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| Venture debt growth reaching all areas of VC market | |  | | (siraanamwong/Getty Images) | | | Equity financing is among the most expensive forms of capital. Selling an early stake for a few hundred thousand dollars can cost a company millions when it exits.
Debt, on the other hand, can be cheap. The venture debt market has boomed, with VC-backed companies taking on more than $80 billion in loans and other debt products over the past three years, according to our latest analyst note. Key takeaways include: - Debt is growing faster than the broader VC market, reaching a record value of $28.2 billion in 2019 and nearly matching that in 2020.
- Last year, venture-backed companies used debt products nearly 3,000 times, often in tandem with equity funding.
- The largest proportion of venture debt goes to tech companies, who borrowed nearly $18 billion in 2020.
| | | | | | | | | | LPs bend their own rules in a bid to bet on emerging fund managers | |  | | (David Malan/Getty Images) | | | It has been challenging for limited partners to invest in emerging managers amid the pandemic, but the allure of outsize returns has inspired investors to rethink who they're connecting with. - In 2020, emerging managers accounted for just 11.7% of PE capital raised globally, down from 18% in 2019, according to a recent PitchBook report.
- But the data also showed that as of Q2 2020, 17.7% of first-time funds had an IRR of over 25%.
- LPs may consider co-investing alongside GPs, but the opportunities can be scarce when it comes to highly sought-after managers.
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| IronSource to go public via Thoma Bravo-backed SPAC | | Thoma Bravo’s blank-check company has agreed to take Israel-based mobile advertising software developer IronSource public through a merger valuing the combined entity at $11.1 billion. - The deal will provide IronSource with up to $2.3 billion in cash proceeds, including a $1.3 billion PIPE from investors including Tiger Global, Wellington Management and Fidelity Investments. Thoma Bravo has committed $300 million to the transaction.
- IronSource shareholders will receive $10 billion, including $1.5 billion in cash and a majority stake in the combined company. CVC Capital Partners bought a minority stake in IronSource 2019 for over $400 million. IronSource is expected to have $740 million in cash after the deal is completed.
- Launched in 2010, IronSource has a platform that developers can use to acquire users and display ads within mobile games and apps. It reported $332 million in revenue and EBITDA of $104 million last year.
- Thoma Bravo's SPAC, named Thoma Bravo Advantage, raised $900 million by listing on the NYSE in January.
| | | | | | | | | | As SPACs have continued with their extraordinary dealmaking frenzy, they're pulling out all sorts of tactics to make deals with target companies. [The New York Times]
The real estate market is red hot, and many lenders are backing home flippers. But what happens when and if a housing bust occurs? [Bloomberg]
How the pandemic supercharged the advertising success of Google, Facebook and Amazon. [The Wall Street Journal] | | | | | | | |
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| | Since yesterday, the PitchBook Platform added: | | 41 Deals | 167 People | 60 Companies | 1 Funds | | | | | | |
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| 2007 Vintage Global Venture Funds | | | | | | |
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| Turkey's Getir hits $2.6B valuation with Sequoia backing | | | Grocery delivery startup Getir is raising $300 million at a $2.6 billion valuation in a round co-led by Sequoia and Tiger Global, Business Insider reported. Istanbul-based Getir was valued at $850 million in January, according to a PitchBook estimate. | | | | | | | | Ethnic grocer raises $315M led by DST Global | | | Weee!, the operator of an online marketplace specializing in ingredients for Asian and Hispanic cuisines, has raised a $315 million Series D led by DST Global. New investors that took part in the round include Blackstone, Arena Holdings and Tiger Global. Weee! has secured over $415 million in funding thus far and was valued at $635 million last August, according to PitchBook data. | | | | | | | | OpenSea sails away with $23M | | | OpenSea has raised a $23 million Series A led by Andreessen Horowitz, with participation from several angel investors. Founded in 2017, the New York-based company is the operator of a peer-to-peer marketplace for crypto assets such as art, trading cards and collectibles. | | | | | | | | 3D printing company brings in $20M | | | Fortify has raised a $20 million Series B led by Cota Capital, with participation from Accel, Neotribe Ventures and Prelude Ventures. The Boston-based company is the developer of a digital composite manufacturing platform for the 3D printing industry. Founded in 2016, Fortify was valued at $28.6 million in 2019, according to PitchBook data. | | | | | | | | OpenReel collects $19M for video creation platform | | | OpenReel has raised a $19 million Series A led by Five Elms Capital. The New York-based company is the developer of a video creation platform that helps remote teams throughout the world record and collaborate on content. OpenReel, which is also backed by investors including Brooklyn Bridge Ventures and Forefront Ventures, was valued at $13.7 million in 2019, according to PitchBook data. The startup works with consumer brands, media companies and other agencies. | | | | | |
