The pandemic didn’t hit stateside full force until March, marking the second quarter as the first period of purely coronavirus-impacted data for the venture industry.
The bottom line: While venture capitalists are open for business, it’s most certainly not a typical year. Deal activity in the second quarter slowed to $34.3 billion across 2,197 deals, a 23.2% decline in deal count from the first quarter of 2020, according to PitchBook and NVCA’s Venture Monitor, which released Tuesday.
Looking at the granules, the pandemic created a funding environment with no comparison.
Early on, investors expected late-stage company valuations to take a hit in a slowdown, as many companies nearing an exit have their valuations tied to those of public firms. But, perhaps as a result of a strong level of dry powder and the market’s rapid bounce back this time around, late-stage activity is on track to surpass 2019.
Late-stage mega deals, which the report defines as raises of over $100 million, grew to over 100 in the first half of 2020. That comes as investors double down on companies bulging at the seams as COVID-19 puts consumers online (think the likes of online grocery delivery company Instacart) or seek out companies they think are currently trading at a discount but will emerge from the virus (think home-sharing company Airbnb). Some 175 deals closed in all of 2019.
Other notable takeaways:
- In the past, corporate venture investors were among the first to bow out in financially difficult times. Not so this time around: Corporate venture capitalists participated in 26% of all U.S. Deals, setting a new high. Private equity firms participated in 13.9%, another record.
- But not everything is rosy. Exits of venture capital-backed companies are on pace for their lowest since 2011—which could mean lower liquidity for Limited Partners. “An extended economic decline would change some longer-term behaviors around commitments to venture capital,” per the report.
Going up against Tesla: Instead of raising in private markets, Fisker, an electric SUV maker, decided to merge with a Special Purpose Acquisition Company backed by Apollo Global Management. This isn’t founder Henrik Fisker’s first rodeo. He designed cars for BMW and Aston Martin, and took a fall when his first EV effort, Fisker Automotive, filed for bankruptcy a decade earlier.
So why go public? “Having done this before, I just don’t feel it’s a good idea to try and raise so much capital in private rounds,” Fisker told my colleague, Aaron Pressman . “One round can be delayed, for whatever reason, and that means your product launch gets delayed, which then means you need to raise more money. I just don’t feel this works.” Read more.
Lucinda Shen
Twitter: @shenlucinda
Email: [email protected]
VENTURES DEALS
- Oatly, a Swedish oat milk maker, raised $200 million. Blackstone Growth led the round. Other investors include Oprah Winfrey, Roc Nation, Natalie Portman, Howard Schultz (Starbucks), Orkila Capital and Rabo Corporate Investments
- Karma Kitchen, a UK-based cloud kitchen, raised £252 million ($318 million) in Series A funding. Investors include Vengrove Asset Management. Read more.
- Medly Pharmacy, a New York-based digital pharmacy, raised $100 million in Series B funding. Volition Capital and Greycroft led the round and were joined by investors including Horsley Bridge and Lerer Hippeau.
- Skydio, a U.S. Producer of autonomous drones, raised $100 million in Series C funding . Next47 led the round.
- Pricefx, a cloud-native pricing software, raised $65 million in Series C funding. Apax Digital led the round and was joined by investors including Digital+ Partners.
- Lattice, a San Francisco-based human resources platform, raised $45 million in Series D funding. Tiger Global led the round and was joined by investors including F rontline Ventures, Founders Fund, Khosla Ventures, Thrive Capital Partners, Fuel Capital, and Y Combinator.
- Nasuni, a Boston-based cloud file storage company, raised $25 million from investors including Family Offices, Venture Capital and Corporate Venture.
- Traceable, an application security monitoring platform launched by AppDynamics CEO Jyoti Bansal, raised $20 million in Series A funding from Unusual Ventures and BIG Labs.
- TileDB, Inc., a Cambridge, Mass.-based data engine, raised $15 million in Series A funding. Two Bear Capital led the round and was joined by investors including Uncorrelated Ventures, Nexus Venture Partners, Intel Capital, and Big Pi Ventures.
- Movano Inc., a Pleasanton, Calif. Health tech company for those with chronic health conditions, raised $10 million in a bridge round led by Tri-Valley Ventures.
