| | | | | Fund counts decline, secondaries surge as COVID-19 reshapes private fundraising | | The rise of remote work and virtual meetings has created a vastly different fundraising process in 2020 than in years past. That new approach has led to steep declines in the number of new private funds raised. But the amount of capital devoted to those funds has remained surprisingly steady: Private funds combined to raise more than $950 billion in the trailing 12 months through September, representing a relatively modest 7% year-over-year decline.
Sponsored by Allvue, PitchBook's Q3 2020 Private Fund Strategies Report takes readers on a tour of the latest fundraising data and developments across private equity, venture capital, secondaries, debt and other private market strategies, offering a close look at how the pandemic has reshaped the landscape. Key takeaways include: - Despite the sharp drop in fund quantity, the amount of capital raised for VC funds in 2020 looks set to easily surpass 2019's total
- The number of secondaries funds closed in the trailing 12 months is up 31.4% YoY
- Fundraising for first-time funds across all private strategies is on pace for a six-year low
| | | | | | | | | | Affirm files IPO, boasting breakneck revenue growth | | Installment loan provider Affirm has published documents for its initial public offering, joining delivery company DoorDash and home rental giant Airbnb in a string of year-end IPOs.
Affirm's annual revenue nearly doubled year-over-year to some $510 million for the fiscal year ended June 30, with fitness company Peloton accounting for 28% of that revenue. Combined, Affirm's top 10 merchant partners represented around 35% of the sales in the period.
The fintech company lost $112.6 million in the period, down from $120.5 million in the previous fiscal year. The volume of transactions on Affirm's platform grew 77% YoY, bringing in $4.6 billion for the 2020 fiscal year.
Khosla Ventures, Lightspeed, GIC and Founders Fund each own 5% or more of Affirm, which was valued at $2.9 billion in April 2019, according to PitchBook data.
Affirm was started by PayPal co-founder Max Levchin in 2012 and offers a "buy now, pay later" service for online shoppers. The company has not yet disclosed the number of shares to be sold or a price range for the offering.
Related read: Airbnb shows pandemic resilience in IPO filing, but expects continued virus impact | | | | | | | | | | A message from RBC Capital Markets | | | | A race for scale in media and telecom: How the potential of 5G is driving M&A | | Around 37% of US M&A value is now concentrated within the communications, media and technology sectors. Consolidation in media and telecom is so swift that a large-scale player of a decade ago would be a niche player today.
Large deals like AT&T's acquisition of Time Warner and Disney acquiring 21st Century Fox represent a trend of consolidation between content creation and distribution.
T-Mobile's $23 billion acquisition of Sprint created three sizable players atop the US telecoms industry, each vying for position while the emerging platform of 5G enables new business models.
Most people believe 5G represents a paradigm shift—there may not be the luxury of waiting to do deals. Join our industry experts as they discuss what's next for media, telecom and M&A. | | | | | | | | | | FDA greenlights Lucira Health's at-home COVID-19 test | |  | | (Images By Tang Ming Tung/Getty Images) | | | The US Food and Drug Administration has approved the first at-home COVID-19 test.
Lucira Health, which is based in Emeryville, Calif. and was founded in 2013, is the startup behind the molecular diagnostic test. The company has raised funding from investors including Y Combinator, Data Collective and Eclipse Ventures. Lucira's most recent round came in January, when it raised $32.5 million.
The coronavirus test, which is only available by prescription, requires users to swab each nostril five times, swirl their sample in a vial and then place it in a test unit for analysis. The results are available in about 30 minutes, but a positive test result can be generated within 11 minutes.
