A climate change 'wake-up call' from LPs

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The Daily Pitch: VC

June 15, 2021

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Today's Top Stories

LPs issue a climate-change 'wake-up call' for private equity

(Getty Images/Nuthawut Somsuk)

GPs seeking LP investments may increasingly find that a climate-friendly investment strategy isn't just good public relations, but the key to successful fundraising.

Just over three-quarters of limited partners surveyed by PE secondaries giant Coller Capital said they ranked climate change and sustainability as the market's most influential mega-trend when deciding where they will invest in the next five years. This was followed closely by trends in health and biotech.

The survey showed that 47% of LPs think that a robust ESG (environmental, social and governance) policy will improve their long-term private equity returns. As such, GPs are under greater pressure to consider the ESG implications of their investment theses when courting LP commitments.

"The fact that half of all private equity investors think ESG investing will in itself boost their portfolio returns should be a wake-up call to anyone who still thinks ESG is a 'nice to have' or a PR tool," said Jeremy Coller, CIO of Coller Capital, in a statement.

The survey's findings complement PitchBook's own 2020 Sustainable Investment Survey, which found that 55% of GPs say they have already included sustainable investing initiatives in their investment process.

However, the market doesn't always agree on what constitutes ESG-driven investing. The PitchBook survey showed that nearly a third of GPs and LPs alike thought that the biggest investment challenge was that it was unclear how to define ESG and measure impact outcomes.

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Cyberattacks reveal opportunities in IoT/OT security industry

(ValeryBrozhinsky/Getty Images)

The security of internet-connected devices and operational technology presents a growing concern for enterprises. While venture investors have yet to adequately address the opportunity in the market, startups in the IoT/OT security space are poised to develop customized solutions for the vulnerabilities in specific industries.

Our latest analyst note explores the major trends that have shaped the space so far this year, including regulatory scrutiny, cyberattacks and a string of exits involving Armis, CyberX and Asavie.

Our analysts believe firmware security has been underserved by startups and will require increased investment from chipmakers and device manufacturers as product security gains importance.

Security for devices, industrial control systems and connected vehicles has received disproportionately low VC funding relative to those market sizes.

Spending on device security could outstrip costs for network and communication security by 2024, given the identity-management and encryption needs for devices.

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A message from Deloitte

Key challenges for fintech front-runners in the expansion-stage ecosystem

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, exploring where the forefront of the next wave of innovation in fintech lies and key challenges for front-runners. 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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Recommended Reads

A recent report found that the top 10 countries adopting, mining and trading cryptocurrencies are all emerging markets. The list includes Colombia, Kenya and Vietnam. [Fortune]

Cities across America are reopening as the pandemic recedes. But with violent crime rates spiking over the past year, some business owners and residents are hesitant to let their guards down. [The New York Times]

From an economic collapse to a pandemic, Lebanon has faced a series of recent catastrophes. The newest crisis? A severe fuel shortage. [The Washington Post]

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Quick Takes


	The Daily Benchmark
	2017 Vintage Global Secondaries Funds
	A message from RBC Capital Markets
	Why is comms infrastructure vital to the future?
	VC Deals
	Lyra Health picks up $200M
	Insight Partners leads $75M Series C for Immersive Labs
	HiFiBiO Therapeutics secures $75M
	Portfolio Companies
	Investors buy about $1B of Stripe in secondary sale
	Exits & IPOs
	Boxed to go public via SPAC
	Fundraising
	Flagship Pioneering closes $3.4B fund

The Daily Benchmark

2017 Vintage Global Secondaries Funds

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11.68%

Top Quartile IRR Hurdle Rate

18.88%

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AB Value Bridge VI

Landmark Equity Partners XVI

Hollyport Secondary Opportunities Fund VI

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A message from RBC Capital Markets

Why is comms infrastructure vital to the future?

With burgeoning demand accelerated by pandemic-driven remote work, the communications infrastructure sector has been in the spotlight. More than ever before, it's seen as core infrastructure on a global basis, and RBC Capital Markets' global head of Communications Infrastructure Investment Banking, Madonna Park, believes it will underpin the future.

With a high level of activity in the sector, where are the growth and M&A opportunities? What impact could continuing consolidation, ESG and regulatory focus have on the sector?

See why comms infrastructure is pivotal for technology innovation moving forward, whether it's supporting 5G, AI, automated cars or the data that needs to be stored as a consequence, with insights from RBC Capital Markets' industry experts.

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VC Deals

Lyra Health picks up $200M

Lyra Health, a provider of mental health benefits for employers, has raised a $200 million round led by Coatue, with support from Sands Capital and others. The funding values the company at $4.6 billion, according to a PitchBook estimate. Based in Burlingame, Calif., Lyra provides evidence-based care across a range of mental health conditions.

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Insight Partners leads $75M Series C for Immersive Labs

Cybersecurity startup Immersive Labs has raised a $75 million financing led by Insight Partners, with support from Citi Ventures, Menlo Ventures and Goldman Sachs Asset Management. Based in Boston and Bristol, UK, the company uses data analysis to help organizations train their employees to ward off cybersecurity attacks; it counts HSBC and Vodafone as customers. Immersive Labs was valued at £84 million (about $119 million) in 2019, according to PitchBook data.

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HiFiBiO Therapeutics secures $75M

HiFiBiO Therapeutics has raised $75 million in a Series D led by Mirae Asset Financial Group. Founded in 2013, the company is a developer of single-cell profiling technologies designed to accelerate biotherapeutics that combat cancer and autoimmune disorders.

Select Additional Investors:

B Capital Group, Grand Mount Capital, HKSTP Ventures, IDG Capital, Maison Capital

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Portfolio Companies

Investors buy about $1B of Stripe in secondary sale

Sequoia, Silver Lake and ecommerce company Shopify are among a handful of buyers that have snatched up around $1 billion worth of stock in payments giant Stripe from existing shareholders, The Wall Street Journal reported. The shares were purchased at roughly the same price as when Stripe sold shares in March when it was valued at a reported $95 billion.

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Exits & IPOs

Boxed to go public via SPAC

Bulk grocery retailer Boxed plans to list on the Nasdaq following a merger with blank-check company Seven Oaks Acquisition Corp. The deal will give the combined entity an equity value of $900 million, more than double the $400 million valuation Boxed received last year. The New York-based company expects to receive $334 million in net cash proceeds from the transaction, which will also include a $120 million PIPE deal. Boxed reported revenue of $187 million and an EBITDA loss of $18 million in 2020. The company has been backed by investors including Hamilton Lane, Aeon Company and GGV.

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Fundraising

Flagship Pioneering closes $3.4B fund

Flagship Pioneering, the founder of Moderna, has closed its seventh flagship fund on $3.4 billion. Based in the Boston area, the firm focuses on life sciences companies. It re-opened the vehicle in April, raising an additional $2.2 billion from existing limited partners and a select group of new investors. The fund will invest in company formation and growth strategies. Flagship Pioneering now operates with a capital pool of $6.7 billion and $14.1 billion in assets under management.

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