| | | | | Cleantech startups poised to benefit from climate incentives under Biden | |  | | (acilo/Getty Images) | | | Cleantech investors are hopeful that President-elect Joe Biden can use the power of the markets to drive down carbon emissions.
The road ahead won't be easy—especially if Congress remains divided—but there are bipartisan avenues. Venture capitalists think carbon trading markets and similar programs could foster a wellspring of entrepreneurial activity: | | | | | | | | | | VC valuations are breaking records in Europe's extraordinary year | | For both early-stage and late-stage venture investments in Europe, average pre-money valuations have reached all-time highs in 2020. The coronavirus crisis is still raging across the region. Yet both established VC firms and nontraditional investors remain optimistic—particularly toward startups in sectors that have thrived during the pandemic, such as software and healthcare.
PitchBook's Q3 2020 European VC Valuations Report dives deep into the reasons for this resilience, with the latest detailed data breaking down valuations across various stages, industries, geographies and more. Key takeaways include: - Nontraditional investors continue pouring money into VC in pursuit of pandemic-proof tech innovations
- The aggregate post-money valuation of unicorns in Europe has surpassed €100 billion for the first time
- Exit value is beginning to bounce back in the second half of the year after a bumpy first six months:
| | | | | | | | | | | | Considerations in the valuation of pre-IPO equity interests | | IPO valuations have been a hot topic in the last few months, specifically certain cases in which they have backfired. That's why it's more important than ever to follow a specific thought process when valuing pre-IPO equity interests. The process should include the following steps, as indicated by the AICPA's latest Accounting and Valuation Guide: - Determine the possible future outcomes available to the company and a specific set of assumptions under each outcome.
- Estimate the future equity value under each outcome.
- Allocate the estimated future equity value to each share class under each possible outcome.
- Weight each possible outcome by its respective probability to estimate the expected future probability-weighted cash flows to each share class.
- Discount the expected equity value allocated to each share class to present value, using a risk-adjusted discount rate.
- Divide the present value allocated to each share class by the respective number of shares outstanding to calculate the value per share of each class.
- Consider additional adjustments for marketability/controlling characteristics or other unique business/ownership circumstances.
To learn more about the key valuation considerations a company should consider as they head down the pre-IPO journey, download Stout's A Roadmap for the Valuation of Pre-IPO Equity Interests. | | | | | | | | | | DoorDash looks to double valuation to $32B in IPO | |  | | (Tibrina Hobson/Getty Images) | | | DoorDash expects to raise about $2.5 billion in its upcoming IPO after selling a planned 33 million shares at between $75 and $85 apiece. At the midpoint of that range, the listing would value the food delivery company at around $32 billion on a fully diluted basis—double the $16 billion valuation it received in June, according to PitchBook data.
San Francisco-based DoorDash reported that revenue more than tripled year-over-year in the first nine months of 2020 to $1.9 billion, with losses narrowing to $149 million. SoftBank's Vision Fund owns a 24.9% pre-IPO stake and Sequoia owns 20.4%, according to the company's IPO paperwork.
Tech companies Airbnb, Roblox, Affirm and Wish are also expected to price their offerings in the coming weeks. DoorDash is set to list on the NYSE under the ticker DASH. | | | | | | | | | | Brian Sheth leaves Vista Equity after Robert Smith's tax troubles | | Vista Equity Partners co-founder and president Brian Sheth resigned from the Austin-based private equity firm late last week, effective immediately.
The departure came a little more than a month after fellow Vista co-founder Robert Smith admitted liability and reached a roughly $139 million settlement with the US Department of Justice over an investigation into alleged personal tax fraud. Previous reports had indicated Smith's tax troubles were a factor in Sheth's pending departure, but Sheth said that was not the case in an interview with Forbes. Sheth didn't indicate a different reason for his decision to leave the firm.
"My decision to leave Vista was unrelated to Robert's personal matter, other than wanting to wait to finalize it until after that matter was resolved," Sheth said. "Any statement attributable to me that suggests otherwise is inaccurate."