Lucira initially developed its at-home test kit as a way to detect the flu, but shifted its focus to COVID-19 when the pandemic began. The company expects the kit to be available soon to Sutter Health patients in Northern California and Cleveland Clinic Florida patients in the Miami metro area. It anticipates the test will be available nationwide by early spring. | | | | | | | | | | Insurer RSA agrees to $9.6B takeover | | RSA, the 300-year-old company behind the More Than consumer insurance brand, has agreed to a £7.2 billion (about $9.6 billion) takeover from insurers Intact Financial and Tryg. The two buyers will pay 685 pence per share, representing a 51% premium on the company's 460 pence closing price on Nov. 4, before the impending offer was announced.
The deal will break up one of the UK's oldest listed companies. Nordic insurer Tryg, which is paying £4.2 billion of the total price, will take over RSA's Swedish and Norwegian operations. Canada's Intact will take over the international operations, including those in Canada, the UK and Ireland. The pair will co-own RSA's Danish business.
Related read: UK insurer RSA in takeover talks with foreign suitors | | | | | | | | | | COVID-19 vaccines currently in development by Pfizer and Moderna Therapeutics will probably work. Making them fast will be the hard part. [The New York Times]
SpaceX has successfully launched astronauts into space and brought them back to Earth. Now, the real challenge begins. [The Atlantic]
The pandemic has shined a bright light on a question of bioeconomics that has cropped up time and again throughout history: How does society value a human life? [n+1] | | | | | | | | | | | Since yesterday, the PitchBook Platform added: | | 417 Deals | 1524 People | 365 Companies | 10 Funds | | | | | | | | | | | | | | | | | | | | 2012 Vintage Global PE Funds between $500M-$1B | | | | | | | | | | | Kickstart collaboration across your team with Workspaces | | Within a complex, evolving and mostly virtual business landscape, it's more important than ever for teams to collaborate effectively.
Leverage PitchBook's new Workspaces feature to get your team organized, increase communication and create dynamic hubs for project-relevant files and reports. Plus, glean insights directly from PitchBook analysts, and do it all from within our platform—a robust database that tracks all aspects of the global investment ecosystem.
Learn more about Workspaces | | | | | | | | | | | | WindRose adds operating partner | | | Veteran healthcare executive Cherrill Farnsworth has joined WindRose Health Investors as an operating partner focused on evaluating potential healthcare investments and working with the New York-based firm's existing portfolio companies. Farnsworth was previously the CEO of HealthHelp, a specialty benefits management company that was backed by WindRose. | | | | | | | | | | | | Duolingo worth $2.4B after picking up fresh funds | | | Duolingo, the operator of a language-learning platform, has raised a $35 million Series H from Durable Capital Partners and General Atlantic at a $2.4 billion valuation. Duolingo may consider an IPO next year, according to The Wall Street Journal. The Pittsburgh-based company has now raised about $183 million in total private funding, with other backers including Alphabet's CapitalG, Kleiner Perkins and NEA. | | | | | | | | Heyday launches with $175M Series A | | | Ecommerce startup Heyday has raised $175 million in Series A funding from General Catalyst, Khosla Ventures and Arbor Ventures, with executives from Amazon, eBay, PayPal and Magento also participating. The company partners with, incubates and acquires brands that sell goods on marketplaces like Amazon. Heyday officially launched in August and expects more than $20 million in annualized revenue by the end of 2020. | | | | | | | | Addepar snags $117M Series E | | | Addepar has raised $117 million in a round led by WestCap Group. 