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The Daily Pitch: VC

June 23, 2021

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

Today's Top Stories

Blackstone bets on soaring US housing market with $6B buyout

(krisanapong detraphiphat/Getty Images)

For more than a decade, Blackstone has poured money into the US residential real estate market. Now the buyout giant has made a significant bet on the country's booming housing market with a mega-deal for a company that buys and leases single-family homes.

The firm's real estate arm has agreed to acquire a majority stake in Home Partners of America in a deal that values the company at $6 billion. Based in Chicago, HPA owns over 17,000 homes across the US, offering rent-to-own programs for residents who eventually want to buy a house.

The deal comes as much of the US middle class struggles to find affordable housing. The median US home price reached a record $350,000 in May, marking the biggest annual increase in at least 20 years, according to the National Association of Realtors.

Blackstone previously launched Invitation Homes, another rental company, following the 2008 housing collapse, buying up large swaths of foreclosed single-family homes. The company raised $1.5 billion in an IPO in 2017, with Blackstone selling the rest of its stake for more than $1.7 billion two years later.

The firm invested $300 million last year in Tricon Residential, a Canadian operator of single-family housing rentals.

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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 recent 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

The frontier of innovation & key challenges in the fintech 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, 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

Read it now

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Fintech company Mollie worth $6.5B with Series C

(miakievy/Getty Images)

Payments provider Mollie has become one of Europe's most valuable companies with an $800 million investment valuing it at $6.5 billion.

Blackstone Growth led the round, with support from investors including EQT Growth, General Atlantic and TCV. The funds will be used for its international expansion, recruitment and product development.

The Series C makes Mollie the third-most valuable fintech company in Europe, according to PitchBook data, following Klarna and Checkout.com. Founded in 2004, Mollie was valued at $1 billion in September, according to a PitchBook estimate. It has raised over $940 million in VC funding to date.

Based in Amsterdam, Mollie serves more than 120,000 active merchants per month. It processed over €10 billion (around $12 billion) in transactions last year and expects that figure to surpass €20 billion in 2021.

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Recommended Reads

An interview with Malone Mukwende, the medical student behind a health platform intended to teach people how conditions look on different skin tones. [Time]

Remote work has become the norm for many workplaces over the past year. And several of the world's key financial centers are struggling to get employees back in their offices. [Bloomberg]

For 50 years, the Zodiac killer has gone unidentified. Then a French engineer claimed to have cracked the unsolved ciphers attributed to the case. [The New York Times]

Since yesterday, the PitchBook Platform added:

22

VC valuations

1972

People

480

Companies

22

Funds

See what our data software can do

Quick Takes


	The Daily Benchmark
	2018 Vintage North American Real Estate Funds
	A message from West Monroe
	How deal teams & operating partners can use analytics to increase deal conviction
	VC Deals
	Transmit Security hauls in $543M
	Hong Kong-based Insilico Medicine raises $255M
	G2 picks up $157M Series D
	Primer books $110M
	CommerceIQ lands $60M

The Daily Benchmark

2018 Vintage North American Real Estate Funds

Median IRR

2.01%

Top Quartile IRR Hurdle Rate

8.22%

1.02x

Median TVPI

Select top performers

LEM Multifamily Fund V

Blue Heron Real Estate Opportunity Fund III

HighBrook Property Fund III

*IRR: net of fees

50 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

A message from West Monroe

How deal teams & operating partners can use analytics to increase deal conviction

Join PitchBook and West Monroe for a lively discussion recapping the first half of the year and diving deep with an expert panel on how private equity firms can make better data-driven decisions.

Topics to be covered:

Key findings from the PitchBook Q2 2021 US PE Breakdown
How financial sponsors are leveraging analytics to forecast the impact of COVID-19 on customer and revenue growth
How data science can increase conviction in a competitive deal process
Examples of analytics identifying and quantifying revenue opportunities that can be unlocked during the hold period

Register for the July 21 webcast

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VC Deals

Transmit Security hauls in $543M

Transmit Security, a provider of passwordless ID authentication services, has raised $543 million in the largest Series A ever for a cybersecurity company, according to PitchBook data. Insight Partners and General Atlantic led the round, which valued Transmit Security at $2.2 billion.

Additional Investors:

CyberStarts, Geodesic, SYN Ventures, Vintage Capital Investments

View round

View 51 competitors »

Hong Kong-based Insilico Medicine raises $255M

Insilico Medicine, which uses AI to discover and develop drugs, has secured a $255 million Series C led by Warburg Pincus. Investors including Qiming Venture Partners, OrbiMed and Sequoia China also participated. The Hong Kong-based company plans to use its new funding for clinical trials and to research additional novel molecules.

Select Additional Investors:

Eight Roads, Baidu Ventures, B Capital Group, Lilly Asia Ventures

View round

View 15 competitors »

G2 picks up $157M Series D

G2 has raised $157 million at a more than $1.1 billion valuation in a round led by Permira. Based in Chicago, the startup operates a software marketplace designed to help companies such as Salesforce and Zoom research, buy and manage software and services. G2 was valued at $400 million in 2018, according to PitchBook data.

Select Additional Investors:

Accel, Emergence Capital, IVP, LinkedIn

View round

View 62 competitors »

Primer books $110M

Primer has raised a $110 million Series C led by Addition. The San Francisco-based company offers a platform to automate the analysis of large datasets. The business was valued at $190 million in 2018, according to PitchBook data.

Select Additional Investors:

Amplify Partners, Avalon Ventures, DCVC, Lux Capital, Sands Capital

View round

View 50 competitors »

CommerceIQ lands $60M

Palo Alto-based CommerceIQ has raised $60 million in a Series C round led by Insight Partners. The company is the developer of an ecommerce management platform designed to help brands access marketing and sales insights on marketplaces including Walmart and Amazon.

Additional Investors:

Madrona Venture Group, Shasta Ventures, Trinity Ventures

View round

View 98 competitors »

Join us on June 24 as we discuss fund return smoothing and dive into ways to "desmooth" returns, allowing for a more accurate representation of the performance and volatility of private market funds.

In the latest edition of our ongoing PitchBook Private Fund Strategies webinar series, formerly the PitchBook Benchmarks series, we'll start with updated performance and fundraising data, and then put a spotlight on the issue of private market fund return smoothing. Mark-to-market accounting and conservative valuations can produce misleading, artificially smoothed private market returns. As a result, volatility may be significantly understated, causing diversification benefits to be overstated.

We will explore topics including:

Background and reasons for fund return smoothing.

How smoothing leads to deceptive returns.

How to apply desmoothing techniques to measure volatility in private market funds more accurately.

Register now

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Chart of the Day

Source: PitchBook's Q1 2021 US VC Valuations Report

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