PitchBook News - Middle market remains red-hot

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The Daily Pitch: VC

September 16, 2021

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

In today's Daily Pitch, you'll find:

500 Startups has rebranded as 500 Global as part of its new strategy of backing companies at the later stages.

Despite macroeconomic headwinds, the US PE middle market continued to thrive in Q2. From exits to fundraising, our latest report breaks it all down.

Today's Top Stories

US PE middle-market dealmaking remains red-hot

Despite several macroeconomic headwinds, middle-market PE dealmaking in the US has continued its unprecedented run, supported by continued economic recovery and significant capital availability.

In our latest US PE Middle Market Report, sponsored by Antares, SRS Acquiom and Baker Tilly, PitchBook analysts break down the middle-market environment during Q2 2021. A few key takeaways:

Add-ons continued their trend of more than a decade and increased as a share of PE deals. Middle-market PE firms sought to add on mid-sized aggregators and pursue transformational M&A to scale up platforms, diversify and expand along the value chain, or incorporate ESG values.

Even as exits to strategics lagged, attractive valuations and investor confidence led to healthy exit activity in the middle market, especially in sponsor-to-sponsor deals.

Middle-market fundraising set off at a rapid clip in the first half of 2021. Buyout firms benefited from LPs' robust appetite for private markets exposure and the unprecedented dealmaking activity that allowed firms to deploy capital and return to fundraising at a breakneck pace.

read the report

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500 Startups rebrands as 500 Global, expands strategy to later-stage companies

(sarayut Thaneerat/Getty Images)

500 Startups, a venture capital firm and accelerator that has made hundreds of small bets in seed- and early-stage companies since its founding in 2010, is rebranding as 500 Global and expanding beyond its roots with a new $140 million flagship fund that will target later-stage businesses.

The latest fund is the firm's largest vehicle to date. It brings the firm's total assets under management to $1.8 billion.

The new strategy will allow the firm to invest in successful portfolio companies as they mature, lead later-stage rounds and offer co-investment opportunities to limited partners.

In addition to its flagship funds, 500 Global manages regional funds in countries like South Korea, Thailand and Vietnam. The firm's portfolio includes 33 unicorns, including Australia-based Canva, worth $40 billion, and Singapore's Grab, which has announced plans to go public via a SPAC at a nearly $40 billion valuation.

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A message from ON Partners

ON Partners places top PE executives in 2021

Named to the "Private Equity Recruiting Power 75" ranking of the most prominent executive search firms serving the sector, ON Partners brings deep experience in the growth, venture and private equity space.

ON has partnered with hundreds of PE clients to build leadership and board teams, contributing to the firm's overall 89.3% growth over a three-year period.

This year alone, the ON executive search team has placed senior executives with both funds and PE-backed organizations, including BetterCloud, Marlin Equity Partners, Nexa, OpenKey, ParkMobile and Realwear, among others.

To learn more about how ON consultants are redefining executive search and helping PE funds and their portfolio companies build winning teams, click here.

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Antin seeks $4.9B valuation in Paris IPO

(bjdlzx/Getty Images)

Antin Infrastructure Partners is set to join a growing club of public PE firms when it launches its IPO on Euronext Paris later this month with a valuation that could reach €4.1 billion (about $4.9 billion).

The Paris-based firm would raise at least €550 million in the offering, based on its target range of €20 to €24 per share. Trading is expected to begin Sept. 24.

Antin would follow major European private equity investors that have gone public in recent years, including the UK's Bridgepoint, Sweden's EQT and fellow French firm Tikehau Capital.

The surge comes as firms seek to tap into a growing appetite among retail investors for PE stocks—and those that have already gone public are performing well.

