|
Venture Investing Active Amid Pandemic, Led by Growth Deals; Medly Health Grabs $100 Million for Digital Pharmacy
|
|
By Yuliya Chernova, WSJ Pro
|
|
|
|
|
Good day. Late-stage investors are shrugging off the pandemic.
U.S. companies raised $24.6 billion in the second quarter through late-stage financings, the highest total since the record in this segment of the market set in the fourth quarter of 2018, according to PitchBook Data Inc.
In addition, late-stage rounds represented 32% of all deals in the second quarter, the highest proportion in all quarterly stretches going back a decade, the data provider showed.
“We’ve seen the strongest rebound on the growth side,” said Kyle Lui, partner at global venture firm DCM, speaking about both valuations and swiftness of deals during the pandemic. A consumer startup in DCM's portfolio recently breezed through a growth round in two weeks, he said, a pace comparable to last year’s.
Some in the market tie the strength in growth rounds to the surprisingly robust initial public offerings of some venture-backed companies like Lemonade Inc. in late June and early July. But Eric Liaw, general partner at growth firm IVP, says there’s probably no causation there. Many of the growth rounds in the past quarter were in the works before the IPO market opened up, he noted.
Instead, the cause for robust private deals for “IPO-scale” companies lies in the decisions by boards to postpone IPOs and turn to private financings, he said. “To the extent agreeable terms were available, companies and private investors proceeded ahead,” Mr. Liaw said.
And now on to the news...
|
|
|
|
|
CREDIT: MEDLY HEALTH INC.
|
|
|
Digital pharmacy. Venture capitalists have invested $100 million to fuel expansion for Medly Health Inc., a digital-pharmacy startup that has grown quickly since its formation in 2017, WSJ Pro’s Brian Gormley reports.
-
New York-based Medly operates physical pharmacies in New York, New Jersey and elsewhere and also makes free, same-day medication deliveries. Its annualized revenue is in the $200 million range, according to CEO Marg Patel.
-
Medly faces competition from companies such as Walgreens Boots Alliance Inc. and Amazon.com Inc., which in 2018 acquired venture-backed PillPack Inc., a company that delivers presorted medications to patients.
-
Medly, which deals with insurance preauthorizations and seeks to ensure patients have the lowest copay possible, aims to compete with larger companies by offering a high level of customer service.
|
|
$56.7 Billion
|
Amount of venture capital raised by startups in North America in the first half of the year, which was 4% less than in the year-ago period, Preqin reported.
|
|
|
Funding strong. The global venture market blew past fears over the coronavirus pandemic and a world-wide recession to stay robust through the first half of the year, WSJ Pro's Yuliya Chernova reports.
-
Private companies around the world raised $112 billion in venture capital through 6,379 deals in the first six months of 2020, according to data provider Preqin. The dollar total was down 2% from the first half of last year.
-
The number of venture deals around the globe dropped 20% in the first half of 2020 compared with the year-earlier period, Preqin data showed. This decline continues a downward trajectory that started several years ago.
-
“As the pandemic has gone on, there seems to be rising deal activity and the levels both in pace and price now feel at or more than pre-Covid,” said Rebecca Kaden of Union Square Ventures, speaking about the U.S. venture market.
|
|
Blank-check boom. Fallout from the coronavirus has fueled a fresh wave of interest in an unusual investment vehicle with a shaky reputation: the blank-check company, the Journal reports. Buzzy startups such as electric-truck maker Nikola Corp. and sports-betting operator DraftKings Inc. used blank-check deals to go public this year. On Sunday, health-care-services provider MultiPlan Inc. said it was merging with a blank-check company in an $11 billion deal that would be one of the largest such transactions ever, and on Monday, electric-car maker Fisker Inc. said it too would go public through a blank-check deal. A growing number of
prominent executives have been launching blank-check companies in hopes of finding a hot acquisition target. The latest is hedge-fund billionaire William Ackman. The $4 billion IPO of his Pershing Square Tontine Holdings Ltd., expected this week, is set to be the largest IPO of a special-purpose acquisition company, or SPAC, in history.
|
|
Enterprise deal. Hewlett Packard Enterprise Co. said it agreed to purchase networking company Silver Peak for about $925 million in cash, the Journal reports. Silver Peak is a provider of so-called software-defined wide-area network technology, helping companies operate cloud-based computing applications and services via broadband internet connections, according to its website. HPE said Monday it would combine the company with its Aruba business, which provides networking products and services, including routers, sensors, software products and related services.
|
|
|
|
|
Funds
TrueBridge Capital Partners closed its sixth venture-capital fund-of-funds with $600 million in commitments, surpassing its previous fund of $450 million. Limited partners in TrueBridge Capital Partners Fund VI LP included foundations and endowments, pension funds, family offices and high-net-worth individuals. Founded in 2007, the Chapel Hill, N.C.-based firm invests in venture funds focused primarily on early-stage IT, and also makes direct investments.
National Bank of Canada and the Quebec government launched a fund to help support Quebec's economic recovery following the Covid-19 pandemic and the digital transformation of small businesses. National Bank SME Growth Fund LP hopes to raise up to $200 million.
MatterScale Ventures seeks to raise $60 million for its first fund, according to a regulatory filing. The firm will make early-stage investments in startups that have a presence in the U.S. and Latin America from offices in San Francisco, Detroit, Mexico City, Buenos Aires and Bogota.
People
Bessemer Venture Partners promoted Trevor Neff to vice president. Before joining the firm, he was at Spectrum Equity. Mr. Neff currently serves on the boards of Restaurant365 and Beyond Pricing.
Exits
Recruiting software developer Jobvite Inc. acquired the artificial-intelligence and data-science team at Predictive Partner. Morgan Llewellyn, chief executive of Predictive, will serve as Jobvite’s chief data scientist. San Mateo, Calif.-based Jobvite is backed by K1 Investment Management, Trident Capital and Catalyst Investors.
|
|
|
|
UiPath, a New York-based robotic process automation company, secured $225 million in Series E funding at a valuation of $10.2 billion. Alkeon Capital Management led the round, with participation from Accel, Coatue, Dragoneer, IVP, Madrona Venture Group, Sequoia Capital, Tencent, Tiger Global, Wellington Management, and funds and accounts advised by T. Rowe Price Associates Inc.
Skydio Inc., a Redwood City, Calif.-based drone manufacturer, raised $100 million in Series C funding led by Next47. New investors Levitate Capital and NTT Docomo Ventures also participated in the round, along with existing backers Andreessen Horowitz, IVP and Playground.
Citrine Medicine, a startup developing rare disease-focused therapeutics for the Chinese market, picked up $80 million in Series A financing. Quan Capital led the round, and was joined by 3H Health Investment, WU Capital and others.
Warren, a Brazilian digital brokerage startup, landed a 120 million-Brazilian-real ($22.4 million) Series B investment led by QED Investors. Previous backers Kaszek Ventures, Chromo Invest and Ribbit Capital also contributed to the round, along with new investors MeLi, WPA and Quartz.
Paige.AI Inc., a New York-based provider of tools for the diagnosis and treatment of cancer, added $15 million in Series B funding from Goldman Sachs Merchant Banking Division, bringing the round total to $70 million. Healthcare Venture Partners and Breyer Capital participated in earlier tranches.
Liteboxer, a Boston at-home boxing-based fitness platform, was seeded with a $4 million investment. Will Ventures led the round, which included participation from Raptor Capital and Camros Capital.
|
|
|
|
Maxim’s semiconductors are used in a variety of settings. PHOTO: BRENT LEWIN/BLOOMBERG NEWS
|
|
|
|
|
|
|
|