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| First financings' share of total VC deal value keeps on shrinking | |  | | (Micheile Henderson/Unsplash) | | | First-time equity investments in startups continued to decline this year, with the capital in Q3 representing 5.5% of the total VC deal value, according to PitchBook data.
We broke down the data and spoke with venture investors and startup founders to explore what's driving the downward trajectory: | | | | | | | | | | New competition emerges for PE's tech titans | |  | | (Christoph Burgstedt/Getty Images) | | | Specialists such as Thoma Bravo and Vista Equity Partners have been raising tech-focused private equity funds for well over a decade. Lately, large generalist investors have also been getting in on the act, chasing the superior returns that tech-focused funds have generated in recent years compared with other buyout and growth vehicles.
What will it mean for the industry as firms like KKR and The Carlyle Group continue to embrace tech dealmaking? Our latest analyst note outlines the latest developments in the space, including potential benefits of scale for major firms and a new wave of specialist tech investors that's on the horizon: | | | | | | | |
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| A message from SS&C Intralinks | | |
| Risky business: Deal leaks are back | | The just-released 2020 SS&C Intralinks M&A Leaks Report examines why this high-risk, high-reward strategy—after years of trending downward—is back and more pervasive than ever. The report, produced in association with Acuris Studios and The M&A Research Centre at The Business School (formerly Cass), City University of London, looks at more than 8,000 deals over the past decade. Download it now to learn: - Which region had the most M&A leaks ever recorded last year?
- Which M&A leak statistic is the most remarkable in a decade?
- What effect do M&A leaks have on premium gains?
Download the report now. | | | | | | | |
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| Stripe expands its reach into Africa with Paystack deal | |  | Stripe co-founders Patrick Collison and John Collison
(Courtesy of Stripe) | | | Stripe is putting its hefty war chest to use with the acquisition of Nigerian payments company Paystack.
The San Francisco-based payments giant is reportedly paying $200 million for the startup as it looks to expand beyond North America, Europe and Asia. In May, Stripe widened its reach in Europe, launching in the Czech Republic, Romania, Bulgaria, Cyprus and Malta.
With over $2 billion on its balance sheet, Stripe has not only focused its spending on expanding its global footprint and growing its platform, but has also made several venture capital bets.
Stripe led Paystack's $10 million Series A in 2018, with Visa, Tencent and Y Combinator chipping in on that funding round. This year, the company has invested in six startups, including Fast, Monzo and PayMongo, according to PitchBook data. Last year, it invested in eight companies.
Earlier this year, Stripe extended its Series G with an additional $600 million, giving the company an estimated value of $36 billion. That would make the business one of the most valuable private companies in the US, according to PitchBook data. | | | | | | | | | | Industry experts are seeing a new trend emerge in corporate real estate: Out with the skyscraper, in with the groundscraper. [The New York Times]
As a SPAC craze envelops the electric vehicle space, a founder named Robert Bollinger is facing a question: To merge, or not to merge? [Bloomberg]
Clear's business is largely intertwined with airports. But despite a plunge in air travel—and thanks in part to its touchless technology—the company is beginning to bounce back. [OneZero] | | | | | |
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| | Since yesterday, the PitchBook Platform added: | | 325 Deals | 1333 People | 379 Companies | 30 Funds | | | | | | |
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| 2018 Vintage Global Real Assets Funds | | | | | | |
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| GV promotes first Black woman to partner | | | Terri Burns has become GV's first Black female partner after being elevated to the role. Burns joined the Alphabet venture capital arm three years ago as a principal and is now the firm's youngest partner ever. This year, she led two early-stage consumer investments in HAGS, a yearbook app powered through Snapchat, and also invested in another company that's still to be announced. | | | | | | | | | | | | |
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| | | | | | | | | 98point6 gets $118M for Series E | | | 98point6, which operates a platform for chat-based consultations with physicians, has raised $118 million in a round co-led by L Catterton and Activant Capital. Founded in 2015, the Seattle-based healthcare company raised a $50 million Series C in 2018 at a $170 million valuation, according to PitchBook data. | | | | | | | | Payments company Fivestars lands $52.5M | | | | | | | | | | Alfred has raised a $42 million Series C from Spark Capital, NEA, Greystar and 166 2nd, the family office of WeWork founder Adam Neumann. The New York-based company is the developer of an on-demand concierge and building management platform that serves more than 100,000 homes across the US. | | | | | | | | Whisper secures $35M Series B | | | Medical device startup Whisper has raised a $35 million Series B led by Quiet Capital, with participation from Sequoia, First Round Capital and IVP. The San Francisco-based company offers a hearing aid system with upgradeable software; it has raised $53 million to date. | | | | | |
