PitchBook News - On the podcast: 'The Cult of We'

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The Daily Pitch: VC

August 3, 2021

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

Today's Top Stories

On the podcast: 'The Cult of We'

To kick off the new season of "In Visible Capital," Eliot Brown, a reporter for The Wall Street Journal, joins the show to discuss "The Cult of We: WeWork and the Great Start-Up Delusion," the book he co-authored with Maureen Farrell detailing the rise and fall of WeWork.

Hear stories uncovered during their in-depth reporting as co-host Alec Davis and Brown dig into the lessons that investors can take from this tale.

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Seeding and anchoring: Options for accelerating the first-time fundraise

(Matthias Kulka/Getty Images)

Competition to raise a new PE fund has never been fiercer. Despite the high quality of new managers seeking capital, first-time vehicles as a proportion of closed PE funds declined in 2020 and again in H1 2021.

PitchBook's latest analyst note breaks down how seed and anchor commitments can help accelerate fundraising processes for new managers. A few key takeaways include:

An anchor is a large LP commitment accompanied by fee and carry discounts. In a seed deal, in exchange for making a substantial fund commitment and (in some cases) providing operating capital, the seeder receives an economic share in the GP, the management company, or both.

Most LPs that seed or anchor first-time funds fall into one of five categories: sponsors, large institutional LPs, funds of funds, family offices, or endowments.

The decision whether to take a seed or anchor is unique to each manager. Would-be first-time fund managers need to weigh the economics they'll be giving up against the potential benefits. Seeders must be highly selective in the managers they choose to back in order to avoid adverse selection effects.

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A message from Mercer

The key to successful dealmaking

The foundation of value creation is people. As recent Mercer research reveals, nearly half of deals that fail do so primarily due to inability to strategically identify and address people issues. How can these be avoided?

Mercer has conducted an in-depth survey of deal professionals worldwide, spanning Fortune 1000 companies to PE funds. Drawing from the survey's findings and PitchBook datasets, Mercer has created a comprehensive report that examines multiple aspects of the importance of people to value creation in transactions. Key findings include:

What the top priorities are for dealmakers as they embark on transactions, given the current market environment
Which aspects of people issues drive the most success in deals
How dealmakers' priorities across the transactional lifecycle have evolved over the past year

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Bolt hits $4.75B valuation as it looks to grocery delivery

(Courtesy of Bolt)

Ridehailing startup Bolt has raised €600 million (about $712 million) as it plans to enter the online rapid grocery delivery market.

The fresh funding values the Estonia-based company at over €4 billion (about $4.75 billion) and came from investors including Sequoia, D1 Capital and G Squared.

Bolt will plow some of the cash into a 15-minute grocery delivery service, Bolt Market, which it plans to launch in 10 European countries over the next few months. The company will also invest in existing services such as restaurant food delivery, car-sharing, and scooter and bike rentals.

The rapid grocery delivery market has become fiercely competitive in Europe during the pandemic. The sector has attracted hundreds of millions of dollars from VCs and is starting to reach a saturation point in many markets.

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Recommended Reads

SPAC timelines are getting shorter and shorter—many that unveiled listing plans last week intend to merge within 12 months. [Bloomberg]

Bitcoin is infamous for its environmental baggage, but new miners hope there may be big profits in clean crypto. [Forbes]

Tax breaks and hopes for better returns are some of the reasons private equity firms are buying listed companies at a record rate. [The Economist]

Since yesterday, the PitchBook Platform added:

19

VC valuations

1497

People

434

Companies

50

Funds

See what our data software can do

Quick Takes


	The Daily Benchmark
	2013 Vintage Global Venture Funds with less than $250M
	A message from Masterworks
	The next $6 trillion gold rush isn't just coming: It's already here
	VC Deals
	Unacademy raises $440M
	Nozomi Networks secures $100M
	Kuda Bank hits $500M valuation with Series B
	Finite State raises $30M Series B
	Pet pharmacy startup reels in $20M
	Fundraising
	BoxGroup closes on $255M for two new funds
	Element Ventures raises $130M fintech fund
	Newtopia VC launches Latam tech fund
	Corporate M&A
	Square to buy Afterpay

The Daily Benchmark

2013 Vintage Global Venture Funds with less than $250M

Median IRR

12.69%

Top Quartile IRR Hurdle Rate

22.52%

1.35x

Median TVPI

Select top performers

YLV II

G Squared I

Dawn Capital II

*IRR: net of fees

28 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

A message from Masterworks

The next $6 trillion gold rush isn't just coming: It's already here

There is an untapped asset class that has been around for centuries. Yet, only the 0.0001% had access due to high entry costs and limited supply. Most of the big players have a net worth in the billions, not millions.

