmaceutical and synthetic biology R&D. Strateos raised a $46.5 million round at a $136.5 million valuation in December, according to PitchBook data.

Additional Investors:

Ally Bridge Group, Black Diamond Ventures, Mack & Co.

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Exits & IPOs

Marqeta stock rises after $1.2B IPO

Fintech company Marqeta began trading on the Nasdaq after raising $1.23 billion in its IPO. The Oakland, Calif.-based company's stock ended the first day up 13% with a market capitalization of more than $16 billion. Marqeta was valued at $4.3 billion last year. Its leading private backers include Granite Ventures, which held an 11.2% pre-IPO stake, Iconiq Capital (8.7%) and 83North (8%).

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Investors

Sequoia considers changes to returns distributions amid proposed tax increases

Sequoia is considering changing how its investment returns are distributed in an effort to help it avoid the Biden administration's proposed tax increases on carried interest, Bloomberg reported. Sequoia could reportedly distribute some of its portfolio companies' shares before taking them public; it could also keep shares in a special purpose vehicle rather than distributing them directly to GPs in an immediate payout, thus avoiding future tax rates that are higher.

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