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| US VC down rounds pull back to pre-pandemic levels | | The proportion of down rounds across US venture deals rose to 13.6% in the second quarter, as the sudden and sweeping effects of the pandemic squeezed the economy. That was the highest percentage of deals done at lowered valuations since late 2017. Many felt that the pressure on founders to acquiesce on deal terms might be sustained—if not increase—throughout 2020.
The data shows that hasn't been the case. Our Q3 US VC Valuations Report examines the return of founder-friendly terms and the measures that startups have taken to extend their capital runways. Other highlights from the report include: - Nontraditional investors continue to drive huge late-stage valuations
- Median IPO valuations have flourished, while acquisition valuations were mixed
- A spotlight on trends within enterprise tech, consumer tech, biotech and more:
| | | | | | | | | | HelloFresh inks $277M deal for meal delivery startup | |  | | (Image courtesy of HelloFresh) | | | Berlin's HelloFresh has agreed to buy Illinois-based meal delivery business Factor75 for up to $277 million, as European food companies turn their attention to the US to fuel growth.
The deal comes just a few weeks after Nestlé completed its $1.5 billion acquisition of New York-based meal delivery startup Freshly. In June, Just Eat Takeaway.com fought off a rival bid from Uber to buy Grubhub in an all-stock transaction worth about $7.3 billion.
HelloFresh's US portfolio includes EveryPlate and Green Chef, which it bought in 2018. The new deal will give HelloFresh its first office in Chicago, as well as four production and fulfillment facilities.
HelloFresh is the largest meal-kit provider in the US in terms of market share, reportedly surpassing Blue Apron in 2018. It logged 2.5 million active customers in the US during Q3 2020, a near 70% increase year-over-year. The pandemic has created a surge in demand for meal kits as shoppers seek alternatives to grocery stores. The meal-kit market is expected to reach $14.8 billion by 2025, representing a 10.6% compound annual growth rate, according to PitchBook's Q3 2020 foodtech report.
Founded in 2013, Factor75 specializes in healthy ready-to-eat meals. It secured $12.5 million in May in a round led by Marcy Venture Partners. Factor75 is expected to generate revenue of around $100 million in 2020. | | | | | | | |
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| A message from Twin Brook Capital Partners | | |
| Lending through the pandemic: The value of deep relationships | | | Twin Brook Capital Partners' Rich Christensen discusses working hand-in-hand with private equity sponsors and their portfolio companies through the COVID-19 pandemic as well as middle-market deal and lending activity in the most recent episode of Middle Market Growth's "Conversations" podcast. | | | | | | | |
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| Merck to buy coronavirus drug developer for $425M | |  | | (howtogoto/Getty Images) | | | Pharmaceutical giant Merck has agreed to pay $425 million in cash upfront to acquire OncoImmune, the developer of a COVID-19 therapeutic that has shown promising results in a Phase III study. The deal adds to Merck's coronavirus treatment efforts, which include an antiviral therapeutic and a pair of vaccines that are still under evaluation.
OncoImmune was valued at $281 million following a $56 million round in September, according to PitchBook data. Its backers include 3E Bioventures Capital, Kaitai Capital and GBA Capital.
As part of the latest deal, the Maryland-based company's shareholders will be eligible for certain milestone- and sales-based payments. OncoImmune will also spin off assets and rights unrelated to the coronavirus into a new entity that will be owned by its current shareholders. Merck will invest $50 million in the entity and become a minority stakeholder.
OncoImmune's lead drug candidate is being studied for use in coronavirus patients with severe symptoms. Interim data showed that the drug reduced risk of death or respiratory failure by more than 50%. Prior to the pandemic, the treatment was being developed for graft-versus-host disease. | | | | | | | | | | On the podcast: The rapid rise of telehealth during COVID-19 | | In the latest episode of "In Visible Capital"—our final installment in a series focusing on health and wellness tech—we examine recent telehealth advancements brought on by COVID-19. Joined by Dr. Janine Knudsen, a primary care provider at Bellevue Hospital in New York City, and Activant Capital founder Steve Sarracino, we cover topics including: - How the drastic uptick in telehealth has changed the job of healthcare providers
- Potential cost-savings for patients who use telehealth models
- Telehealth accessibility issues and the resulting impact on vulnerable populations
- What the future might hold for this space
Subscribe to "In Visible Capital" wherever you listen to podcasts and look for new episodes every Tuesday: | | | | | | | | | | It's no secret that tech workers are relocating away from Silicon Valley and other tech hubs. But many of those workers are changing their jobs in addition to their locations. [The Wall Street Journal]
Editors of The New York Times Book Review reveal their favorite fiction and nonfiction picks from 2020. [The New York Times]
Startups increasingly want investors who don't interfere or ask questions. In their desire to be "founder-friendly," are those investors deforming capitalism? [The New Yorker] | | | | | |
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| | Since yesterday, the PitchBook Platform added: | | 342 Deals | 1181 People | 358 Companies | 20 Funds | | | | | | |
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| 2011 Vintage Global Debt Funds | | | | | | |
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| PitchBook Capital Perspectives | | Join us on Dec. 10 at 8 a.m. PST/11 a.m. EST for the PitchBook Capital Perspectives conference, where we'll be covering the state of the private markets in the context of COVID-19, the 2020 election and how to adapt to a digital workflow.
