CLASH OF THE TITANS
It’s not just venture capital firms raising record amounts of capital. Private equity tech giants are also facing off with a slate of new mega-funds.
Vista Equity Partners Management and Thoma Bravo, which are two of the largest technology-focused PE firms, are currently in a race for big dollars. Vista hopes to raise approximately $12 billion for its new buyout fund, while Thoma Bravo is targeting $10 billion, according to The Wall Street Journal.
Why is this important?
Dry powder levels are at record highs. Buyout funds were sitting on an all-time high of $633 billion at the end of 2017. As Bain’s head of private equity recently told Term Sheet, “We’ve got a flat number of deals and an increasing value per deal, so you quickly come to a situation where the industry is becoming much more competitive for each deal that is done. As a result, the prices are at an all-time high.”
So Vista and Thoma Bravo’s latest mega-funds could further inflate prices of tech companies and drive down the firms’ returns. Both Vista and Thoma Bravo are hyper-focused on investing in technology companies and sometimes compete with one another for deals. According to Dealogic, technology has been the most popular sector for PE investors in the last several years, accounting for 20.5%, or $79.5 billion, of all acquisitions globally in 2017.
On a related note, there’s also been an explosion of PE investment in unicorns in the last five years, according to PitchBook data. The deal count has quadrupled and the value of those deals has expanded at an even more extraordinary rate. Buyout firms are investing more than ever in technology companies in an attempt to prove that specializing in software can a viable strategy. Read more.
…As an aside, if you like long-reads, I recommend this profile of Vista Equity Partners founder Robert Smith. It’s a deep dive into Vista’s operating standards, the personality-and-aptitude test requirements, and Smith’s journey to the top.
PEOPLE MOVES: Sarah Smith, a former executive at Facebook and Quora, has joined investment firm Bain Capital Ventures as its first female partner. She will be based in San Francisco and will focus on early-stage investments across business and consumer technologies and marketplaces. Read more at Fortune.
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• OpenClassrooms, a Paris-based online higher education platform, raised $60 million in Series B funding. General Atlantic led the round.
• Parsable, a San Francisco-based provider of a connected worker platform, raised $40 million in Series C funding. Future Fund led the round.
• Plastiq, a San Francisco-based payment solutions provider, raised $27 million in funding. Investors include Atlas Venture, Khosla Ventures and Top Tier Capital Partners.
• Mynd, an Oakland, Calif.-based tech-enabled property management company, raised $20 million in Series B funding. Lightspeed Ventures led the round, and was joined by investors including investors Canaan Partners and Jackson Square Ventures.
• Arevo, a Santa Clara, California-based provider of 3D printing technology and services, raised $12.5 million in Series B funding. Asahi Glass led the round, and was joined by investors including Sumitomo Corporation of Americas, Leslie Ventures and Khosla Ventures.
• Compound, a blockchain technology company, raised $8.2 million in seed funding. Bain Capital Ventures, Andreessen Horowitz and Polychain Capital led the round, and were joined by investors including Transmedia Capital, Compound Ventures, Abstract Ventures, Danhua Capital and Coinbase.
• Tracking First, a Provo, Utah-based enterprise data governance platform, raised $4 million in funding. Silverton Partners led the round, and was joined by investors including Kickstart Seed Fund.
• PetPlate, a Brooklyn-based direct-to-consumer subscription service that delivers fresh-cooked pet meals, raised $4 million in seed funding. Dane Creek Capital led the round, and was joined by investors including Amity Supply, SWAT Equity, The Yard Ventures, Castor Ventures, and BrandProject.
• Student Loan Genius, an Austin-based student loan benefits provider, raised $3.5 million in funding. Vestigo Ventures led the round, and was joined by investors including CMFG Ventures, Prudential Financial and Rubicon Venture Capital.
• CareTaker Medical, a Charlottesville, Virginia-based wireless medical device firm, raised $3.4 million in funding. Investors include IrishAngels and KOFA Healthcare.