Smith and Sheth co-founded Vista in 2000 and spent the past two decades establishing the firm as a highly profitable pioneer of software buyouts, building up more than $73 billion in assets under management and turning both founders into billionaires and prominent philanthropists. As part of his departure agreement, Sheth will cash out his minority stake in the firm but retain his share of performance fees in the years to come, according to Forbes. Sheth reportedly plans to eventually return to investing, with a focus on environmentalism and conservation. | | | | | | | | | | On the podcast: Grocery fulfillment and dark stores—clear aisles, full carts, can't lose? | | In the latest episode of "In Visible Capital," we chat with Publicis Groupe chief commerce strategy officer Jason Goldberg about how more grocery shoppers than ever are leveraging so-called dark store and digital fulfillment technologies to meet their needs. Joined by PitchBook senior analyst Alex Frederick, who focuses on food and agricultural tech, we cover topics including: - The current grocery shopping landscape in the US
- How the COVID-19 pandemic has accelerated ecommerce innovation within the grocery industry
- The infrastructure side of digital grocery fulfillment
Subscribe to "In Visible Capital" wherever you listen to podcasts and look for new episodes every Tuesday: | | | | | | | | | | Just 3% of employees at Coinbase are Black. More than a dozen former employees say that's only the beginning of the highly valued startup's problems with discrimination. [The New York Times]
Some of the business leaders who knew him best remember Tony Hsieh, a groundbreaking tech entrepreneur who died last week at the age of 46. [Forbes]
Conservatives in traditionally red states such as Oklahoma have long advocated for a truer free market. Now, as cannabis sales surge across the state, their wish is becoming reality. [Politico] | | | | | | | | | | | Since yesterday, the PitchBook Platform added: | | 243 Deals | 1102 People | 287 Companies | 13 Funds | | | | | | | | | | | | | | | | | | | | 2014 Vintage Global PE Funds with less than $250M | | | | | | | | | | | PitchBook Webinar: A closer look at DACH private market activity in 2020 | | Join us Dec. 2 for a webinar on 2020 private market activity in the DACH region. During the discussion, PitchBook analysts will explore: - The main drivers behind an uptick in PE deal activity
- How exits and fundraising have performed during the pandemic
- What has driven VC investment to new heights across the region
Register to secure your spot | | | | | | | | | | | | Kinaset Therapeutics launches with $40M | | | Kinaset Therapeutics, a developer of treatments for respiratory disorders, has raised $40 million from 5AM Ventures, Atlas Venture and Gimv. The biopharma company plans to begin Phase I and I-B clinical trials of a drug designed to treat severe asthma in the first half of next year. | | | | | | | | Kleiner Perkins leads new funding for Materialize | | | Materialize has raised a $32 million Series B led by Kleiner Perkins, with participation from Lightspeed. The New York-based company is the developer of a SQL streaming database that helps users visualize analytics in real time, model financial services risks and build applications. Materialize was valued at more than $38 million with an $8.5 million Series A in February 2019, according to PitchBook data. | | | | | | | | Spotlight Therapeutics banks $30M | | | Spotlight Therapeutics, which is developing gene editing therapies intended to directly target cells, has raised $30 million in a Series A led by GV. Founded in 2018, the Hayward, Calif.-based company was valued at $24.9 million in September 2019, according to PitchBook data. | | | | | | | | All Raise locks down $11M from VCs | | | San Francisco-based All Raise has collected $11 million of a $15 million goal from investors including Pivotal Ventures, Sequoia and GGV Capital. Founded in 2017, the nonprofit organization offers support to female entrepreneurs and other underrepresented founders. All Raise, which is also backed by The Reid Hoffman Foundation and Silicon Valley Bank, plans to use the funding to expand operations across the US. | | | | | | | | | | | | Carlyle among PE shops vying for Advanz Pharma | | | The Carlyle Group has made an offer to acquire Advanz Pharma in a deal that creditors hope will value the drugmaker at around $2 billion, according to Reuters. Nordic Capital and TDR Capital have also reportedly made offers for the London-based company, which slashed its debt by $2.4 billion last year through a restructuring in which GSO Capital Partners and other creditors assumed control of the business. | | | | | | | | Francisco Partners inks $1.45B deal with CDK Global | | | Francisco Partners has agreed to acquire the international business of CDK Global, a provider of IT management services for the automotive industry, for approximately $1.45 billion. Francisco partner Petri Oksanen will join the division's board of directors. CDK's international business primarily serves customers in Asia and other emerging markets. | | | | | | | | Vista links with VCs on $1.1B purchase | | | | | | | | | Grease Monkey owner to change hands in SBO | | | MidOcean Partners has agreed to purchase