8VC and Sway Ventures also participated in the funding. Founded in 2009, Addepar is the developer of a wealth management platform that offers data aggregation, reporting and analytics for investment portfolios. The company was valued at $560 million with a $140 million round in 2017, according to PitchBook data. | | | | | | | | Spring Health lands $76M for mental health benefits | | | Spring Health, the provider of a mental health benefits platform for employers, has brought in a $76 million Series B led by Tiger Global. New investors GingerBread Capital and Operator Partners also joined the round, along with several existing backers. In January, the New York-based startup was valued at $81.7 million after picking up a $22 million Series A, according to PitchBook data. | | | | | | | | Elevation Oncology secures $65M Series B | | | | | | | | | Udemy's valuation tops $3.2B | | | Edtech startup Udemy has raised a $50 million Series F at a $3.25 billion pre-money valuation, capitalizing on a 425% surge in course enrollment on the startup's platform during the pandemic. Tencent led the round, according to Bloomberg, and Learn Capital participated as well. The San Francisco-based startup has also reportedly received merger interest from SPACs. | | | | | | | | Menlo Ventures, Greylock fund Abnormal Security with $50M | | | Menlo Ventures has led a $50 million Series B for Abnormal Security, a developer of AI-based email security and threat detection tools. The San Francisco-based company raised a $24 million Series A in November 2019, valuing it at $140 million. | | | | | | | | Headway brings home $26M for therapy | | | Headway has raised a $26 million Series A co-led by GV and Thrive Capital, with participation from Accel, Global Founders Capital and IA Ventures. The New York-based company provides a mental healthcare platform designed to connect patients with therapists; it also offers insurance coverage via partnerships with providers such as Aetna and Cigna. Headway was valued at $19.5 million in July 2019, according to PitchBook data. | | | | | | | | Cogito collects $25M to analyze emotional intelligence | | | Cogito has secured $25 million in a round led by Goldman Sachs Growth Equity, with participation from investors including Salesforce Ventures. The Boston-based company is a developer of AI-based technology intended to provide emotional intelligence reports of employees in real time. In September 2019, Cogito raised $20 million at a $270 million valuation, according to PitchBook data. | | | | | | | | Datafold raises seed round | | | Datafold, a San Francisco-based data performance-monitoring specialist, has raised $2.1 million in a seed round led by NEA. | | | | | | | | | | | | | | Sun Capital devotes $500M+ to Miami Beach Medical takeover | | | Sun Capital Partners has agreed to acquire Miami Beach Medical Group, a provider of primary care, specialty care and ancillary services to patients in South Florida, from Gauge Capital, with the South Florida Business Journal reporting a purchase price of more than $500 million. Gauge Capital has backed MBMG since 2017, according to PE Hub. | | | | | | | | KKR strikes $100M deal for New Zealand animal health company | | | KKR has agreed to acquire Argenta, a New Zealand-based contract research and manufacturing organization that specializes in animal health, from the Tomlinson Group. The firm paid $100 million for its majority stake, according to Reuters. Funds for KKR's investment came via the firm's Health Care Strategic Growth Fund, which closed on $1.45 billion in 2017. Tomlinson will retain a minority stake in Argenta. | | | | | | | | Clearlake to fetch WellPet | | | | | | | | | Sverica seals security deal | | | Sverica Capital Management has made a strategic investment in Defy Security, a cybersecurity provider based near Pittsburgh. Defy provides front-end consultation, assessment and other services to clients in sectors including financial services, healthcare, manufacturing and retail. | | | | | | | | | | | | Bain Capital mulls options for Diversey | | | Bain Capital has held discussions with advisers about selling Diversey or taking it public during the first half of 2021 in a deal that could value the provider of hygiene and cleaning products at around $6 billion, including debt, according to Bloomberg. Bain acquired the South Carolina-based company in 2017 and merged it with Zenith Hygiene the following year when it acquired the UK-based rival for $130 million. | | | | | | | | | | BlackRock-backed Arrival agrees to $5.4B SPAC merger | | | London-based electric carmaker Arrival has confirmed plans to go public on the Nasdaq through a merger with blank-check company CIIG Merger Corp. The deal gives the combined business an enterprise valuation of $5.4 billion and will generate $660 million in gross cash proceeds, $400 million of which will come via a PIPE investment from Fidelity Management & Research, Wellington Management, BNP Paribas and BlackRock. Arrival has received prior backing from BlackRock, UPS, Hyundai and Kia. It has signed