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| Thoma Bravo nears $3.7B Calypso takeover | | | Thoma Bravo is close to an agreement to buy Calypso Technology from Bridgepoint and Summit Partners, Bloomberg reported. The deal is said to value the financial software company at up to $3.7 billion, well above initial expectations, which put the valuation at roughly $2 billion. Bridgepoint and Summit acquired Calypso, which provides trading and risk management software to financial institutions, for $800 million in 2016, according to the report. | | | | | | | | PE-backed Pangiam picks up VeriScan | | | Pangiam has acquired biometric facial recognition company VeriScan from the Metropolitan Washington Airports Authority. VeriScan's technology is used by airports and airlines to verify travelers' identities in place of passports or boarding passes. The deal marks the first acquisition by Pangiam, a security and travel services provider, since AE Industrial Partners formed the company in October by merging Linkware and PRE. | | | | | | | | Silver Lake to take stake in Relativity | | | Silver Lake has agreed to make a strategic growth investment in legal and compliance software maker Relativity. The transaction will make Silver Lake the largest shareholder in the Chicago-based company and values Relativity at some $3.6 billion, according to a report from The Wall Street Journal. As part of the deal, current investor Iconiq Capital will retain an interest in the company. | | | | | | | | Team Technologies takes over ViruDefense | | | Specialty healthcare manufacturer Team Technologies has acquired ViruDefense, a supplier of personal protective equipment based in Massachusetts. The company's VDI-100 mask, developed in partnership with Team, combines the fluid resistance capabilities of a surgical mask with the filtration levels of an N95 respirator. Team is backed by Clearlake Capital, which acquired the Tennessee-based company in 2018. | | | | | |
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| UBiome founders charged with fraud | | | The founders of bankrupt microbiome health startup UBiome have been charged with fraud by the SEC and a federal grand jury. The SEC complaint alleged that Jessica Richman and Zachary Apte deceived private investors during the company's Series C in 2018, which was led by OS Fund, with 8VC, Y Combinator and Dentsu Ventures participating. Apte and Richman were also indicted by a federal grand jury in California on charges of conspiracy to commit securities fraud, money laundering and other offenses. | | | | | |
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| Rockley Photonics to go public via SPAC merger | | | | | | | | | Vivid Seats eyes deal with Todd Boehly SPAC | | | Digital ticket marketplace Vivid Seats is in advanced discussions to merge with a blank-check company led by Todd Boehly, co-founder, chairman and CEO of Eldridge Industries, Bloomberg reported. The deal could value the combined company at about $2.5 billion, with Vivid's private equity backers GTCR and Vista Equity Partners ready to roll their stakes into the new company, the report said. | | | | | | | | PE-backed Alignment Healthcare seeks $3.5B+ valuation in public debut | | | Alignment Healthcare, the creator of a platform that provides coverage and services for seniors enrolled in Medicare Advantage plans, is aiming to go public at a valuation of as much as $3.56 billion, based on the number of shares outstanding. Backed by Warburg Pincus and General Atlantic, the Orange, Calif.-based company hopes to raise up to $517 million in the IPO by selling 27.2 million shares for between $17 and $19 each. | | | | | |
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| Blackstone closes $4.5B growth fund | | | Blackstone has announced the final close of its first growth equity fund on a hard cap of $4.5 billion. The firm has already made several investments out of the Blackstone Growth vehicle, backing online dating company Bumble prior to its IPO, as well as vegan food products maker Oatly, enterprise software provider ISN, and Epidemic Sound, a royalty-free music company. | | | | | | | | Lexington banks $3.2B for co-investment vehicle | | | Lexington Partners has closed its fifth co-investment fund on $3.2 billion, surpassing its initial hard cap of $3 billion. Lexington Co-Investment Partners V will be used primarily to back US and European companies alongside private equity sponsors; the firm began investing out of the fund last September. | | | | | | | | Juxtapose lands $300M for Fund II | | | New York-based Juxtapose has closed its latest namesake fund with $300 million in commitments. The tech-focused VC firm's portfolio includes dentistry startup Tend, real estate platform operator Orchard, and Great Jones, a property management startup. Juxtapose was founded in 2015. | | | | | |
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| Chubb offers to buy Hartford for $23B+ | | | Chubb, one of the biggest property and casualty insurers in the US, has offered to buy rival Hartford Financial Services Group for $65 a share, which would reportedly value the company at more than $23 billion. While Chubb's bid is unsolicited, Hartford's board said in a statement it is "carefully considering the proposal." | | | | | |
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