It's not venture capital or private equity, or anything related to cryptocurrency.

It's blue-chip art.

To invest in contemporary art, you needed tens of millions of dollars to build a proper portfolio.

But no longer.

Masterworks has fractionalized investments in works by Banksy, Picasso and Warhol so you can invest at a portion of the typical purchase price.

In a recent interview with Masterworks founder Scott Lynn, Jim Cramer proclaimed that only two things hold their value during hyper-inflation, "mansions and Masterworks."

Watch here*

*See important disclaimer

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VC Deals

Unacademy raises $440M

Indian edtech company Unacademy has raised $440 million at a $3.44 billion valuation. Temasek led the Series H round, with participation from SoftBank, General Atlantic and Tiger Global. Unacademy was reportedly valued at $2 billion last year.

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Nozomi Networks secures $100M

Cybersecurity startup Nozomi Networks has raised a $100 million round led by Triangle Peak Partners, with participation from Honeywell Ventures, In-Q-Tel, Keysight Technologies, Telefónica Ventures and Porsche Ventures. The San Francisco-based startup sells security solutions for large companies in industries such as oil and gas, pharmaceuticals and mining. Nozomi was valued at $140 million in a Series C round in 2018, according to PitchBook data.

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Kuda Bank hits $500M valuation with Series B

Kuda Bank has raised a $55 million Series B at a valuation of $500 million, TechCrunch reported. Valar Ventures and Target Global reportedly led the funding, with participation from SBI and several angel investors. Based in London, Kuda offers a debit card and operates a mobile-only neobank in Nigeria. The company, which raised $25 million in March, will reportedly use the new funds in part to expand to other countries in Africa.

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Finite State raises $30M Series B

Finite State, a provider of security solutions for connected devices and infrastructure within software supply chains, has raised a $30 million Series B. Energize Ventures led the funding, with participation from Schneider Electric and Merlin Ventures. Columbus, Ohio-based Finite State was valued at $32.5 million last year, according to PitchBook data.

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Pet pharmacy startup reels in $20M

Mixlab has raised a $20 million round led by Sonoma Brands, with support from Global Founders Capital, Monogram Capital, Lakehouse Ventures, Brand Foundry and other backers. Founded in 2017 and operating out of New York and Los Angeles, Mixlab provides an online pet pharmacy with custom veterinary medications. Sonoma Brands operating partner Keith Levy will join the startup's board.

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Fundraising

BoxGroup closes on $255M for two new funds

New York-based venture capital firm BoxGroup has raised $255 million for two new funds, TechCrunch reported. The first fund, BoxGroup Five, will target emerging tech companies at the pre-seed and seed stages. The second, BoxGroup Strive, will back businesses in follow-on rounds. Each fund closed at $127.5 million.

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Element Ventures raises $130M fintech fund

London-based Element Ventures has closed a $130 million fund that will invest in B2B fintech startups at the Series A and B stages. The fund is backed by NEX Group founder Lord Spencer, as well as Isomer Capital, Ullink founder Laurent Useldinger and others. Element's portfolio includes bill payment company Billhop and insurtech platform Hepster.

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Newtopia VC launches Latam tech fund

Newtopia VC has closed its first fund on $50 million, which will be used to focus on tech startups in Latin America, TechCrunch reported. The fund plans to make investments of $100,000 in pre-seed startups and investments of between $250,000 and $1 million in seed-stage startups.

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Corporate M&A

Square to buy Afterpay

Square plans to acquire buy-now, pay-later company Afterpay for about $29 billion in an all-stock deal. Afterpay, which is publicly traded in Australia, was previously considering an IPO in the US, Reuters reported in April. The company has been backed by Matrix Partners; Dana Stalder, a partner at the VC firm, serves on the board as an independent director.

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View 7 competitors »

Chart of the Day

"The strength in the public markets has meaningfully contributed to the spike in exit value and volume—one not seen in a decade. In Q2 2021, 29 public listings worth €34.8 billion closed, marking YoY increases of 314.3% and 148.4%, respectively. Strong liquidity in the capital markets from the pandemic-induced stimulus, rising investor sentiment due to quickening vaccine rollouts, the addition of SPAC acquirers, and soaring liquid markets' valuations have radically pushed more sponsors to exit through public listings."

Source: PitchBook's Q2 2021 European PE Breakdown