A virtuous cycle of investments and returns for traders has turbocharged this rapidly changing asset class. Venture-backed companies have attracted $145 billion in 2021, more than 90% of last year's record total. The frenetic pace of mega-deals of $100 million or more have already hit a new high-water mark. Firm-level fundraising is also taking off, with investors closing vehicles worth a total of $75 billion, about 92% of 2020's record-breaking amount. IPOs and SPACs helped drive the exit value of venture-backed companies to $375 billion in the first half of 2021. That was 25% higher than 2020's all-time record for venture backed businesses.
Nontraditional investors, in particular private equity firms and hedge funds, are making their presence felt more than ever. With them comes deal competition, capital galore and high expectations for growth. These investment firms and funds like Blackrock are gobbling up real estate properties including entry level homes, along with vast cryptocurrency holdings such as Bitcoin, in many cases. This comes even in the shadow of a shortage of workers and a somehow simultaneous slumping of salaries for employees.
The Securities and Exchange Commission (SEC) continues to ramp up its scrutiny of SPACs (special purpose acquisition companies), most recently taking aim at a blank-check deal for space startup Momentus. Momentus, its CEO and blank-check sponsors misled public investors about both the company's technologies and the national security risks posed by its Russian founder, the SEC said.
This is the first time the SEC has charged a SPAC with wrongdoing, although it has probed blank-check deals with other companies including electric car makers Lordstown Motors and Canoo. SEC Chairman Gary Gensler expressed concerns that the SPAC compensation structures may encourage sponsors to sidestep due diligence in order to get a deal done.
Aurora, a self-driving vehicle company, has agreed to go public via a merger with Reinvent Technology Partners Y, a SPAC led by LinkedIn co-founder Reid Hoffman and Zynga founder Mark Pincus, at an implied valuation of $13 billion. Aurora is expected to raise $2 billion from the deal, including cash held in Reinvent's trust and a $1 billion PIPE coming from Baillie Gifford, Fidelity Management & Research, T. Rowe Price, Canada Pension Plan Investment Board and others. Since its founding in 2017, Aurora has raised $1.22 billion in private capital, including a $400 million investment from Uber, which was paired with Aurora's acquisition of Uber's self-driving vehicle unit in exchange for giving the ride sharing giant a stake in Aurora. Reinvent Technology has formed three blank-check companies. The first two have announced mergers with air taxi specialist Joby Aviation and Hippo, an insurtech company. Aurora's merger with Reinvent's third SPAC stands out because Hoffman has a prior relationship with the autonomous vehicle company. He joined Aurora's board in 2018, when Greylock Partners, where he is a partner, invested in the company's $90 million Series A. This is one of the first SPAC deals where an investor is involved on both sides of the transaction, which is allowed by regulators under certain conditions.
The success of alternative meat products developed by companies like Beyond Meat, as well as early regulatory approval, has helped drive a wave of investment in the cultivated protein industry. Despite this enthusiasm, the industry remains nascent and largely pre-revenue, with several growth challenges ahead, including the need for clear regulatory frameworks, more commercially viable products and scalable technologies. Our latest analyst note offers an in-depth look at how cultivated meat is made and recent factors influencing startup opportunities in the emerging industry. Key takeaways include: VC deal count in cultivated protein startups nearly tripled in 2018, coinciding with the announcements of commercialization timelines by providers like Eat Just and Mosa Meat. Deal activity and funding have steadily climbed from $25 million invested in one deal during 2012 to nearly $303 million invested across 33 deals in 2020. The lack of a path to regulatory approval is a significant commercialization roadblock. In the US, the FDA and the US Department of Agriculture appear to be early in the process of setting up regulatory frameworks. Combining cultivated and plant-based proteins into a hybrid product is increasingly being pursued as a solution to reduce cost and scale and improve taste and texture.
