PitchBook News - SoftBank's no good, very bad week

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The Weekend Pitch

January 30, 2022

Presented by Masterworks

It's been a bad week for SoftBank CEO Masayoshi Son.
(Tomohiro Ohsumi/Getty Images)

It's been a bad week for SoftBank and its CEO, Masayoshi Son.

Not only is the firm's COO, Marcelo Claure, leaving after a reported pay dispute, but portfolio company Nvidia is set to abandon its planned purchase of British chip designer Arm, denying SoftBank what could've been a $40 billion exit.

The Arm deal has been beset by hurdles all along. Just over a year after the transaction was first announced, Europe's competition watchdog launched an in-depth investigation into the matter. Then, in Washington, the Federal Trade Commission sued to block the deal on the grounds that control of Arm's chip designs would allow US-based Nvidia to monopolize the market. And a month later, the UK government chimed in by launching its own competition probe.

Nowadays such obstacles may seem par for the course for deals of this size, but Nvidia's predicament comes at a time when regulators are out to make big takeovers even harder, especially in tech. The question is what impact this will have, not just on overall M&A deals, but on exit activity. Even if the prospect of tighter rules doesn't deter dealmakers, at the very least, closing deals could become more costly and time-consuming.

I'm Andrew Woodman and this is The Weekend Pitch. You can reach me at andrew.woodman@pitchbook.com or on Twitter @adwoodman.

As it stands, the backdrop for broader merger activity is positive. Total deal value in 2021 rose to a record of nearly $5 trillion, according to PitchBook's 2021 Global M&A Report, partly driven by pent-up demand from the economic uncertainty of 2020. Last year's volume included 6,453 tech deals worth a combined $896.5 billion, a 50% year-over-year leap.

That momentum may carry over into 2022, but the threat of increased regulatory scrutiny casts a long shadow, especially in the context of antitrust and national security policy. Tech giants, in particular, are in regulators' crosshairs—none more so than the big five: Alphabet, Amazon, Apple, Meta (formerly Facebook) and Microsoft.

Quote/Unquote

"This feels very much like what happened at the beginning of the pandemic, where there was a shock to the system. And everyone said, 'I don't know what this shock really means, but let's slow down for a little bit.'"

—Frank Rotman, co-founder and partner at QED Investors, on how the recent sell-off in the stock market is impacting late-stage funding rounds

Did you know ...

Eight of Latin America's most valuable startups are based in São Paulo, Brazil. (Rafael Paulucci/Getty Images)

… That Brazil and Mexico are home to 14 of the 21 most valuable startups in Latin America, with eight headquartered in São Paulo alone?

Check out our interactive graphic depicting which global investors have backed the region's most valuable startups. And yes, SoftBank is leading the pack.

Deal Flow

In 2021, a bevy of private equity firms flocked to lucrative stakes in sports teams as franchise valuations soared. Investors also targeted the media industry, with music catalog deals continuing to be a hot ticket item.

From Dyal Capital Partners and the NBA to Apollo Global Management and Yahoo's news division, here's a closer look at some of the most notable sports, media and entertainment deals and investors of the past year.

Datapoints

(adventtr/Getty Images)

Subscription-based healthcare startups, which offer fixed fees rather than the traditional fee-for-service billing method, are gaining significant interest from venture investors. Last year, PitchBook tracked 21 such companies that raised $7.7 billion in aggregate from VCs—nearly 13 times more than 2020's funding total.

Our recent analyst note on the topic details key direct-to-consumer providers in this niche sub-segment of the primary and specialty care landscape, exploring why scalability will play a crucial role in how the business model generates profits.

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When Ann Lai quit her high-profile job at Binary Capital in 2016, she realized that legally, she had no narrative. So, she set out to seize it back. [Elle]

Meet 93-year-old Pierre Heckmann, one of the last ivory sculptors in Europe. [The New York Times]

Generation Z wants products that are personalized and reflect their values and desire for community. Is the fintech industry up to the challenge? [The Wall Street Journal]

The fascinating story of a remote village in Norway, warehouse robots, and an epic legal battle. [Financial Times]

The metaverse might be the most important tech trend since the iPhone, or it could be the next dot-com bust. Why Wall Street thinks it will be worth trillions. [Fortune]

From Montreal to Paris, urban beekeeping is big business. But what happens when every company decides to put a beehive on the roof? [Fast Company]

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

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PitchBook News - SoftBank's no good, very bad week

Quote/Unquote

Did you know ...

Deal Flow

Datapoints

Recommended reads

Older messages

Tech helps drive a $5T M&A boom

US VC sets trifecta of major records

Global M&A rockets to nearly $5T in 2021

Stock market sell-off hits pre-IPO valuations

Subscription healthcare gains traction

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