|
The IPO Market Experiences a Hiccup
|
|
By Yuliya Chernova, WSJ Pro
|
|
|
|
|
Good day. The venture industry has reorganized itself over the past year around the frothy IPO market.
Venture firms raised larger funds to have more capital for pricey pre-IPO rounds. They started sponsoring special-purpose acquisition companies, a strategy well outside the purview of traditional venture capital. And they have been increasingly willing to pay higher valuations, betting on even bigger public-market exits.
All in all, more is at stake for venture investors when it comes to any changes in how well public investors treat new listings. The higher the valuations, the fewer the options for exits and follow-on fundraising should markets turn. And venture capitalists must also watch for stock performance post-initial public offering, as they are usually prevented from selling their shares for about six months.
That makes last week’s hiccup in the IPO market worrisome.
The Renaissance IPO Index declined 8.9% for the week ended Friday, compared with a negative 2.4% return for the S&P 500. Some members of the Renaissance IPO Index, which tracks the performance of the largest recently listed companies in the U.S., dropped by double digits last week, such as DoorDash, which saw its weekly returns at negative 17.7%, and nCino, which declined 16%.
“The IPO market gave up most of its 2021 gains in February,” William K. Smith, chief executive and co-founder of Renaissance Capital LLC, wrote in an email to subscribers Monday. “Despite the weak returns last month, the IPO market proved to be the most active February in 21 years with 33 deals. Including SPACs, the month saw an unprecedented 131 offerings,” Mr. Smith continued.
There were also a record of 36 IPO filings made in February, according to Renaissance. The IPO market must remain strong for those deals, as well as for the VC market broadly, to stay on track.
And now on to the news...
|
|
|
|
|
Video streaming company MobiTV is filing for bankruptcy, and will receive a $15.5 million loan from T-Mobile US while it looks for a buyer. PHOTO: JEENAH MOON/BLOOMBERG NEWS
|
|
|
Bankruptcy Filing. Venture-capital-backed video streaming company MobiTV Inc. filed for bankruptcy protection, and plans to look for a buyer while staying afloat with a $15.5 million loan from T-Mobile US Inc., WSJ Pro’s Becky Yerak reports. The Emeryville, Calif.-based software company entered chapter 11 proceedings in the U.S. Bankruptcy Court in Wilmington, Del., with total assets of $19 million and liabilities of $75 million.
-
Major shareholders include Oak Investment Partners, which owns 44% of the common stock.
-
As recently as 2019, MobiTV received $50 million in new funding from backers including Oak.
-
MobiTV holds key contracts with T-Mobile and more than 120 cable and broadband TV providers to deliver streaming content to more than 300,000 subscribers.
|
|
$3.5 Billion
|
The amount that life sciences investor OrbiMed Advisors raised across three new funds, including a $1.5 billion pool targeting North American and European startups.
|
|
|
Some Pandemic Changes to PE Will Stick, Bain Report Says
|
|
Private equity’s Covid-19 symptoms may have seemed mild, but some effects are likely to linger, according to a new report on how the industry fared last year, WSJ Pro’s Chris Cumming reports. The industry held up remarkably well through the economic shock of the coronavirus pandemic, according to the 2021 Global Private Equity Report released Monday by the consulting firm Bain & Co. Investment by buyout firms globally rose 8% last year to $592 billion, on the strength of bigger deals, according to the report, which cited data from Dealogic Ltd. and Preqin Ltd. Exits were roughly flat, at $427 billion, while fundraising reached $989 billion, which was down from the all-time high seen in 2019 but still
the third-highest sum ever.
|
|
|
|
|
Funds
Life sciences investor OrbiMed raised $3.5 billion in commitments across three new funds. The firm secured $1.5 billion for OrbiMed Private Investments VIII LP, which will invest between $10 million to $100 million per deal in roughly 40 North American and European biotechnology, medical device and diagnostics companies. OrbiMed Asia Partners IV LP collected $800 million to invest between $10 million to $100 million in about 20 Chinese and Indian companies focused on biotechnology, pharmaceuticals, medical devices, diagnostics and healthcare services. OrbiMed Royalty & Credit Opportunities III LP closed with $1.2 billion in commitments to provide between $10 million to $150 million per deal via structured credit and royalty monetization financing for healthcare companies and institutions. These new funds bring OrbiMed’s assets under management to approximately $18
billion across public equity, private equity and credit/royalty strategies.
