Monday, November 2, 2020

Election draws record donations from VCs

The future of immigrant entrepreneurship; VC trends for Europe's female founders; KKR logs a billion-dollar quarter; Under Armour strikes deal with PE
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The Daily Pitch: VC, PE and M&A
November 2, 2020
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Today's Top Stories
Venture capital favors a Joe Biden victory with record 2020 election donations
During the 2020 election cycle, some 79% of VC contributions went to Democratic organizations and candidates like Joe Biden, the Center for Responsive Politics found. (Drew Angerer/Getty Images)
Largely clustered in areas like New York City and Silicon Valley, the venture capital industry was already leaning liberal. And as evidenced by the 2020 election cycle, it's moving further left: More than three-quarters of VC's record $69.7 million in political donations this cycle went to Democratic candidates and causes, according to the Center for Responsive Politics.

What's behind the shift? Industry insiders point to growing frustration with President Trump's immigration actions and hope for Joe Biden's investment plans:
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The future of immigrant entrepreneurship hangs on the next US president
(Image via Kelilah King/PitchBook and Getty Images)
Foreign-born founders and startup employees have long played a crucial role in the US venture ecosystem. Changes to immigration policy under the Trump administration have cast doubt on whether this pipeline can continue.

All eyes are on tomorrow's presidential election, as the outcome will likely shape the future of immigrant founders in the US:
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Mobility's road forward in a post-Uber era
(Chris J Ratcliffe/Getty Images)
Historically, the largest costs for mobility services have been labor and fuel. With increased scrutiny over gig economy work and the rise of more cost-effective electric vehicle technology, a business model shift toward connecting customers directly to vehicles may be in the cards.

We explore this trend in our latest analyst note. Among the takeaways:
  • Increasing labor costs in the ridesharing market illustrate the evolving role of local governments as gatekeepers in the future of mobility

  • Micromobility and fleet-owned car-sharing providers are likely to see economic benefits from improved battery technology

  • Large tech companies will lead investing in autonomous vehicles, presenting an existential threat to incumbent ridesharing companies
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KKR pulls in more than $1B in monster Q3
What a difference six months makes.

Two quarters after posting a net loss of $1.3 billion, KKR announced net income of nearly $1.1 billion in the third quarter, or $1.79 per share. The earnings were driven by a private equity portfolio that surged 16% during Q3, outpacing an 8.5% bump in the S&P 500, as the firm continued to recover from a Q1 marred by early impacts of the pandemic.

KKR's latest results also blew past its numbers from Q3 2019, when the firm posted a profit of some $250 million, or 43 cents per share. The firm's distributable earnings also increased, clocking in at $410 million, or 48 cents per share, a year-over-year uptick of about 5%. KKR's stock closed Friday down about 2%, in line with the broader market.

There were plenty of highlights that helped KKR cash in last quarter. In August, the firm sold Epicor Software to Clayton Dubilier & Rice for around $4.7 billion, including debt. In September, KKR portfolio company Academy Sports + Outdoors raised $203 million an IPO that valued the sports retailer at $1.1 billion.

The firm also remained active on the investment front in Q3. KKR agreed to acquire Global Atlantic Financial Group for around $4.4 billion in July, and it lined up a $3 billion-plus deal in September to purchase 1-800 Contacts from AEA Investors.

Related read: Mega-deals underscore PE's growing embrace of VC deals in tech
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Diving into the data for female founders in Europe
PitchBook has launched our European VC Female Founders Dashboard, which breaks down venture investment trends for female-founded companies across Europe since the start of 2008.

The interactive dashboard allows users to filter deal data by geography, deal stage, industry and more.

Check it out
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Recommended Reads
It's election week. Here's why private equity dealmakers will be watching particularly closely. [Bloomberg]

For most office workers, the daily commute has disappeared. Many are using that extra time to keep their noses to the grindstone just a little bit longer. [The Wall Street Journal]

LVMH and Tiffany have reached a $15.8 billion truce. For anyone familiar with the history of LVMH chairman Bernard Arnault, the drama that preceded last week's deal came as little surprise. [The New York Times]
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Quick Takes
  The Daily Benchmark  
  2010 Vintage Global Venture Funds  
  People  
  Ardian builds out buyout team  
  VC Deals  
  Polestar discusses $500M round  
  Conductor collects $150M, eyes US IPO  
  Kandji raises $21M Series A  
  PE Deals  
  Francisco Partners, Under Armour strike $345M fitness pact  
  Vista's Granicus adds on Calytera  
  PE-backed Comlinkdata takes over ShareTracker  
  Portfolio Companies  
  Credit Karma could sell tax prep unit to Square  
  Juul's valuation continues to sink  
  Exits & IPOs  
  Lufax raises nearly $2.4B in NYSE debut  
  Nestlé completes $1.5B meal delivery deal  
  Ipsy buys rival BoxyCharm, merging beauty box services  
 