order contracts worth up to $1.2 billion, and expects to begin production late next year. | | | | | | | | Talkspace explores $1B sale | | | Talkspace is looking at options to sell itself in a deal that could value the mental health startup at around $1 billion, according to Bloomberg. The New York-based company was valued at about $310 million after a Series D in May 2019, according to PitchBook data; its backers include Revolution, Qumra Capital and Norwest Venture Partners. Telemedicine services such as Talkspace's virtual therapy sessions have experienced rapid growth during the pandemic. | | | | | | | | Eurazeo to unload Iberchem in $973M deal | | | Croda International has agreed to pay €820 million (about $973 million) to acquire Iberchem, a Spanish manufacturer of flavors and fragrances that's been majority owned by Eurazeo since 2017. Based in the UK, Croda is a specialty chemicals manufacturer that produces ingredients for a number of end markets. | | | | | | | | Ozon sets range for potential $750M debut | | | Russian ecommerce company Ozon has revealed plans to offer 30 million American depositary shares for between $22.50 and $27.50 apiece in its upcoming IPO on the Nasdaq, with a midpoint pricing set to raise $750 million. Existing backers, including Sistema (45.2% pre-IPO stake) and Baring Vostok Capital Partners (45.1%), are set to purchase $135 million worth of shares at the eventual IPO price in concurrent private placements. | | | | | | | | 4D Molecular Therapeutics refiles for IPO | | | Gene therapy company 4D Molecular Therapeutics has once again filed for an IPO, aiming to raise up to $75 million in a listing on the Nasdaq. The Emeryville, Calif.-based company previously filed to go public last year, but later withdrew its application. 4D's lead candidates include treatments for multiple vision-loss disorders. Viking Global (16.9% pre-IPO stake) and Pfizer (9.7%) are among the backers of 4D, which was valued at $325 million this June, according to PitchBook data. | | | | | | | | | | | | Searchlight Capital Partners has closed its third flagship fund on $3.4 billion, topping a predecessor that closed on around $1.9 billion in 2015. The New York-based private equity firm will use the new capital to target investments across North America and Europe. | | | | | | | | Qiming nails down $1.2B for Fund VII | | | Qiming Venture Partners has closed its latest namesake fund with $1.2 billion in commitments. The vehicle will be used for early-stage healthcare, technology, media and telecom investments. The Shanghai-based firm manages more than $5.6 billion in assets across 15 funds. | | | | | | | | Round Hill Music raises $291M royalty fund | | | Round Hill Music Royalty Partners has closed its third fund with $291 million in commitments, with plans to use the capital to acquire royalty-producing intellectual property rights from songwriters, artists and other rights holders. The New York-based private equity firm has already deployed about $200 million from the fund to buy the rights to songs from artists including Bruno Mars, Matchbox Twenty and Kiss. | | | | | | | | Teleo Capital wraps up inaugural fund | | | Teleo Capital has closed its debut fund on $250 million, with plans to focus on special situations and corporate divestitures in the tech, software, healthcare IT, business services and industrial sectors. Led by three former Marlin Equity Partners investors, Teleo is a lower-middle-market firm founded in 2018 with offices in Boise, Idaho and El Segundo, Calif. | | | | | | | | Nashville PE firm brings in $200M | | | Council Capital has closed its fourth fund at a hard cap of $200 million in outside commitments. Based in Nashville, Council primarily targets lower-middle-market investments in the healthcare services and healthcare IT sectors. The firm closed its previous fund with more than $150 million in commitments in 2016. | | | | | | | | Chinese firm lands $187M for fourth fund | | | Future Capital Discovery has closed its fourth fund with $187 million for investments in early-stage enterprise technology and consumer tech companies in China. The Beijing-based firm has over $600 million in assets under management and has invested in companies like electric vehicle-maker Li Auto, which went public in the US earlier this year. | | | | | | | | | | | | | | | | | | | | Who's in the newsletter today? | | People | | | | Investors | | | | Companies | | | | | | | | | |
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