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By Yuliya Chernova, WSJ Pro
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Good day. Venture firms are hungry. Firms like Andreessen Horowitz are raising larger funds on shorter timelines, as WSJ Pro reported this week. The ballooning venture-fund market also affords a greater opportunity for the limited-partner universe to expand.
The median number of limited partners per fund more than doubled over the past five years, according to a recent analysis by advisory firm Different Funds, part of Assure Services Inc. The trend benefited the mega funds most. Funds $500 million or greater in size saw the biggest jump in the number of LPs since 2016, per the analysis.
While the typical check size written by LPs was steady for several years, it rose last year and has remained elevated in 2021.
“VCs are taking bigger checks than ever from more LPs than ever,” the Different Funds report concluded. That helps explain how the venture-fund market has been growing.
Venture funds in the U.S. raised $96 billion through the third quarter of this year, up from $85.8 billion in all of 2020, according to the latest PitchBook-NVCA Venture Monitor report. The total is likely to increase by year-end, as more funds are in the market.
New entrants introduce some risk to the market, the Different Funds report said, such as that they may be more fickle should return expectations not be met. When funds are raised quickly one after another, LPs face the additional risk of a lack of time diversification, said Aakar Vachhani, a partner at Fairview Capital.
For now, though, interest in the venture asset class is at a high and venture firms are quick to capitalize on it.
And now on to the news...
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FaZe Clan is known for its esports teams and online brand that is popular among young people. PHOTO: JASEN VINLOVE/REUTERS
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SPAC deal. Youth-focused online platform FaZe Clan Inc. is combining with a special-purpose acquisition company to go public with a roughly $1 billion valuation, the companies said, WSJ reports.
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Based in Los Angeles, FaZe Clan markets itself as a leading online-gaming company and a brand created by young people that targets millennials and Gen Z consumers. Its business includes esports, merchandise and digital content. The company’s website says FaZe Clan has a global reach to a community of roughly 350 million people across its social-media platforms.
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The company is merging with the SPAC B. Riley Principal 150 Merger Corp., a blank-check company backed by B. Riley Financial Inc. The Wall Street Journal previously reported the two sides were nearing an agreement. Shares of the SPAC rose 15% to $11.19 Monday.
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21%
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AI start-ups attracted 21% of all VC investments in 2020, up from just 3% in 2012, according to a report from the Organization for Economic Cooperation and Development
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Silver Lake Heads Back to Market As Tech Fundraising Swells
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Technology-focused private-equity investor Silver Lake is heading back to the fundraising trail less than a year after announcing it had amassed $20 billion for its previous flagship vehicle, WSJ Pro reports. The firm has opened a virtual data room for its next flagship fund, according to several people familiar with the matter. Private-equity firms often use virtual data rooms to allow investors to access documents they may need to conduct due diligence on new fundraising efforts. The firm has yet to communicate to investors a formal target specifying how much it plans to raise for the fund, the people said, but they added that they expect it to match, if not exceed, the size of the firm’s previous
main fund.
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Francisco Partners Targets $2 Billion for New Fund Focused on Smaller Tech Deals
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Private-equity firm Francisco Partners is targeting $2 billion for its third Agility fund, which will focus on smaller deals than the technology-focused firm’s main vehicles, according to people familiar with the matter, WSJ Pro reports. If Francisco Partners reaches its goal for the new fund it would be over 33% larger than its predecessor Agility fund, which closed with $1.5 billion last year. The San Francisco-based firm’s maiden Agility fund collected $600 million in 2016. Francisco Partners earmarked its first Agility fund for investments of less than $50 million, according to a press release issued when it closed, and last year the firm said its second Agility fund would target investments of
less than $125 million in 13 to 15 companies.
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Experience Management Forum
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If you’re interested in fintech and customer experience, come along to the WSJ Experience Management Forum on Nov. 1. Speakers include executives from two venture-backed companies: Ronald Oliveira, U.S. chief executive of Revolut and David Sandstrom, chief marketing officer of Klarna. Register here using the code EXPREPORT
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Funds
European climate-tech investor World Fund launched a €350 million ($406 million) fund. Incubated by not-for-profit search engine Ecosia, the fund will focus on technology that can reduce carbon emissions across sectors including energy, transportation, food and agriculture, manufacturing and buildings.
White Star Capital raised $360 million for its third flagship fund, which closed at $60 million beyond its original target. The new fund will invest between $5 million and $15 million in 15 to 20 startups focusing on sectors including artificial intelligence, digital health, fintech, foodtech, future of work, industrial technologies, mobility and wellbeing across North America, Europe and Asia. Fund III has so far backed finn.auto, Percent, Flash Coffee, Novisto, 900.care and Numan. White Star secured $180 million in 2018 for its second flagship fund.