The PitchBook Capital Perspectives conference combines the latest market data, institutional research and expert analysis from industry professionals for a virtual event unlike any other.
For the conference, you'll automatically get limited access to PitchBook, and be able to explore detailed data on companies, investors, transactions and more on your own.
Already a client? You'll get early access to a new, highly anticipated feature called Workspaces.
Register now | | | | | | | |
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| WCAS adds Mike Butler to lead healthcare push | | | New York's Welsh, Carson, Anderson & Stowe has hired Mike Butler as an operating partner in the firm's healthcare group. With more than 30 years of experience in the healthcare space, Butler was most recently president of healthcare organization Providence; prior to that he was the company's CFO and COO. | | | | | |
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| Byju's eyes $12B valuation | | | Indian edtech company Byju's is raising $200 million from investors including BlackRock and T. Rowe Price at a $12 billion valuation, according to Bloomberg. Backed by investors including Silver Lake and Tiger Global, Byju's was valued at $11.1 billion in September, according to a PitchBook estimate. The Bengaluru-based company operates an online learning platform. | | | | | | | | Biopharma startup reveals $800M+ in financing | | | Resilience, a provider of biopharma manufacturing tech, has launched with more than $800 million in total funding. The financing includes a $750 million Series B led by Arch Venture Partners and 8VC, with participation from GV, NEA and others. Based near San Diego and founded earlier this year, Resilience is focused on improving manufacturing supply chains and increasing access to complex medicines. | | | | | | | | Catamaran Bio launches with $42M | | | | | | | | | Australian marketing startup lands new funding | | | | | | |
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| Advent to take over Colombian bank tech company | | | Advent International has agreed to acquire Sophos Solutions, a provider of tech consulting services for Colombia's banking industry, from the Colombia Securities Exchange (Grupo BVC) for $129,598 million pesos (about $35.5 million). The company was founded in 2006 and has been majority owned by Grupo BVC since 2015. Advent also acquired stakes from Sophos' other shareholders as part of the deal. | | | | | | | | Turnspire purchases Goodyear Air Springs | | | Turnspire Capital Partners has acquired Goodyear Air Springs, a Fairlawn, Ohio-based provider of air springs for trucks, trailers, buses and other vehicles, from EnPro Industries. The deal marks the first acquisition for Infinity Engineered Products, a platform recently launched by Turnspire. Former Goodyear Air Springs general manager David Brinkman has been named CEO of Infinity Engineered Products. | | | | | | | | Taco maker loads up with $400M | | | | | | |
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| SPAC GigCapital2 to merge with digital healthcare companies | | | Blank-check company GigCapital2 has agreed to merge with digital healthcare provider UpHealth and Cloudbreak Health, a telemedicine platform provider. The deal values the combined company at $1.35 billion and includes around $300 million in new funding from the GigGapital2 trust and a PIPE investment. The combined company, which will take UpHealth's name, aims to provide health systems and providers with a care management platform, along with telehealth, digital pharmacy and behavioral health services. | | | | | | | | Cloud software-maker AvePoint lines up SPAC deal | | | | | | | | | Homesnap gets picked up by CoStar for $250M | | | CoStar, a commercial real estate information provider, has agreed to buy Homesnap for $250 million in cash. Homesnap operates an online and mobile real estate platform used by more than 300,000 real estate agents across the US. Founded in 2012, the Bethesda, Md.-based company is backed by investors including Revolution and Moderne Ventures. | | | | | |
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| Bain Capital pulls in $800M for second impact fund | | | The impact investing unit of Bain Capital has brought in $800 million for its second fund, according to The Wall Street Journal. Bain Capital typically uses the unit, dubbed Bain Capital Double Impact, to back North American lower-middle-market companies focused on sustainability, health and wellness, and education and workforce development. The firm closed its inaugural impact vehicle on $390 million in 2017. | | | | | | | | | Ibex Investors has closed its second Israel-focused fund on $100 million. Founded in 2003, Ibex has backed companies including electric vehicle developer Revel and cybersecurity company Cynet. The firm is based in Denver, with offices in New York and Tel Aviv. | | | | | |
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"Over the past decade, the funds to close in the DACH region have generally been lower-middle-market funds, or those sized between €100 million and €250 million. We attribute this dynamic in part to the finite number of large-cap buyout targets and a mass of SMEs. However, through Q3 2020, most of the region's funds have been sized between €1.0 billion and €5.0 billion."
Source: PitchBook's 2020 DACH Private Capital Breakdown | | | | | |
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