PitchBook News - VCs fuel surge in foodtech deals

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The Daily Pitch: VC

June 22, 2021

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

Today's Top Stories

Foodtech deals surge on VC 'exuberance' even as lockdowns lift

(lemono/Getty Images)

Foodtech startups took center stage during the pandemic out of necessity. Now, they're a fixture in everyday life, even as lockdowns are coming to a close.

The shift has driven huge amounts of venture capital into the sector, with food-related tech startups raising more than $16 billion so far this year—reaching 86% of 2020's annual total in under six months.

More than 30 mega-deals in the sector have pushed the median valuation of late-stage companies to a record $160 million.

Beyond the buzzy companies raising billions, investors this year have also bet on a plethora of emerging technologies around alternative proteins, ghost kitchens and delivery robots.

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Sixth Street becomes PE's latest pro sports backer with Spurs deal

The San Antonio Spurs have a new PE backer, but the franchise isn't changing hands. (Tom Pennington/Getty Images)

San Francisco-based Sixth Street has joined the growing list of private equity firms making minority investments in pro sports franchises after the NBA and MLB have loosened ownership rules over the past few years.

Sixth Street and billionaire software entrepreneur Michael Dell have agreed to invest in the San Antonio Spurs as minority strategic partners. The firm and Dell acquired a combined 30% stake in the Spurs, valuing the franchise at around $1.8 billion, according to reports. The deal has been approved by the NBA Board of Governors and is expected to close later this week.
The news comes as a bit of a surprise after reports in February said Luxembourg-based CVC Capital Partners was in talks to acquire a 15% stake in the Spurs at a roughly $1.3 billion valuation. Regardless, the Holt family will continue as the franchise's majority owner and Peter Holt will become managing partner.
This marks Sixth Street's first investment in a sports franchise. But the firm, which spun out of TPG Capital last year, has experience in the sports market. Earlier this year, Sixth Street acquired a majority stake in Legends, a hospitality conglomerate in the sports and entertainment industry. Last year, it also launched early-stage-focused Concrete Rose Capital with the NBA's Andre Iguodala.

Related read: Sports teams and private equity pair up

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A message from InCloudCounsel

White paper: How to build better investor relationships

Private equity firms have made close to $500 billion of acquisitions this year, according to PitchBook. If the pace holds, the industry will surpass prior highs.

In a market that's larger and more competitive than ever, relationships between managers and their investors are more important than ever. At the same time, obligations in side letters, limited partnership agreements and other fund documents are growing increasingly complex.

As deal volume grows, it's critical to have fast, accurate insight into the terms of your limited partnership agreements, side letters and most-favored-nation elections. Ensuring so can help firms speed up dealmaking, reduce risk and strengthen investor trust in order to be positioned for future success.

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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 recent 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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Recommended Reads

Despite record profits, a number of executives at Google are concerned that the company is suffering from its size and leadership. [The New York Times]

The pandemic is fading and restaurants are reopening. But people across the US are still stocking up on groceries. [Bloomberg]

Investors weigh in on the importance of ESG in emerging markets and what investment opportunities could be on the horizon. [Institutional Investor]

Since yesterday, the PitchBook Platform added:

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Quick Takes


	A message from Masterworks
	The art market is on fire
	The Daily Benchmark
	2015 Vintage North American Venture Funds
	VC Deals
	SoftBank leads $240M round for German freight startup
	Securitize picks up $48M
	Cleerly collects $43M
	DataRails adds to Series A
	Portfolio Companies
	Amazon eyes stake in Plus
	Exits & IPOs
	Couchbase to go public
	Sweetgreen files for IPO

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Contemporary art prices outperformed S&P 500 returns by 174% from 1995 through 2020.
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The Daily Benchmark

2015 Vintage North American Venture Funds

Median IRR

15.99%

Top Quartile IRR Hurdle Rate

21.75%

1.48x

Median TVPI

Select top performers

Vertical Venture Partners Fund I

FirstMile Ventures 2014

OrbiMed Private Investments VI

*IRR: net of fees

48 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

VC Deals

SoftBank leads $240M round for German freight startup

SoftBank's Vision Fund 2 has led a $240 million investment in Forto, a Berlin-headquartered provider of digitized freight forwarding and supply chain solutions. The new investment pushes Forto's valuation up to $1.2 billion. Founded in 2016, Forto has more than 500 employees in 11 locations across Europe and Asia. Citi Ventures and G Squared also took part in the round, alongside existing investors including Northzone, Inven Capital, Cherry Ventures and Unbound.

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Securitize picks up $48M

Securitize, a startup that is preparing to launch a blockchain platform for trading digital asset securities, has raised a $48 million Series B co-led by Blockchain Capital and Morgan Stanley Tactical Value. The round was joined by investors including Ava Labs, IDC Ventures and Borderless Capital.

Select Additional Investors:

Migration Capital, Sumitomo Mitsui Trust Bank, Mouro Capital

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View 40 competitors »

Cleerly collects $43M

Cleerly has raised a $43 million Series B led by Vensana Capital. The New York-based company is the developer of a healthtech platform that uses machine intelligence and AI to detect and quantify the severity of coronary artery disease and other cardiovascular disorders. Cleerly was valued at $69.5 million in April 2020, according to PitchBook data.

Additional Investors:

American College of Cardiology Foundation, Cigna Ventures, LRVHealth, New Leaf Venture Partners, DigiTx Partners

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DataRails adds to Series A

DataRails has raised an additional $25 million in Series A funding from investors including Zeev Ventures and Vertex Ventures, bringing the round total to $43.5 million. Founded in 2015 and based in Tel Aviv, the company offers software to analyze and report financial data.

Additional Investors:

Innovation Endeavors, Vintage Investment Partners

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View 68 competitors »

Portfolio Companies

Amazon eyes stake in Plus

Amazon has acquired the option to purchase a stake of up to 20% in Plus, and has ordered 1,000 of the company's self-driving truck systems, Bloomberg reported. Based in China and the Bay Area, the startup is in the midst of a merger with blank-check company Hennessy Capital Investment Corp. V, which valued the combined entity at about $3.3 billion.

View details

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Exits & IPOs

Couchbase to go public

Cloud database company Couchbase has filed for a Nasdaq IPO. The company reported $103 million of revenue in the year ended January 31, growing 25% year-over-year, with a net loss of around $40 million. Accel is Couchbase's largest private backer, with a 20.9% stake, followed by North Bridge (13.7%) and GPI Capital (13%).

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View 49 competitors »

Sweetgreen files for IPO

Health-oriented restaurant chain Sweetgreen has filed confidentially to go public, Axios reported. Based in the Los Angeles area, the company was valued at $1.78 billion this past January after a $156 million funding round, according to PitchBook data.

View details

View 25 competitors »

Chart of the Day

"Sponsors' appetite for tech-enabled assets catapulted to a new quarterly zenith in Q1. A staggering 24.7% of deal value came from the IT sector in the first quarter of the year, the most on record and a decent uptick from the 20.5% recorded in Q1 2020. A year on from when lockdowns began in Europe, the ubiquitous stay-at-home orders are still largely in place, continuing to drive ecommerce, collaboration platforms, and SaaS adoption."

Source: PitchBook's Q1 2021 European PE Breakdown