Recommended Reads

It costs between $600 and $800 for Iceland's new Orca carbon capture plant to suck 1 ton of carbon dioxide from the air, but that's just the beginning. [The Economist]

Robinhood is seeking to attract more novice investors as it turns to college campuses to recruit younger customers. [The Wall Street Journal]

Shares in Chinese cosmetic surgery companies are falling as investors guess the industry will be the next to see regulation. [Financial Times]

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Quick Takes


	The Daily Benchmark
	2020 Vintage Global Secondaries Funds
	A message from Citizens Commercial Banking
	Asset-based lending: Fewer covenants, attractive pricing
	VC Deals
	Canva soars to $40B valuation
	SmartNews hits $2B valuation
	Persona picks up $150M Series C for identity verification tech
	Abra banks $55M for crypto investing platform
	Exits & IPOs
	Roger Federer-backed On jumps in IPO
	Glassdoor acquires VC-backed Fishbowl
	Fundraising
	Lever VC closes debut vehicle at $80M

The Daily Benchmark

2020 Vintage Global Secondaries Funds

Median IRR

35.77%

Top Quartile IRR Hurdle Rate

95.02%

1.32x

Median TVPI

Select top performers

Greenspring Secondaries Fund IV

Inveready Civilon

Dover Street X

*IRR: net of fees

11 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

A message from Citizens Commercial Banking

Asset-based lending: Fewer covenants, attractive pricing

Asset-based lending (ABL) has been used to effectively fund middle-market firms through the peaks and valleys of the business cycle.

Whether corporate cash flows are low or you need to meet rising demand, ABL can be a flexible financing solution.

Explore ABL and its many advantages—such as increased flexibility, fewer covenants and attractive pricing compared with similar cash flow-based loan structures—to see if an ABL solution is right for your company.

Learn about the flexibility of ABL

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VC Deals

Canva soars to $40B valuation

Canva has raised $200 million at a $40 billion valuation in a round led by T. Rowe Price. The Sydney-based company is the developer of a visual communication and collaboration platform. Canva was valued at $15 billion this past April.

Additional Investors:

AirTree Ventures, Bessemer Venture Partners, Blackbird Ventures, Dragoneer Investment Group, Felicis Ventures, Franklin Templeton, Greenoaks Capital, Sequoia

View round

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SmartNews hits $2B valuation

SmartNews, which offers a news-discovery app, has raised a $230 million Series F at a $2 billion valuation from investors including Princeville Capital and Woodline Partners. The company was valued at about $1.1 billion in 2019.

Additional Investors:

ACA Investments, Green Co-Invest Investment, JIC Venture Growth Investments, SMBC Venture Capital, Yamauchi-No.10

View round

View 15 competitors »

Persona picks up $150M Series C for identity verification tech

Persona has raised $150 million at a $1.5 billion valuation in a round led by Founders Fund, with support from Meritech Capital Partners, Bond, Index Ventures and Coatue. The Bay Area-based company is the developer of a platform that helps enterprise customers such as Coursera and DoorDash manage and automate customer identity verifications. Persona was valued at $335 million with a $50 million round in May, according to PitchBook data.

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Abra banks $55M for crypto investing platform

Abra has raised a $55 million Series C co-led by Ignia and Blockchain Capital. Kingsway Capital, Tiga Investments and Stellar Development Foundation also supported the round, along with other investors. Founded in 2014, the Bay Area-based company is the developer of a wealth management platform for cryptocurrency investors.

Additional Investors:

American Express Ventures, Arbor Ventures, Kinetic Advisors, Lerer Hippeau Ventures, RRE Ventures, CMT Digital

View round

View 36 competitors »

Exits & IPOs

Roger Federer-backed On jumps in IPO

On Holding has priced its public offering at $24 per share, above the target range of $20 to $22 per share, valuing the shoe company at over $6 billion. The total offering comprised 31.1 million shares, with On selling 25.4 million to raise more than $610 million. The stock jumped in its first day of trading, opening above $35 per share and soaring to $38 before dipping to close at $35.10. The Swiss shoe brand is backed by investors including tennis legend Roger Federer, Point Break Capital and Stripes.

View details

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Glassdoor acquires VC-backed Fishbowl

Job search and company review website Glassdoor has bought Fishbowl, a career-focused social network. The startup's app lets users join interest-based discussion groups and anonymously share feedback about specific companies, content that will be integrated into Glassdoor's website. Fishbowl has previously raised funding from investors including GGV Capital and Arena Ventures.

View details

View 1 competitors »

Fundraising

Lever VC closes debut vehicle at $80M

Lever VC has announced a final close of $80 million for its first flagship VC fund. The New York-based firm primarily invests in early-stage startups offering alternative protein products. Its portfolio includes Bond Pet Foods, a developer of vegan food for animals, and TurtleTree, a creator of cell-based milk. Lever VC plans to begin raising funds for a second vehicle early next year.

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View 17 investments »