Rivian's IPO and the shifting mobility sector

Read online | Don't want to receive these emails? Manage your subscription.

PitchBook

Log in

The Weekend Pitch

November 7, 2021

Presented by Dropbox

(Courtesy of Rivian)

Rivian's blockbuster IPO promises to keep Wall Street riveted over the coming days, and for good reason.

The EV company that many consider the Tesla of truck makers is poised to go public worth upward of $70 billion, no small feat for a startup whose vehicles are just hitting the market this year.

But the financial success story behind Rivian's gambit is emblematic of a much larger shift that could make waves in the private markets for many years to come.

I'm Alexander Davis, this is The Weekend Pitch, and today we'll explain what the Rivian IPO tells us about the new direction of the mobility-focused venture market. Contact me at alec.davis@pitchbook.com and follow me on Twitter @alecdavis.

Rivian, mobility and the race for a net-zero future

In some ways, Rivian may seem an unlikely candidate for the next tech sensation to wow Wall Street.

The big money backing the EV industry's hottest IPO in years didn't come from Silicon Valley's usual cast of mainstream VC characters. Rather, Rivian raised capital through a mix of strategic and financial investors from the old economy and the new that at first glance may seem strange bedfellows: Corporates with ties to the legacy automotive industry co-investing alongside the most powerful ecommerce mogul in the world.

And yet, this kind of grouping of investors is now common on cap tables of startups in autonomous driving, micromobility and last-mile delivery in addition to the red-hot EV ecosystem. Of the roughly $75 billion in VC-backed global mobility deals this year, the majority had participation from corporate venture capital (mainly from the auto sector), according to PitchBook data.

Quote/Unquote

"The equity holding by employees [in Europe] has increased significantly and that's continued to rise. It gives us a better ability to compete with US companies, because we are giving more to our top talent."

—Reshma Sohoni, co-founder of London-based VC firm Seedcamp.

Europe's pay for startup jobs is low compared to the US, putting it at a disadvantage in the battle for talent. But a key factor to attracting top employees in the region lies in access to stock options—a popular way for startups to compete against huge corporations like Google or Meta Platforms (formerly Facebook).

Deal Flow

So far in 2021, Andreessen Horowitz has participated in nearly 40% of all VC deals by value for non-fungible token companies, consistently going after the biggest names in the niche industry, including Axie Infinity, Dapper Labs and Forte.

But the VC stalwart isn't the most prolific investor in NFTs—Animoca Brands holds that title with 26 deals to date.

Datapoints

Private capital funds, and VC strategies in particular, have seen stellar returns in recent quarters thanks in part to a robust exit environment. But much of those returns remain unrealized and are based on estimated valuations, presenting the risk that these heady times for private fund managers may prove ephemeral.

Our latest fund performance report dives deep on the gravity-defying performance of private market vehicles.

Did you know ...

…That 14 out of the 35 global edtech companies valued at $1 billion or more were minted in 2021?

During the first 10 months of 2021, investors funneled $13.8 billion into edtech startups, surpassing the sector's global venture funding for all of 2020, according to PitchBook data.

That capital infusion paved the way for a bevy of notable public debuts in the category, including Coursera, Duolingo and Udemy.

Recommended reads

23andMe CEO Anne Wojcicki wants to use insights from customer DNA samples to create treatments for a variety of diseases. But some privacy advocates argue that the company's intentions are not transparent enough. [Bloomberg]

The electric car revolution is fully underway, but the vehicles' batteries present a challenge for the world's electrified future. [Wired]

In the wake of Facebook's recent name change, one writer argues that we're already living in the social media giant's so-called metaverse. [The New Yorker]

Slow Ventures GP Sam Lessin on why investing directly in people rather than companies is the future of VC. [The Information]

Workers in the leisure and hospitality sectors are getting paid more than ever. For many, it's still not enough. [Recode]

How the predictive power of the tech that's being used to monetize our behavior could also be changing our very neurochemistry. [The Atlantic]

This edition of The Weekend Pitch was written by Alexander Davis, Priyamvada Mathur and James Thorne. It was edited by Angela Sams and Sam Steele.

Were you forwarded The Weekend Pitch? Sign up at pitchbook.com/subscribe.