2150 has held the first €130 million ($157 million) close of its flagship €200 million fund to invest in about 20 companies seeking to sustainably reimagine and reshape the urban environment. Initial investments will range from €1 million to €7 million, with the possibility of up to €40 million per company over time. Key limited partners in the fund include Chr. Augustinus Fabrikker, Green Future Fund and Novo Holdings. The fund’s inaugural investment was in CarbonCure Technologies, a Canadian company lowering the CO2 footprint of concrete. 2150 is based in London, Copenhagen and Berlin.
Chicago Ventures raised $63 million for its third fund to continue leading seed rounds in companies located outside of the traditional coastal tech hubs. To date, the new fund has invested in 11 startups including CognitOps, CoPilot, Forager, Interior Define, NOCD, OneRail, PreFix and Ureeka, along with three unannounced investments. In addition to the fund, Chicago Ventures named Jackie DiMonte as partner, and promoted Peter Christman and Lindsay Knight to partner. Ms. DiMonte joins the firm from Hyde Park Venture Partners. Prior to Chicago Ventures, Mr. Christman led growth efforts at Choose Energy. Ms. Knight previously worked at CHOUmedia and Ocean Tomo.
People
ThruWave Inc., a provider of 3D imaging for logistics and supply chain automation, named Pieter Krynauw as chief executive. He was most recently president of Honeywell Intelligrated. Last year, Seattle-based ThruWave was seeded with a $6.4 million investment from E14 Fund, Ubiquity Ventures, Root Ventures, Blue Sky Capital, WRF Capital, Tsingyuan Ventures and In-Q-Tel.
Exits
Farmer’s Business Network Inc., an ag tech platform and farmer-to-farmer network, acquired Professional Ag Distribution Inc., a specialty fertilizer manufacturer and retailer for the horticulture and specialty markets. Terms weren’t disclosed. San Carlos, Calif.-based FBN is backed by investors including Temasek, T. Rowe Price Group, DBL Partners, Kleiner Perkins and GV.
Privacy, security and third-party risk technology platform OneTrust will expand its automated data redaction capabilities with the purchase of DocuVision Inc. and its Redacted.ai service. OneTrust, based in Atlanta and London, raised a $300 million Series C round in December at a $5.1 billion valuation from investors including TCV, Insight Partners and Coatue. Founded in 2019, DocuVision was backed by UC Berkeley SkyDeck, Oxford Angel Fund and Oxford Seed Fund.
IPO Tracking
ACV Auctions Inc., which operates a marketplace for wholesale vehicle transactions, detailed plans for an initial public offering, according to Dow Jones Newswires. Stockholders in the Buffalo, N.Y.-based company, which previously filed confidentially for an IPO, include Bessemer Venture Partners, Tribeca Venture Partners, SoftBank Group Corp. and Armory Square Ventures. According to the filing, ACV Auctions sold $160 million in Series E convertible preferred stock in late 2019.
|
|
|
|
Vestiaire Collective, a Paris-based second-hand fashion platform, closed a new €178 million ($215 million) round of funding from Kering, Tiger Global Management, Bpifrance, Condé Nast, Eurazeo Group, certain funds managed by Fidelity International, Korelya Capital, Luxury Tech Fund and Vitruvian Partners.
Skydio Inc., a Redwood City, Calif.-based drone manufacturer, secured $170 million in Series D financing, giving the company a valuation of over $1 billion. Andreessen Horowitz led the round, which included support from new investor UP.Partners, along with existing backers Linse Capital, Next47 and IVP.