Promus Ventures closed its Orbital Ventures fund with €120 million ($139 million) to invest in early-stage, space-related companies. Since its first close in January 2020, the fund has invested in companies including Isotropic Systems, Ellipsis Drive, Fernride, Akasha Imaging, Recycleye and Wakeo. Promus Ventures has offices in Chicago, San Francisco and Luxembourg.
Asymmetric Capital Partners, a new Boston-based firm, closed its oversubscribed inaugural fund at $105 million. The new vehicle will primarily make seed to Series C investments in business-to-business technology companies focused on digitization of legacy industries, next-generation software and business tooling, marketplaces, and future of work, retail and healthcare.
People
Customer lifecycle management platform CleverTap appointed Vikrant Chowdhary as the company’s first chief growth officer. Mr. Chowdhary joins CleverTap from Salesforce, where he directed India's finserv vertical and enterprise business units. Mountain View, Calif.-based CleverTap is backed by Sequoia India, Tiger Global Management and Accel.
Exits
Cameo, which enables celebrities to sell personalized videos and messages to fans, acquired Represent, a marketing and merchandising platform, for an undisclosed amount. In March, Cameo said it raised $100 million in funding from investors including e.ventures, SoftBank Vision Fund 2 and GV.
AlphaSense Inc., a developer of advanced search tools for parsing financial data, purchased Stream by Mosaic, provider of a library of expert interview transcripts, for an undisclosed sum. New York-based AlphaSense recently raised a $180 million Series C round led by Viking Global Investors and the growth-equity business within Goldman Sachs Asset Management.
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Thrasio Holdings Inc., an acquirer of Amazon FBA brands, grabbed more than $1 billion in Series D financing. Led by Silver Lake, the round included contributions from Advent International, Upper90, funds managed by Oaktree Capital Management, PEAK6 Investments and Corner Capital.
Groww, an Indian fintech platform, secured $251 million in Series E funding at a valuation of $3 billion. Iconiq Growth led the investment, which included contributions from Lone Pine Capital, Sequoia Capital, Ribbit Capital, Y Combinator Continuity, Tiger Global Management and Propel Venture Partners.
Fabric, a New York-based on-demand fulfillment startup, closed a $200 million Series C round at a valuation of more than $1 billion. Temasek led the investment, which included participation from Koch Disruptive Technologies, Union Tech Ventures, Pontifax AgTech, CPP Investments, Princeville Capital and others.
TIER Mobility, a Berlin-based e-scooter provider, nabbed a $200 million Series D round, valuing the company at $2 billion. Led by SoftBank Vision Fund 2 and Mubadala Capital, the round included participation from M&G Investments, Mountain Partners, RTP Global, Novator Partners, White Star Capital, Northzone and Speedinvest.
Ajaib, an Indonesian fintech that lets people buy and sell shares and mutual funds, scored $153 million in Series B funding. DST Global led the round, which included support from Ribbit Capital, Horizons Ventures, Iconiq Capital, IVP, Insignia Ventures, Alpha JWC Ventures and SoftBank Ventures Asia.
GrubMarket, a San Francisco-based online food marketplace, snagged a $145 million oversubscribed Series E round from funds and accounts managed by BlackRock, Japan Post Capital, Walleye Capital, Celtic House Asia Partners, INP Capital, Pegasus Tech Ventures, Gaingels and others. The new funding values the company at over $1 billion.
Billie, a Berlin-based buy now, pay later startup, raised $100 million in Series C funding led by Dawn Capital, giving the company a $640 million valuation. New investors Klarna and Tencent also participated in the round, alongside existing backers Creandum, Speedinvest, Picus Capital and Global Founders Capital.
Teachmint, an India-based education infrastructure startup, landed $78 million in Series B financing led by Rocketship.vc and Vulcan Capital. New investors Goodwater Capital and Epiq Capital also participated in the round, along with previous backers Learn Capital, CM Ventures, Lightspeed India Partners and Better Capital.
Clear, an Indian fintech software-as-a-service company, fetched $75 million in Series C funding from Kora Capital, Stripe, Alua Capital, Think Investments and others.
Bespoke Post, a New York-based startup that delivers curated goods and guidance through a monthly membership and e-commerce shop, collected $40 million in Series B funding led by NewSpring Capital.
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Hertz said that, starting in early November and expanding through the end of the year, customers will be able to rent a Tesla Model 3 at airports and other locations in major U.S. markets and some cities in Europe. PHOTO: CINDY ORD/GETTY IMAGES
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Orlando’s women-led startups lag other Florida markets in VC funding (Orlando Inno)
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