 
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People
Ardian builds out buyout team
Ardian has hired two new managing directors and promoted three others, with all set to work on the Paris-based firm's buyout team. Scarlett Omar Broca joins the firm from the Goldman Sachs Merchant Banking Division, while Heiko Geisler comes aboard after a prior stint at Montagu Private Equity. Nicolas Darnaud, Emmanuel Miquel and Marco Bellino have all been promoted to MD.
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VC Deals
Polestar discusses $500M round
Electric vehicle maker Polestar is in talks to raise $500 million from investors at a $6 billion valuation, according to Bloomberg. The Swedish startup is owned by Volvo and Chinese auto company Zhejiang Geely Holding Group. Its first fully electric vehicle, which began production earlier this year in China, has run into production issues that resulted in a pair of recalls.
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Conductor collects $150M, eyes US IPO
Brazil's Conductor has taken in $150 million led by Viking Global Investors, with Sunley House Capital also participating, according to reports. The payments operator is also reportedly considering a US IPO as it seeks to grow its business in Latin America, where it has 30 million active users. Conductor has received prior backing from Visa Ventures and Riverwood Capital.
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Kandji raises $21M Series A
Kandji, the creator of an Apple device management platform for businesses, has secured $21 million in a Series A led by Greycroft. Also participating in the deal were Okta Ventures, B Capital and First Round Capital.
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PE Deals
Francisco Partners, Under Armour strike $345M fitness pact
Francisco Partners has agreed to acquire MyFitnessPal from Under Armour in a deal that values the online fitness platform at $345 million. MyFitnessPal, which claims more than 200 million users, will now operate as a standalone company. Under Armour acquired MyFitnessPal for $475 million in 2015.
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Vista's Granicus adds on Calytera
Granicus, a developer of tech aimed at boosting civic engagement, has acquired Calytera from BuildGroup, a VC investor focused on software companies. Calytera is an Austin-based provider of permitting, compliance and licensing software. Vista Equity Partners acquired a majority stake in Granicus from K1 Investment Management in 2016.
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PE-backed Comlinkdata takes over ShareTracker
Comlinkdata, a provider of market analytics for the telecom industry, has acquired ShareTracker, a Boston-based telecom market analytics and research company. Alpine Investors has backed Comlinkdata since 2018.
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Portfolio Companies
Credit Karma could sell tax prep unit to Square
Credit Karma is negotiating a potential sale of its tax preparation business to Square, according to The Wall Street Journal. A deal could reportedly quell antitrust concerns over Credit Karma's pending sale to Intuit, the maker of TurboTax, a $7.1 billion tie-up announced in February. Credit Karma's current backers include CapitalG, Silver Lake and Tiger Global.
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Juul's valuation continues to sink
Juul has reportedly cut its internal valuation to $10 billion, down from $13 billion earlier this year, and major backer Altria has slashed its valuation of the e-cigarette maker to less than $5 billion, according to The Wall Street Journal. The tobacco company bought 35% of Juul two years ago for $12.8 billion, a stake it is now said to value at $1.6 billion. That initial investment from Altria, which makes Marlboro cigarettes, valued Juul at a reported $38 billion.
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Exits & IPOs
Lufax raises nearly $2.4B in NYSE debut
Chinese fintech company Lufax began trading on the NYSE after raising $2.36 billion in its IPO. The Shanghai-based business sold 175 million American depositary shares at $13.50 apiece, the top of its expected range; it closed its first day trading down nearly 5%. Lufax had received prior backing from Primavera Capital, LionRock Capital and Arbor Ventures.
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Nestlé completes $1.5B meal delivery deal
Nestlé has acquired meal delivery startup Freshly in a deal that values the New York-based company at $950 million, with the potential for $550 million in additional payment based on future milestones. Freshly has raised about $140 million in venture funding since its founding in 2015, according to PitchBook data, with early backers including Highland Capital Partners and White Star Capital.
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Ipsy buys rival BoxyCharm, merging beauty box services
Ipsy has bought competitor BoxyCharm, a deal that merges two of the largest global beauty subscription services. The brands will continue to operate as separate entities under a new umbrella organization, BFA Industries. Terms of the deal were not disclosed. Founded in 2013, BoxyCharm was bought by private equity firm KarpReilly in 2016.
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Chart of the Day
Source: PitchBook's Q3 2020 North American M&A Report
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