FullSpeed Automotive from CenterOak Partners, which has backed the Colorado-based business since 2017. Operating under the Grease Monkey and SpeeDee brands, FullSpeed provides oil changes, tire rotations, brake services and other aftermarket automotive offerings, with around 600 combined company-owned and franchised locations. | | | | | | | | PE-backed soil stabilization specialist refinances | | | Tensar, a provider of soil stabilization, pavement construction and other services for engineers and contractors, has refinanced with $295 million in newly syndicated loans. Private equity firm Castle Harlan has owned the Atlanta-based company since 2014. | | | | | | | | Blackstone strikes deal for credit investor | | | Blackstone has agreed to acquire DCI, a San Francisco-based firm with $7.5 billion in assets under management that specializes in quantitative credit investing. As part of the deal, DCI will join Blackstone Credit, a unit of Blackstone with roughly $135 billion in AUM that specializes in a range of lending strategies in the corporate and private credit business segments. | | | | | | | | | | | | Facebook agrees to $1B deal for CRM specialist | | | Facebook has agreed to acquire Kustomer, a provider of customer relationship management software, with reports indicating the deal values the New York-based startup at or just over $1 billion. Kustomer has raised over $170 million in prior venture backing from firms including Battery Ventures, Boldstart Ventures and Redpoint Ventures, reaching a $710 million valuation last year, according to PitchBook data. | | | | | | | | C3.ai set to raise $503M+ in debut | | | Enterprise AI software unicorn C3.ai has set an initial range for its upcoming IPO on the NYSE, revealing plans to sell at least 15.5 million shares for between $31 and $34 apiece. A midpoint pricing would raise over $503 million for the California-based company, which was valued at $3.3 billion last year, according to PitchBook data. C3.ai's tech is used in sectors including manufacturing, aerospace and defense, and financial services. Its existing backers include TPG Growth (22.1% pre-IPO stake) and Baker Hughes (14.8%). | | | | | | | | ServiceNow to buy VC-backed Element AI | | | ServiceNow, the publicly traded provider of a digital IT workflow platform, has agreed to acquire Element AI in a deal that is expected to close early next year. Based in Montreal, Element AI offers document intelligence, automated information gathering workflows and other services to users in sectors such as insurance and logistics. The company has raised prior funding from investors including Real Ventures, McKinsey & Company and DCVC. | | | | | | | | | | | | Dyal, Wafra seek minority stake in NEA | | | A consortium led by Dyal Capital Partners and Wafra is in discussions to purchase around 15% of VC firm NEA, according to Bloomberg. Dyal, a unit of Neuberger Berman, and Wafra, which is backed by the government of Kuwait, frequently take minority positions in private equity firms. NEA closed its largest-ever fund on $3.6 billion earlier this year. | | | | | | | | | | | | GlobalWafers, Siltronic weigh latest semiconductor deal | | | GlobalWafers, a Taiwanese manufacturer of semiconductor wafers, is reportedly in talks to acquire German peer Siltronic for some €3.75 billion (about $4.5 billion), with the expected offer price of €125 per share representing a 10% premium to Siltronic's closing share price last Friday. The combined company could have a market share of more than 30%, according to reports. | | | | | | | | GM walks back plans for Nikola partnership | | | General Motors has called off plans to acquire an 11% stake in Nikola and to co-develop the electric vehicle maker's pickup truck, causing Nikola stock to fall nearly 27% on Monday. The two automakers announced the partnership in September, just days before activist investor Hindenburg Research publicly accused Nikola and now-former CEO Trevor Milton of defrauding investors. GM will continue to supply its fuel cell technology for Nikola's semi-trucks, with prototypes expected at the end of next year. | | | | | | | | Perella Weinberg on brink of SPAC deal | | | Perella Weinberg Partners is in the late stages of negotiating a reverse merger with a special-purpose acquisition company led by Bancorp founder Betsy Cohen, the Financial Times reported. The deal with FinTech Acquisition Corp. IV would reportedly take the boutique investment bank's advisory business onto the public market at a valuation of about $760 million. | | | | | | | | AXA lines up $269M Gulf insurance deal | | | | | | | | | | "Despite large deals (more than $1 billion) taking up most of the limelight, dealmaking in the quarter was largely driven by smaller transactions. Thus far in 2020, deals under $100 million accounted for 68.7% of all M&A—the highest level since 2016. Furthermore, deals in the $1.0 billion to $5.0 billion range made up only 1.2% of all deal count, which is the lowest percentage for this bucket since 2013."
Source: PitchBook's Q3 2020 North American M&A Report | | | | | | | | | | | | | | | Who's in the newsletter today? | | People | | | | Investors | | | | Companies | | | | Service Providers | | | | | | | | | | | | | |
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