H&F wraps year's biggest PE fund with $24.4B Hellman & Friedman has closed its 10th namesake fund on $24.4 billion, marking the largest private equity fund so far this year and the fourth-largest of all time, according to PitchBook data. San Francisco-based H&F is the biggest investor in the vehicle, with commitments of $1.8 billion. The firm targets companies in sectors including software, technology, financial services, healthcare and retail. The fund is H&F's largest-ever vehicle, and the industry's largest this year by billions of dollars, beating out Silver Lake's sixth technology-focused fund, which closed on $20 billion in January. It's also the fourth-largest PE fund in history, behind Blackstone's Capital Partners VIII, which brought in $26 billion in 2019, CVC Capital Partners' eighth flagship buyout fund, which secured €21.3 billion (around $25.1 billion) in July 2020, and Apollo Global Management's Investment Fund IX, which closed at $24.6 billion in 2017.
Revolut has become the UK's most valuable VC-backed company, as a boom in dealmaking drives a surge in late-stage valuations across Europe. The challenger bank raised $800 million for its Series E, led by SoftBank and Tiger Global, and is now worth $33 billion—six times the $5.5 billion valuation it reached last year. Europe's venture-backed companies have seen their funding options expand of late, with foreign and nontraditional investors being increasingly willing to provide more capital. The spike in both deal size and count is pushing valuations to record heights—and fueling major growth for the continent's fintech giants. read more
Over the years, ESG (environmental, social, and governance) standards have been set by an alphabet soup of industry groups. With the shift toward better reporting on sustainability, fund managers are being expected to prove their credentials with growing frequency. As LPs increasingly prioritize responsible investment, many fund managers are finding that simply having an ESG policy is not enough if its impact on a portfolio is not demonstrable. Mergers, like that of the Sustainability Accounting Standards Board and the International Integrated Reporting Council, are helping consolidate efforts for consistent measurements. However, ethical investing is hard to quantify—meaning those who seek to establish a globally accepted standard likely have a long way to go.
A target company's management team expects to be fully vetted as part of the due-diligence process. And investors who follow strict protocols on this important risk-management measure have stellar reputations: They take their deals seriously, believe in the importance of partnering with management and suffer no fools. A comprehensive background investigation is a qualitative endeavor requiring multiple ingredients to formulate a thorough review on which investors can rely, and not just a bunch of social media hype on unicorns or HODLing hacks.
Corporate Resolutions offers experience, intelligence, access and resourcefulness for investors. Without each of these components, the information can be erroneous, misleading or give a false sense of security. In a competitive deal environment, it is increasingly important to have a trusted due-diligence partner who can quickly assess opportunities and highlight key risks before writing a check.
Don't knock franchises from your investment options either just because it's not new or glamorous. Franchising paves the way for franchisees to make a smooth transition to CEO proven systems with in-depth virtual and in person training, on-going support with webinars, annual conventions industry, and brand specific mentors bank approved financing. That means franchisees have a lot of self-interest to grow themselves and their companies, whether it's CBD oils or cyber security, and boost your investment ROI in the process!
Digital is coming for private equity and venture capital. Digital is coming for private equity and venture capital, the same way it's coming for every industry on the planet. We sat down with thought leaders from across the industry to discuss the current state of private equity/venture capital, the potential digital transformation presents and what the winners/future landscape might look like. In this webinar, you'll take away a clear sense of macro trends in digital transformation and actionable ideas to implement at your firm to establish a more modern, tech-driven operating model.
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The anonymous bidder who pledged $28M for a seat on Jeff Bezos' Blue Origin flight can no longer travel to space due to "scheduling conflicts." Now, an 18-year-old son of a rich investor will become the youngest person in space after his dad snagged the ticket as a gift. You can't make this stuff up.
The VC game, cryptocurrency trading, forex trades, stock market, and retail investing are both changing drastically in 2021 and into 2022. Check back soon on the Social Selling Entrepreneur Blog to learn more about new updates in the world of finance and high ROI investing!
