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In today's Daily Pitch, you'll find: - Our Global Fund Performance Report puts dramatic returns into context with new Q1 2021 data.
- Self-driving vehicle specialist Nuro has raised $600 million in new funding as competition in the delivery market continues to intensify.
- The four largest publicly traded private equity firms shattered records and hauled in unprecedented amounts of money in Q3.
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| VC, PE funds show staggering returns to kick off 2021 | | Venture capital funds posted an eye-popping horizon IRR of 52.5% in Q1, followed closely by PE's return of 47.6%. The one-year figures look especially dramatic as the comparison period started on the upswing following the dismal Q1 2020. Other key takeaways from our latest Global Fund Performance Report include: - Both PE and VC funds significantly outperformed the S&P 500 for the year ended March 31. Yet a reversion could be possible as private market performance returns to normal, as it is historically less extreme than that of the public markets.
- While unrealized VC returns have been less frequently negative in the past five years than overall private capital figures, the past five quarters have shown a massive amount of unrealized contribution to returns.
- Through Q1 2021, private cash flow distributions had already reached 31.4% of full-year 2020 distributions. If that pace continues, 2021 could be the second year in a row with record cash returned to LPs.
- Real estate funds appear to have lagged again going into Q2, as the headwinds for retail and office space combine with tailwinds for industrial and storage to provide mediocre returns.
| | | | | | | | | | Nuro nabs $600M to automate the delivery wars | |  | | (Courtesy of Nuro) | | | Nearly a year after DoorDash's watershed IPO, competition in the delivery market has only intensified. More than $21 billion in global VC investment was ploughed into last-mile delivery startups in the first three quarters of 2021, on pace to surpass a record set in 2018, according to PitchBook data.
More disruption may be on the way: Self-driving vehicle company Nuro has raised $600 million on the belief that autonomous robots will supplant the small armies of delivery workers that currently power the sector. - Nuro was valued at $8.6 billion in the deal, TechCrunch reported, up from $5 billion earlier this year, according to PitchBook data.
- Tiger Global led the round, adding Nuro to a list of bets on food delivery that also includes Zomato, Postmates and Grofers. Google joined the round and struck a deal to have Nuro's self-driving data and machine learning workloads run on Google Cloud.
- Nuro's core advantage is a passenger-free design that allows it to prioritize pedestrians or other vehicles in its safety decisions, said Asad Hussain, an emerging tech analyst at PitchBook. The company also benefits from strategic partnerships with FedEx, CVS and Walmart, among others.
- Bay Area-based Nuro is preparing for the mainstream rollout of its delivery service, which will follow the completion of its third-generation vehicle and a new manufacturing facility in Nevada.
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| A message from CohnReznick | | |
| Cybercriminals are watching your deal activity | | Deal announcements can alert cybercriminals that a target company now has more capital behind it, endangering not just the target but also the private equity firm's whole ecosystem.
CohnReznick has seen a significant increase in attacks on portfolio companies directly following the announcement of a deal. Bad actors will attack a target and, if successful, move through the portfolio. PE firms should look closely at the security systems and processes of their target companies, asking detailed questions about cybersecurity as part of due diligence. It's important to know if a target can withstand an attack and, if not, what steps are necessary to strengthen security during the deal and immediately post-close.
Learn five ways to assess and address targets' cybersecurity and help protect your firm. | | | | | | | |
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| 'Big four' PE firms notch records in Q3 | |  | | (simonlong/Getty Images) | | | The four largest publicly traded private equity firms saw a lucrative third quarter, breaking individual records and bringing in unprecedented amounts of money. KKR and Apollo Global Management released their Q3 earnings reports Tuesday. - KKR saw its private equity portfolio climb 9% in the quarter, while bringing in over $1.1 billion in net income. Its distributable earnings, or the money that the firm can return to shareholders, hit $925 million, up 104% year-over-year.
- Apollo saw its distributable earnings hit a record high of $752 million, despite its net income falling to $249 million in the quarter compared with $263 million in Q3 2020.
| | | | | | | | | | EIB, Portugal launch $290M startup program at Web Summit | |  | | (Eóin Noonan/Web Summit via Sportsfile/CC BY 2.0) | | | The European Investment Bank and the Portuguese government have expanded a joint investment program in a bid to help raise €250 million (about $290 million) for Portuguese startups.
The country's VC ecosystem has so far seen modest investment relative to its neighbors, but Portugal Tech II, announced at the 2021 Web Summit in Lisbon, aims to change that. | | | | | | | | | | BlackRock halves stake in THG as shares in the ecommerce giant plummet | |  | | (Leon Neal/Getty Images) | | | BlackRock has exited nearly half its stake in THG, selling 58 million shares at a 10.3% discount to the stock's Monday closing price and helping drive shares to their lowest point ever. - BlackRock had held 9.55% of the company, the Financial Times reported, making the firm the largest stockholder behind founder and CEO Matthew Moulding. The £113 million sale follows a steep decline in the price of the ecommerce giant's stock over the past several weeks.
- THG's recent earnings revealed that operating losses have doubled despite increasing revenue, and an investor presentation in October failed to allay concerns about the company's technology unit, Ingenuity.
