| | | | | Opaque private equity is marketing to retail investors despite pushback | |  | | (Spencer Platt/Getty Images) | | | It's been a year since federal officials announced policies meant to crack open private equity funds for the first time to retail investors through 401(k) plans and other pensions.
Along the way, dueling views on the risks and returns of these products have sparked fierce debate over whether the asset class has driven the returns it claims to offer. - On the one hand, allowing retail investors to tap into private equity funds exposes them to an asset class that's historically been reserved for pensions, endowments and other institutional investors.
- On the flip side, private equity funds have shown to be complex, illiquid and chockful of expensive management fees that cut into overall returns.
- While the debate rages, private equity firms have used workarounds to get access to retail traders through the public markets.
| | | | | | | | | | VC interest in retail health and wellness tech sets a record | | Increasing healthcare costs have given rise to consumer-focused healthcare products that aim to improve health and wellbeing for less. Venture funding for retail health and wellness tech startups set a record in the first quarter of 2021, with $4.2 billion invested across 153 deals.
Our latest installment of Emerging Tech Research provides an overview of the latest developments and opportunities in the retail health and wellness tech vertical, including valuations, exits and the effects of the pandemic. Among the takeaways: - We expect investment in the vertical to remain robust in the foreseeable future, especially among personalized medicine and testing providers and virtual health companies.
- Remote patient monitoring devices, which monitor and send real-time feedback to healthcare providers, have been proven to provide strong outcomes at low costs. Information collected from these devices is opening doors to new data-driven treatments.
- Digital opportunities for fitness tech startups, which raised record VC funding in 2020, are likely to remain strong even as consumers return to the gym post-pandemic.
| | | | | | | | | | A message from KEY Investment Partners LLC | | | | Why do bubbles burst in emerging sectors like crypto, cannabis and psychedelics? | | New technological innovations and consumer product categories often demonstrate massive growth potential. These technologies (for example, cryptocurrencies, virtual reality and artificial intelligence) and product categories (such as cannabis, psychedelic therapeutics and alternative proteins) in turn attract massive investor demand.
However, there is almost always a disconnect between consumer acceptance of these technologies/products and the capital markets performance of these emerging sectors. What drives this dislocation? Why do investors overvalue emerging businesses at the beginning of cycles and undervalue them later on?
In this white paper, KEY Investment Partners discusses the boom-and-bust cycles of emerging sectors. KEY highlights the cryptocurrency, cannabis and psychedelics industries as relevant case studies. | | | | | | | | | | Andreessen bets on Latin American 'fintech boom' | | Andreessen Horowitz has placed its latest fintech bet on Jeeves, an expense management startup targeting international companies, with a focus on Latin America. - A16z general partner Angela Strange, who is reportedly joining Jeeves' board, has opined that a "fintech boom" is coming to the region, where many people remain unbanked and cash is still king. The firm has backed Brazilian digital bank Nubank as well as Colombian consumer credit startup Addi.
- Jeeves' $131 million round consisted of $31 million in equity and $100 million in debt, TechCrunch reported. The heads of Nubank, Kavak and Rappi, some of Latin America's most valuable VC-backed companies, according to PitchBook data, also took part in the round alongside other angels.
- A graduate of Y Combinator's summer 2020 cohort, Jeeves was built for the remote age: Its main offering is a corporate credit card aimed at international startups who need to pay expenses across borders and in multiple currencies.
- Other investors are similarly sweet on Latin American opportunities. SoftBank, which launched a $5 billion fund dedicated to the region in 2019, has reportedly invested in mega-rounds for real estate marketplace QuintoAndar and lending platform Creditas, both based in São Paulo.
Related read: VC interest in Latin America swells as fintech takes flight | | | | | | | | | | Why the reopening of the US economy is creating a contest between the most powerful investment firms on Wall Street. [Financial Times]
Could working less, not more, hold the key to productivity? [The Washington Post]
Many businesses have pledged to fight racism. Now, some are putting money behind those pledges by tying CEO pay to workplace diversity goals. [The Wall Street Journal] | | | | | | | | | | | Since yesterday, the PitchBook Platform added: | | 575 Deals | 1861 People | 466 Companies | 37 Funds | | | | | | | | | | | | | | | | | | | | 2015 Vintage European PE Funds | | | | | | | | | | | PitchBook Webinar: A look at biotech and pharma's biggest year ever | | Though the past year has been fraught with challenges and unknowns, the biotech and pharmaceutical industries have risen to the occasion with new technology and unprecedented VC funding.
Learn more about recent innovations, the potential for market growth and what the future holds for this vertical in our upcoming webinar. PitchBook analysts Joshua Chao and Kaia Colban will bring their expertise in pharma, biotech, digital health and wellness tech as they discuss the growth of these sectors in 2020 and their potential in 2021.