- Userlane, a Munich-based software adoption platform, raised €10 million ($11.3 million) in Series B funding. Five Elms Capital led the round and was joined by investors including Capnamic, High-Tech Gründerfonds,, and Commerzbank Group.
- Pattern Bioscience, an Austin-based bacterial identification and susceptibility testing firm, raised $9 million in extended Series B funding. Illumina Ventures led the round and was joined by investors including Omnimed Capital.
- CyberSmart, a London-based cybersecurity company, raised £5.5 million in Series A funding. IQ Capital led the round.
- MadKudu, a Mountainview, Calif.-based AI-based predictive analytics and marketing firm, raised $5.5 million in Series A funding . Benhamou Global Ventures led the round and was joined by investors including Alven and Partech.
- BuyBack Booth, a Montreal-based robotics company, raised $5.2 million in seed funding. Brightspark Capita l led the round.
- Liteboxer, a New York-based boxing platform, raised $4 million in seed funding. Will Ventures led the round.
- Orbital Witness, a U.K.-based proptech startup, raised £3.3 million ($4 million) in seed funding. LocalGlobe and Outward VC led the round and were joined by Seedcamp and JLL Spark.
Bbot Inc., a New York-based restaurant and hospitality tech startup, raised $3 million in seed funding. Craft Ventures led the round.
- Digital Asset, a New York-based creator of open source DAML smart contract language, raised an undisclosed amount from VMware as part of its Series C round.
PRIVATE EQUITY
- Web.com Group, backed by Siris Capital, agreed to acquire Webcentral Group (ASX:WCG), a provider of digital services for small and medium Australian businesses. Financial terms weren't disclosed.
- Wrench Group, backed by Leonard Green and Partners, acquired Tampa-based Easy A/C and California-based Service Champions North, HVAC firms. Financial terms weren't disclosed.
- Groundworks Companies, backed by Cortec Group, acquired Foundation Services Michigan, provider of foundation repair services in Michigan and the Midwest. Financial terms weren't disclosed.
- Align Capital Partners invested in WilliamsMarston, an accounting advisory and management consulting firm with offices in Boston and New York. Financial terms weren't disclosed.
- Service Champions, a portfolio company of CenterOak Partners, acquired ABC Cooling Heating & Plumbing, a Hayward, Calif.-based provider of residential air conditioning and plumbing repair services. Financial terms weren't disclosed.
- NIBC, a Dutch bank , agreed to a proposed takeover bid from Blackstone, it at €1 billion ($1.1 billion). Blackstone lowered its offer to €7 per share from a previous €9.85 per share following the pandemic.
- Madison Dearborn Partners agreed to acquire Benefytt Technologies, a health insurance technology company, for about $410 million.
OTHERS
- Google is in advanced talks to acquire a $4 billion stake in Jio Platforms, an Indian telecom company. Read more.
- Mediaocean agreed to acquire 4C Insights Inc, a data science and marketing technology company. Financial terms weren't disclosed.
- Voyager Space Holdings acquired Pioneer Astronautics, a Lakewood, Colo.-based space exploration company, in a cash and stock transaction. Financial terms weren't disclosed.
- Hewlett Packard Enterprise agreed to acquire Silver Peak Systems, a provider of SD-WAN. The deal values Silver Peak at about $925 million.
IPOs
- MultiPlan, a healthcare services provider, will merged with Churchill Capital Corp III, a SPAC run by former CItigroup banker Michael Klein. The deal gives MultiPlan an enterprise value of about $11 billion . MultiPlan is currently owned by Hellman & Friedman. Read more.
- SoftBank is weighing a full or partial sale or public offering of Arm Holdings, its British chip designer. Read more.
EXITS
- EQT VII fund agreed to sell IFS AB, an enterprise software provider, to the successor funds EQT VIII and EQT IX, as well as TA Associates for about €3 billion ($3.4 billion).
F+FS
- TrueBridge Capital Partners closed its sixth venture capital fund-of-funds with $600 million in commitments.
PEOPLE
- TrueBridge Capital Partners promoted Rob Mazzoni to partner.
- Arsenal Capital Partners added Aaron Wolfe as an investment partner. He was previously a managing director at Sun Capital Partners. It also promoted John DiGiovanni to investment partner.