• RunSafe Security, a McLean, Virginia-based provider of a patented cyberhardening process for vulnerable embedded systems and devices across critical infrastructure, raised $2.4 million in seed funding. Alsop Louie Partner led the round.
HEALTH AND LIFE SCIENCES DEALS
• HiFiBiO Therapeutics, a Paris-based biotherapeutics company, raised $37.5 million in Series B funding. Sequoia China and LYFE Capital led the round, and were joined by investors including VI Ventures, Nest.Bio Ventures, Legend Star Capital and Proxima Ventures.
• EIP Pharma, a Cambridge, Mass.-based therapeutics company focused on CNS diseases, raised $20.5 million in Series B funding. Access Industries led the round.
PRIVATE EQUITY DEALS
• Blue Wolf Capital acquired a majority stake in TGW, a U.K.-based industrial knife manufacturer. Financial terms weren’t disclosed.
• Maroon Group, which is owned by CI Capital Partners, acquired J. Tech Sales, a Boca Raton, Fla.-based distributor of specialty chemicals and ingredients. Financial terms weren’t disclosed.
• Mecadaq Group, an Activa Capital portfolio company, is buying Hirschler Manufacturing Inc, a Kirkland, Wash.-based producer of high-precision mechanical parts. Financial terms weren’t disclosed.
• Tianqi Lithium will acquire Nutrien’s stake Sociedad Quimica Y Minera (NYSE:SQM), one of the world’s biggest lithium producers, for $4.1 billion.
• PluralSight, a Farmington, Ut.-based cloud-based learning platform, raised $311 in an IPO of 20.7 million shares priced at $15, above its $12 to $14 range. Insight Ventures Partners (53% pre-offering), ICONIQ Strategic Partners (9.3%), and Keith Sparkjoy (7.4%) back the firm. Morgan Stanley, J.P. Morgan, Barclays, BofA Merrill Lynch are underwriters in the deal. The firm plans to list on the Nasdaq as “PS.” Read more.
• Abpro, a Woburn, Mass.-based cancer antibodies biotech, withdrew its $60 million IPO. The firm posted revenue of $2.2 million in 2017. UBS and Wells Fargo were underwriters in the deal. It planned to list on the Nasdaq as “ABP.” Read more.
• Bunge Açúcar & Bioenergia SA, the Brazilian sugar and ethanol subsidiary of Bunge Ltd., filed for an IPO in the country. Read more.
• WeWork is acquiring MissionU, a San Francisco-based one-year vocational bootcamp, according to Axios. Financial terms weren’t disclosed, but the company had raised approximately $11 million in venture funding from investors including FirstMark and First Round Capital. Read more.
• Dialpad acquired TalkIQ, a San Francisco-based provider of real-time speech recognition and natural language processing technologies. Financial terms weren’t disclosed. TalkIQ had raised approximately $14 million in venture funding from investors including Aspect Ventures, Salesforce Ventures, Felicis Ventures, and
• Castik Capital acquired Ipan Group, a Munich-based provider of IP management services and software, to Warburg Pincus. Financial terms weren’t disclosed.
• Resurgens Technology Partners acquired Assurance Software, a Wayne, Penn.-based company that helps businesses develop business continuity programs, from Sungard AS. Financial terms weren’t disclosed.
FIRMS + FUNDS
• Digital Colony, a digital infrastructure-focused investment firm, raised $2.4 billion for its new fund, according to an SEC filing.
• Sorenson Capital promoted Bert Roberts to managing director.
• StepStone Group named six new partners, including Ian Aaker, Rebecca Ajavananda, Kate Budiselik, Tracy Harris, Jay Morgan, and John Waters.
• Vasudev (Vas) Bailey joined ARTIS Ventures as a partner.
• John Kibler joined Brentwood Capital Advisors as a managing director.