Sign up here to join us Wednesday, June 9 at 10 a.m. PT. | | | | | | | | | | | | Cota Capital announces addition of two partners | | | Cota Capital, a San Francisco-based investment firm focused on private and public enterprise tech companies, has expanded its fintech practice with the hiring of two new partners: Kevin Jacques and Ben Malka. Jacques joined Cota from Visa Ventures, where he was vice president and head of the firm. Malka was previously with Fidelity Investments, where he served as a partner on many fintech investments. | | | | | | | | | | | | Celonis tops $11B valuation with $1B Series D | | | Celonis has raised $1 billion in a round led by Durable Capital Partners and T. Rowe Price. The Series D values the Munich-based software provider at over $11 billion and makes it Germany's most valuable venture-backed company. Celonis' process mining software lets clients analyze their operations to identify inefficiencies and streamline processes. The company was valued at $2.5 billion in 2019 following its $290 million Series C. | | | | | | | | Urban Company cleans up with $255M | | | | | | | | | Outreach hits $4.4B+ valuation with latest financing | | | Outreach, a creator of sales engagement and intelligence software, has raised $200 million at a valuation of over $4.4 billion, up from $1.33 billion last year, according to PitchBook data. Premji Invest, the family office of Indian tech billionaire Azim Premji, co-led the round with Steadfast Capital Ventures. Seattle-based Outreach has more than 800 global employees and its software is used by tech companies like Snowflake, Zoom and DocuSign. | | | | | | | | Guild Education books $150M | | | | | | | | | Yieldstreet banks $100M for alternative investing | | | Yieldstreet has raised a $100 million Series C led by Tarsadia Investments, with participation from Kingfisher Investment, Top Tier Capital Partners and Gaingels. Founded in 2015, the New York-based company is the developer of a wealth management platform that helps retail investors access alternative investments such as real estate, marine and aviation. Yieldstreet is also eyeing a deal to go public through a combination with a SPAC, TechCrunch reported. | | | | | | | | Shippo becomes unicorn with $50M round | | | Shipping logistics company Shippo has raised $50 million at a $1 billion valuation, nearly double what it was worth just a few months ago, according to PitchBook data. Bessemer Venture Partners led the round for San Francisco-based Shippo, which aims to offer Amazon-like delivery services for smaller merchants. | | | | | | | | | | | | Advent eyes $1.5B buyout of Oxiteno | | | | | | | | | PE-backed Escalent adds on Grail Insights | | | Escalent has acquired Grail Insights, an Oakland, Calif.-based strategic insights consultancy for sectors including retail, healthcare and financial services, from NewQuest Capital Partners. Escalent, a Michigan-based provider of human behavior and analytics advisory services, has been backed by STG Partners since 2018, when the firm purchased and combined Market Strategies International and Morpace, later relaunching them as Escalent. | | | | | | | | Platinum Equity drives away with Club Car | | | Platinum Equity has acquired Club Car, an Augusta, Ga.-based maker of golf carts and other related vehicles and products, from Ingersoll Rand in an all-cash deal valued at roughly $1.7 billion. Platinum is currently investing out of its fifth flagship fund, which closed on $10 billion in early 2020. | | | | | | | | PE-backed Coalfire does security deal | | | Apax Partners-backed Coalfire, a provider of cybersecurity services, has acquired San Antonio-based security software maker Denim Group. The two companies will serve over 1,800 clients, including the top five cloud service providers, half of the largest US banks, and leading government agencies. Apax Partners has owned Coalfire since April 2020. | | | | | | | | Clearlake Capital backs software maker BeyondTrust | | | | | | | | | | | | | Etsy inks $1.6B+ deal for VC-backed Depop | | | Etsy has agreed to buy online secondhand fashion marketplace Depop for over $1.62 billion. The UK company has around 30 million users in over 150 countries and reported revenue of $70 million last year. It will remain based in London and operate as a standalone entity following the acquisition. Depop is backed by investors including Balderton Capital, General Atlantic and Octopus Ventures. The company raised a $62 million Series C in 2019. | | | | | | | | Caledonia exits UK's Deep Sea Electronics | | | Caledonia Private Capital has sold Deep Sea Electronics, a developer of backup power control systems, to NYSE-listed Generac Holdings. The UK firm netted £242.2 million (about $343 million) for its 84.2% stake, Private Equity Wire reported. Caledonia acquired Deep Sea in 2018 in a deal that valued the UK-based company at £162 million. | | | | | | | | | | TA Associates hauls in $12.5B for 14th fund | | | TA Associates has raised $12.5 billion for its 14th namesake fund, exceeding an original target of $10.5 billion. The firm has also closed its second select opportunities fund on $1.5 billion. The new flagship vehicle will be used to continue TA's focus on the technology, healthcare, financial services, consumer and business services sectors. TA XIV's predecessor closed on $8.5 billion in 2019. | | | | | | | | Mercato Partners closes $100M restaurant-focused fund | | | Mercato Partners has closed Savory Fund II, its second vehicle dedicated to investing in restaurant concepts, on $100 million. Based in the Salt Lake City area, the firm has backed companies including Lendio, the operator of a marketplace for small business loans, and Domo, the developer of a cloud-based operating system for businesses. Mercato targets the technology, branded consumer, and food and beverage sectors. It closed its inaugural Savory fund on $90 million in June 2020. | | | | | | | | | "In Q1 2021, 23 deals involving unicorns have already been completed, in comparison to 38 for all of 2020. Dealmaking for unicorns has increased in frequency in 2021, and we expect a record quantity of deals involving €1 billion-plus companies to be set at the end of the year."
Source: PitchBook's Q1 2021 European VC Valuations Report | | | | | | | | | Who's in the newsletter today? | | People | | | | Investors | | | | Companies | | | | | | | | | | | | | |
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