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| Accel-KKR stakes surgical software business | | | | | | | | | Wind Point takes over Handgards | | | Wind Point Partners has acquired Handgards, a Texas-based provider of disposable safety and hygiene products for the food service industry. Joe Kubicek, who previously served as president of Ansell's global healthcare business, has joined Handgards as CEO. | | | | | | | | Summa Equity snags Sengenics | | | Summa Equity has acquired a majority stake in Sengenics, a provider of research technology that focuses on the large-scale study of proteins and the immune system. The company's management team will retain an ownership stake in the business. | | | | | |
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| PE-backed YogaWorks enters Chapter 11 | | | YogaWorks, a Southern California-based operator of boutique yoga studios, has entered Chapter 11 bankruptcy protection, with Serene Investment Management agreeing to buy the chain's digital and education business and intellectual property. Serene will also provide debtor-in-possession financing to keep the company operational. Great Hill Partners has owned YogaWorks since 2014. | | | | | | | | Robinhood probe finds 2,000 accounts possibly hacked | | | Nearly 2,000 Robinhood accounts were compromised in a recent hacking attack, according to Bloomberg. Last week, cybercriminals reportedly breached user accounts on the online trading platform, potentially gaining access through personal email accounts. The company sent push notifications to users this week, urging them to set up two-factor authentication on their accounts, the report said. | | | | | |
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| Array shares soar after PE-backed solar IPO | | | Stock in Array Technologies closed its first day of trading up nearly 66% after the Albuquerque-based company's IPO. Array, which develops ground-mounting systems for solar energy projects, priced its offering of 47.5 million shares at $22, higher than its expected range, to raise more than $1 billion. Oaktree Capital Management, which has backed the company since 2016, retains a majority stake in Array in conjunction with company founder Ron Corio. | | | | | | | | Chinese retailer Miniso opens trading in US | | | Miniso Group, a Chinese consumer goods retailer, closed its first day of trading Thursday on the NYSE up over 4%, at $20.88. The Chinese company, backed in part by Tencent, raised $608 million in its IPO by selling 30.4 million American depositary shares for $20 apiece, above the expected range of $16.50 to $18.50. | | | | | |
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| Arbor Investments pulls in $1.5B for latest flagship vehicle | | | Arbor Investments has closed its fifth flagship fund on $1.5 billion and a separate debt fund on $168 million, bringing the firm's total assets under management to $2.9 billion. With offices in New York and Chicago, Arbor typically acquires companies in the food and beverage industries. The firm closed its fourth flagship fund on $765 million in 2016. | | | | | | | | Khosla Ventures readies latest funds | | | Khosla Ventures has set a $1.1 billion target for its seventh flagship fund and a $400 million target for a new seed vehicle, according to SEC filings. The Menlo Park-based firm pursues investments in sectors including financial services, healthcare, sustainable energy and robotics. | | | | | | | | True Ventures lands $840M for two new funds | | | True Ventures has closed two new vehicles with $840 million in total commitments, including its seventh early-stage fund with $465 million and a $375 million select fund for follow-on financings. Based in the Silicon Valley, True Ventures has more than $2.8 billion in assets under management and typically backs early-stage tech companies. | | | | | | | | Openview picks up $450M for sixth fund | | | Openview Venture Partners has closed its sixth fund on a hard cap of $450 million. The Boston-based firm tends to invest in business software companies, with a portfolio that includes Calendly, Highspot and Expensify; it manages $1.5 billion in capital. | | | | | |
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| Nestlé seeks $5B with water divestitures | | | Nestlé has launched a sale process for its portfolio of North American water brands, with hopes of finding a buyer who will pay around $5 billion, according to Reuters. The assets, which include Poland Spring, Arrowhead and a handful of other brands, reportedly generate core annual earnings of $600 million. Apollo Global Management could be a suitor, Reuters reported. | | | | | |
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"[A total of] 223 deals $100 million and above have closed through the first nine months of 2020, putting the year on pace to set a new record for VC mega-deal count, and to potentially match one VC mega-deal for every business day in the year. This move toward larger deals has been in motion for the past five years, but the advent of the pandemic has accelerated this trend as uncertainty and a desire to support stronger portfolio companies likely drove a flight to quality for investors."
Source: Q3 2020 PitchBook-NVCA Venture Monitor | | | | | |
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