- SoftBank agreed this spring to invest up to $1.6 billion in Ingenuity; the deal has raised eyebrows due to the high valuation it implied for the unit. THG announced plans last month to cancel Moulding's special share rights and appointed a SoftBank executive to its board, yet the stock price has continued to plummet.
| | | | | | | | | | Regulators and investors alike are pushing for ESG transparency. Now it's time for private companies to come clean. [Institutional Investor]
Despite a lagging urban recovery in the region, tech giants like Facebook and TikTok are seeking major office expansions in the Bay Area. [San Francisco Chronicle]
How big tech companies like Qualcomm are proving to investors that they plan to stay relevant in the age of cloud computing and AI. [The Economist] | | | | | |
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| | Since yesterday, the PitchBook Platform added: | | 497 Deals | 1467 People | 404 Companies | 25 Funds | | | | | | |
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| 2020 Vintage Global Funds-of-Funds | | | | | | |
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| Life sciences venture investment racing toward a historic year | | With three months to go, this year has already seen a record sum of VC invested in life sciences, at $35.8 billion across 1,510 deals in the US. Orrick's Life Sciences Snapshot draws on a slew of PitchBook venture datasets to provide a summary of key market trends and insights from experts within the space, with highlights including: - How record financing sizes and valuations compare.
- The impact of the equities bull market for exits.
- A spotlight Q&A on key macro and market trends in European life sciences.
Read the report | | | | | | | |
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| | | Mynt has raised $300 million at a $2 billion valuation in a round co-led by Warburg Pincus and Insight Partners, according to reports. The Philippines-based company offers a mobile payments platform in addition to loans and other financial services. | | | | | | | | Everlaw secures $202M Series D | | | Everlaw has raised $202 million at a more than $2 billion valuation in a round led by TPG. The Oakland, Calif.-based company is the developer of a cloud-based litigation platform designed for corporate counsels, litigators and government attorneys. Everlaw was valued at $578 million in September 2020, according to PitchBook data. | | | | | | | | Chipper Cash banks $150M for cross-border payments platform | | | Chipper Cash has added $150 million to its Series C round, TechCrunch reported. The funding, which was led by FTX, reportedly values the company at more than $2 billion. Founded in 2018, Chipper Cash operates a cross-border money transfer platform across Africa and Europe. | | | | | | | | Kleiner Perkins leads $50M round for dental startup | | | LightForce Orthodontics has raised a $50 million Series C led by Kleiner Perkins. Based in the Boston area, the company is the developer of a 3D-printed orthodontic braces system designed to help orthodontists customize treatments. LightForce Orthodontics was valued at $43.7 million in September 2020, according to PitchBook data. | | | | | | | | | Contra, the provider of a professional networking platform, has raised $30 million in a round led by NEA. Founded in 2019, the San Francisco-based company now enables independent workers to accept commission-free payments for their services. Existing investors Unusual Ventures and Cowboy Ventures also participated in the funding. | | | | | |
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| Ardian takes minority stake in real estate company | | | Ardian has acquired a minority stake in Strategie Media Conseil, the provider of a French digital real estate classifieds platform that offers luxury properties. Founded in 1994, the company connects homebuyers and tenants with some 2,000 real estate agencies. It employs almost 50 people. | | | | | | | | Arsenal Capital Partners lands Guidemark Health | | | Arsenal Capital Partners has purchased Guidemark Health, a healthcare marketing communications, training and medical education agency with offices in New Jersey. Founded in 2000, Arsenal typically targets middle-market industrials and healthcare companies. | | | | | | | | BPEA set to buy Tricor in $2.7B+ deal | | | Baring Private Equity Asia has agreed to acquire Tricor Group from Permira in a deal that gives the company an enterprise value of $2.76 billion. Tricor is a Hong Kong-based business expansion specialist that helps facilitate globalization in Asia. Founded in 2000, the company serves around 50,000 clients globally and employs more than 2,800 people. Permira has backed Tricor since 2017. | | | | | | | | TPG backs Keter Environmental Services | | | TPG has invested in Keter Environmental Services, a recycling and waste management company focused on providing sustainable recycling and waste programs. The Stamford, Conn.-based company helps more than 500 locations across 46 states manage their waste. | | | | | |
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| Delhivery targets $5.5B+ valuation in IPO | | | Delhivery has filed for an IPO that could raise up to 74.6 billion rupees (about $998 million). The Indian logistics startup is seeking a valuation of more than $5.5 billion in the listing, Reuters reported. SoftBank is the largest shareholder in Delhivery, which is also backed by investors including The Carlyle Group, Tiger Global and Nexus Venture Partners. The company was reportedly valued at $3 billion in May. | | | | | | | | Shareholders approve Bird-SPAC merger | | | Switchback II, a blank-check company, has announced that its shareholders have voted to approve a reverse merger with Bird. Shares of the scooter rental company will start trading on the NYSE on Thursday. The Santa Monica, Calif.-based company was valued at more than $2.3 billion in April, according to PitchBook data. | | | | | |
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| EQT brings in $18B+ for infrastructure fund | | | EQT has held a final close on €15.7 billion (about $18.2 billion) for its fifth infrastructure vehicle. Since its launch in 2020, EQT Infrastructure V has backed 12 companies, including North American energy transition companies Covanta and Cypress Creek. | | | | | | | | 137 Ventures closes $350M fund | | | San Francisco-based 137 Ventures has raised $350 million for its fifth flagship fund. Founded in 2011, the growth-stage venture firm has backed companies including SpaceX, Gusto and Turo. 137 Ventures closed its fourth fund at $250 million in 2019. | | | | | |
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