FogPharma, a Cambridge, Mass.-based startup developing new drugs for cancer treatment known as miniproteins, picked up a $107 million Series C investment led by venBio Partners. New investors Cormorant Asset Management, Farallon Capital Management, Invus, funds and accounts advised by T. Rowe Price Associates Inc., HBM Healthcare Investments, Casdin Capital and PagsGroup also participated in the round, alongside previous backers GV, 6 Dimensions Capital, Deerfield Management and Blue Pool Capital. Corey Goodman, managing partner of venBio Partners, has joined the FogPharma board as chairman.
Tenaya Therapeutics, a South San Francisco, Calif.-based developer of therapies that address the underlying causes of heart disease, landed $106 million in Series C funding led by RTW Investments. Existing backers Column Group, Casdin Capital and GV also contributed to the round, in addition to new investors RA Capital Management, Fidelity Management & Research Co. and funds and accounts advised by T. Rowe Price Associates Inc.
Axonius Inc., a New York-based cybersecurity asset management platform, raised $100 million in Series D funding at a valuation of more than $1 billion. Stripes led the round, which included participation from Bessemer Venture Partners, OpenView, Lightspeed Venture Partners and Vertex. Ken Fox, founder and partner at Stripes, will join the company’s board.
DTx Pharma Inc., a San Diego startup creating novel RNA-based therapeutics to treat the genetic drivers of disease, closed a $100 million Series B round led by RA Capital Management. Returning backers Friedman Bioventure Fund, Eli Lilly & Co., Viva BioInnovator and ExSight Ventures also contributed to the round, along with new investors Access Biotechnology, Surveyor Capital, Cormorant Asset Management, Janus Henderson Investors and Logos Capital. RA Capital’s Matthew Hammond and Access Biotechnology’s Dan Becker will join the company’s board.
Beam Dental, a Columbus, Ohio-based dental insurance startup, raised $80 million in Series E funding led by Mercato Partners’ growth equity fund, Traverse. Drive Capital, Georgian, Nationwide and Breakout Capital also participated in the round.
Dream Games, an Istanbul-based mobile gaming startup, snagged $50 million in Series A funding. Index Ventures led the round, with participation from Balderton Capital and Makers Fund.
Oxular Ltd., a U.K.-based startup working on a treatment for diabetic macular edema, secured a $37 million investment. Forbion led the funding, with Principal Dmitrij Hristodorov joining the company’s board.
SalioGen Therapeutics, a Burlington, Mass.-based gene therapy startup, closed a $20 million Series A round led by PBM Capital. Sean Stalfort, president of PBM, will join the board.
Gitai Japan Inc., a developer of robots for use in space, grabbed a ¥1.8 billion ($17.1 million) Series B round from Space Frontier Fund, DCI Venture Growth Fund, Dai-ichi Life Insurance Co. and EP-GB.
Mobility Capital Finance, a New York- and Newark, N.J.-based mobile-first banking platform for financially underserved communities, scored $12 million in Series A funding. Tom and Wende Hutton led the investment, which saw additional support from Citi Impact Fund, Mastercard, 1Flourish Capital, Commerce Ventures, Radicle Impact, Portfolia America Rising Fund and the Partnership Fund for New York City. Mr. Hutton will join the company’s board.
Rollick Inc., an Austin, Texas- and St. Louis-based startup that connects manufacturers, dealers, and finance and insurance providers with consumers in the powersports, RV and marine industries, nabbed $8.5 million in funding. Investors included Sandbox Insurtech Ventures, TechNexus Venture Collaborative, Dallas Venture Capital, Alumni Ventures, London Technology Club, LiveOak Venture Partners, Silverton Partners, Autotech Ventures, ManchesterStory, Anthem Venture Partners and Capital Factory.
|
|
|
|
A teacher in San Francisco used Zoom to instruct her students remotely in October. PHOTO: DAVID PAUL MORRIS/BLOOMBERG NEWS
|
|
|
|
|
|
|
|
|