Good day. Debut fund managers are gaining more confidence and
striking out to raise funds, as WSJ Pro recently reported. But
what's their likelihood of success?
Fairview Capital, which invests in venture funds, analyzed a
pipeline of debut venture funds owned by women or minority managers
who were raising between 2014 and 2017. It found that overall 87%
of the funds raised capital. But many didn't raise as much as they
set out to. The median fund aimed for $75 million but closed at 44%
below target, according to Aakar Vachhani, a partner at
Fairview.
There were also differences within the diverse-fund data set
based on gender. While 90% of male-led firms closed a first-time
fund, 77% of women-led firms did so.
More than a third of all diverse first-time fund managers didn't
go on to raise a second fund, Mr. Vachhani said, adding some joined
other firms or gave up on venture capital.
These are heady days for some venture firms. WSJ Pro reported
that Lee Fixel's Addition, for example, is out raising its third
fund, having already closed on two $1.3 billion funds since last
year. That's par for the course in today's market where the big
firms are getting bigger, and where smaller efforts by less-proven
names are finding it difficult to gain attention from limited
partners.
"While not everyone is cut out to be a VC and many might
underestimate the challenges, I do think the imbalance in success
rates likely discourages some really talented diverse professionals
from making a difference in the industry long term," Mr. Vachhani
said.
And now on to the news...
Top News
Leveling the playing field. In today's frenetic housing market,
buyers who take out mortgages are struggling to compete with those
putting up all cash. Cash offers are more attractive because there
is less chance the deal will fall through or be delayed due to
financing issues. Now, a number of startups are offering programs
to help level the playing field, The Wall Street Journal's Nicole
Friedman reports.
Some of these companies front buyers the cash to buy their homes
outright, while others buy houses directly on a buyer's behalf and
then sell them to the buyer. The programs often target homeowners
who need to buy a house before selling their current one.
Startups with cash-offer programs are expanding quickly.
Companies like Ribbon, HomeLight Inc. and Orchard announced new
funding rounds this month. Knock said this spring it is exploring
plans to go public. Opendoor Technologies Inc., a house-flipping
company that went public in late 2020, launched a cash-offer
program in March. Real-estate brokerage Redfin Corp. is piloting a
cash-offer program in some markets, a spokeswoman said.
86
The number of software companies that have gone public in the
U.S. market so far this year, according to Dealogic, compared with
57 during all of 2020. (WSJ)
Freshworks Shouldn't Spoil on Delivery
Freshworks won't have the initial public offering world to
itself this week, but the cloud-software company is appetizing
enough to stand out in a crowded pack, WSJ's Dan Gallagher writes.
Thirteen companies are slated to make their debuts this week,
according to IPO Boutique. The largest of those will be Freshworks,
which makes a suite of cloud-based software services aimed
primarily at small and midsize businesses. The company will sell
about $969 million worth of shares at the top end of its recently
raised price range. That would land Freshworks a market value of
around $9.7 billion.
Digital Freight Startup Transfix Going Public in SPAC Deal
Transfix Inc. plans to go public through a merger with a
special-purpose acquisition company valuing the digital freight
startup at $1.1 billion, the latest deal shaking up the middleman
freight brokerage business, WSJ's Jennifer Smith reports. The
blank-check merger with G Squared Ascend I Inc. would allow New
York-based Transfix, which competes with bigger rivals including
Uber Technologies Inc.'s Uber Freight business, to tap public
markets for backing to expand its business of using technology to
connect shippers with truckers and to expand development of
additional services, such as transportation management software,
company executives said.
Flying Taxi Startups Seek a Quiet Takeoff
If eVTOL aircraft companies are to achieve their commercial
ambition of becoming flying taxis, then first they'll need to
ensure their aircrafts are quiet enough to work in cities without
disturbing residents. WSJ's George Downs looks into just how quiet
these crafts need to be to take off.
Industry News
Funds
Blumberg Capital raised $225 million for its fifth fund to
continue investing in big data and artificial intelligence. The San
Francisco- and Tel Aviv-based firm recently participated in a $30
million funding round for cybersecurity platform Hunters. Blumberg
Capital closed its fourth fund in 2017 with $206 million.
Fifth Wall, which invests in property technology, climate
technology and retail, has raised more than $140 million toward its
Climate Tech Fund. Investors in the vehicle, which has a $500
million target, to date include Equity Residential, Hudson Pacific
Properties, Invitation Homes, Ivanhoé Cambridge and Kimco Realty
Corp. So far, the new fund has backed ICON, Sealed and Turntide
Technologies. Fifth Wall also said Peter Gajdoš joined the firm as
a partner, where he will co-lead the climate tech investment team.
He was most recently at IPM Group and Presidio Partners.
People
Accel named Sagar Sanghvi to the firm's investment team. He was
previously chief financial officer of Instacart.
Exits
Genomics company Pacific Biosciences of California Inc. acquired
DNA sequencing startup Omniome Inc. for approximately $316 million
in cash and 9.4 million shares of Pacific Biosciences common stock.
San Diego-based Omniome was backed by Madrone Capital Partners,
ARCH Venture Partners, Domain Associates and others.
Publicly traded F5 agreed to acquire Threat Stack Inc., a
provider of cloud security and workload protection, for $68
million. Boston-based Threat Stack is backed by investors including
F-Prime Capital, Eight Roads, Scale Venture Partners, .406 Ventures
and Accomplice.
New Money
Fivetran, an Oakland, Calif.-based provider of automated data
integration technology, scored $565 million in Series D funding led
by Andreessen Horowitz, giving the company a valuation of $5.6
billion. Previous backers including General Catalyst, CEAS
Investments and Matrix Partners also joined in the round, along
with new investors Iconiq Capital, D1 Capital Partners and Y
Combinator Continuity. In addition to the new investment, Fivetran
agreed to acquire HVR, a provider of enterprise data replication
technology, in a cash and stock deal valued at $700 million.
SmartLabs, a Boston-based startup offering flexible lab and
office spaces for research groups, raised $250 million in Series B
funding led by ArrowMark Partners. New investors Winslow Capital
Management and Onex Falcon also participated in the round, along
with existing backers ArrowMark Partners, Conversion Venture
Capital and Breed's Hill Capital.
Airwallex, an Australian cross-border payments startup, secured
$200 million in an oversubscribed Series E round led by Lone Pine
Capital, increasing the company's valuation to $4 billion. New
investors G Squared and Vetamer Capital also contributed to the new
funding, alongside previous backers 1835i, DST Global, Salesforce
Ventures and Sequoia Capital China.
Blueground, a New York-based startup offering a network of
furnished apartments for monthly or yearly leases, picked up $180
million in Series C funding, consisting of $140 million in equity
and $40 million in debt. WestCap Group led the equity portion,
which included participation from Geolo Capital, VentureFriends and
Prime Ventures. Silicon Valley Bank provided the debt. Tom
Gottlieb, co-founder and managing general partner of Geolo Capital,
will join the company's board.
Lightricks, a Jerusalem- and New York-based creator of photo and
video editing apps, landed $130 million in Series D financing,
bringing the company's valuation up to $1.8 billion. Insight
Partners and Hanaco Venture Capital led the round, which included
additional support from Goldman Sachs Asset Management, ClalTech,
Greycroft and Shavit Capital.
Saviynt, an El Segundo, Calif.-based cloud identity and access
governance platform, closed a $130 million investment from HPS
Investment Partners and PNC Bank.
GOOD Meat, a division of Eat Just Inc. that produces meat made
from animal cells, added $97 million in new funding, bringing the
round total to $267 million. Investors including UBS O'Connor,
Graphene Ventures, K3 Ventures, Resilience Reserve and others
provided the financing. Jim Borel, former executive vice president
of DuPont, will join the company's board.
ClickHouse Inc., creator of an online analytical processing
database management system, secured $50 million in Series A
financing led by Index Ventures and Benchmark.
FloBiz, an India-based neobank for small- and medium-size
businesses, fetched $31 million in Series B funding led by Sequoia
Capital India, Think Investments, Elevation Capital and
Beenext.
Propel, a Santa Clara, Calif.-based startup whose technology
helps manufacturers deliver customer engagement services, nabbed
$20 million in Series C financing. Salesforce Ventures led the
round, which included contributions from Ankona Capital, Norwest
Venture Partners, Cloud Apps Capital Partners and others.
Altana AI, a supply chain artificial intelligence startup,
snagged $15 million in Series A funding. GV led the investment,
which included support from Floating Point, Ridgeline Partners,
Amadeus Capital Partners and Schematic Ventures.
Boom Entertainment, a New York-based creator of sports gaming
apps, raised $15 million in Series A funding led by Sands
Capital.
Near Space Labs, a Brooklyn, N.Y.- and Barcelona-based
geospatial intelligence provider, grabbed $13 million in Series A
funding. Lead investor Crosslink Capital was joined by Toyota
Ventures, Leadout Capital and Wireframe Ventures in the round.
Crosslink Capital Partner Phil Boyer will join the board.
Tech News
Coinbase won't offer lending product questioned by SEC
New research busts popular myths about innovation
TikTok maker caps screen time for youths in China
Twitter to pay $809.5 million to settle securities suit
Google-backed data project aims to quantify benefits of
lower-carbon jet fuel
Around the Web
Tech giants quietly buy up dozens of companies a year. The Biden
administration is finally noticing. (Washington Post)
As investors pivot to seed and growth, who is left leading
Series A? (Crunchbase)
(END) Dow Jones Newswires
September 21, 2021 11:25 ET (15:25 GMT)
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