VC Daily: Question: What Is Driving Startup Mergers and Acquisitions?

Good day. Last week we asked how the looming crypto regulation is affecting investor calculations in the industry.

David Pakman of venture capital firm Venrock said most crypto investors, including himself, are expecting more regulation from Western authorities. Most of the capital on the sidelines is waiting for regulatory clarity before investing in crypto, he said. “So far, crypto has proven to be an amazingly resilient sector when faced with negative regulatory pressures,” Pakman said. “While I think the likelihood of a very negative regulatory event in the US is not zero, I think the chance that we will get decent crypto regulation here is much greater, which paves the way for more investment and progress in this area paving. ”How aggressive the various governments will be in their respective regulatory approaches remains to be seen, he said.

This week’s question: what is driving the onslaught of mergers and acquisitions of startups? M&A with a technology target hit a record $ 800 billion as of August 11th this year, more than three times the figure for all of last year, according to analyst Refinitiv.

Please email responses to marc.vartabedian@wsj.com.

Note: Due to the Labor Day holiday, there will be no newsletter on Monday. We’ll be back on Tuesday.

And now for the news …

Top news

SPAC sliding. The blank check boom has turned into defeat, reports Amrith Ramkumar of the Wall Street Journal. More than six months after the peak of the SPAC craze, a widespread sell-off has reduced the value of companies that went public through special acquisition firms by about $ 75 billion, according to an analysis by Dow Jones Market Data with numbers from SPAC Research.

A group of 137 SPACs that had completed mergers by mid-February has lost 25% of their total value. At some point last month, the pullback topped $ 100 billion. Not included in the analysis are companies that did not complete any mergers in mid-February or are no longer trading.

Over the same period, a publicly traded fund tracking companies that recently went public through IPOs lost 12%. The Dow Jones Industrial Average rose 13%.

SPAC declines are focused on companies committed to green energy and sustainability, although the damage is widespread.

4.3%

The month-on-month decline in the US trade deficit in July was due to weaker import demand. (WSJ)

Ryan Reynolds’s Ad Shop Parent Taps Marketing Veterinarian Joanne Bradford

Advertising technology company MNTN has named marketing veteran Joanne Bradford to the new role of chief growth officer as the company plans a potential IPO, company executives said, WSJ’s Alexandra Bruell reports. MNTN, formerly known as SteelHouse, uses automated technology to buy streaming TV ad space from media companies that meet certain advertiser criteria. The company tracks campaign performance and is often compensated when customers hit goals like number of app downloads or website visits rather than the more common metric of how many people see the ad.

FAA says Virgin Galactic is unable to fly a spaceship during the investigation

Virgin Galactic Holdings Inc. will not be allowed to conduct space flights until aviation regulators complete an investigation into a previous mission with billionaire Richard Branson, the Federal Aviation Administration said Thursday, WSJ reports. Virgin Galactic said Wednesday the spacecraft called Unity left its planned trajectory for a minute and 41 seconds when it returned to the ground on July 11, which prompted the FAA to investigate what happened. Three Virgin Galactic employees accompanied company founder Mr. Branson on the flight to the edge of space, which attracted a lot of attention. The company said it worked closely with the FAA to assist in a thorough review of the flight and resolve the matter in a timely manner.

Startup that reduces accents in real time attracts start-up capital

A startup whose software can make accented speech sound more American-style in real time received seed funding this week after showing initial success with call centers, reports WSJ Pro. Sanas.ai Inc., based in Palo Alto, California, has raised $ 5.5 million from a group of investors led by Human Capital, an early funder of data warehousing provider Snowflake Inc., among other things. General Catalyst, Quiet Capital and DN Capital also participated in the Sanas financing, which follows a pre-seed round of $ 500,000.

Industry news

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Kansas City-based Flyover Capital Partners, which invests outside the traditional technology hubs of Silicon Valley and the Northeast Corridor, has closed the Flyover Capital Tech Fund II and Flyover Capital Tech Fund II-QP with capital commitments of over $ 60 million exceeding its target of $ 50 million. The new funds will make initial investments in the seed and post-seed phases and will target initial equity investments between $ 500,000 and $ 2 million in rounds between $ 1 million and $ 5 million.

persons

Bee Partners, which invests in sectors such as robotics, artificial intelligence, voice and synthetic biology, said Jocelyne Cooke has joined the company as chief financial officer. She was previously CFO at DCVC.

Telstra Ventures promoted Saad Siddiqui to General Partner and Joseph An to Senior Associate. Mr. Siddiqui joined the company in 2016 and focuses on the corporate infrastructure sector. Previously, he was a senior executive at Informatica and Cisco. Mr. An joined in 2019 and focuses on logistics, fintech and e-commerce. He previously worked at Blue Wolf Capital Partners.

Online real estate investment market CrowdStreet Inc. has named Genni Combes as Chief Financial Officer and Kristen Howell as General Counsel and Chief Compliance Officer. Ms. Combes was most recently CFO at ApplePie Capital. Ms. Howell previously served as general counsel for a registered investment advisor. CrowdStreet, based in Austin, Texas, is backed by investors such as Grotech Ventures, Rally Ventures, Seven Peaks Ventures and Green Visor Capital.

Cancer Treatment Developer Civetta Therapeutics LLC has named Christopher D. Roberts as CEO. Most recently, he was Chief Scientific Officer at Black Diamond Therapeutics. Civetta, based in Cambridge, Massachusetts, is supported by Deerfield Management.

Outputs

Whoop, the provider of a subscription service that includes a fitness and sleep tracker, acquired a befriended sports technology startup Push in a cash and stock transaction. Earlier this week, Boston-based Whoop announced a $ 200 million Series F funding round led by SoftBank Vision Fund 2, which gives the company a valuation of $ 3.6 billion.

Contentsquare, the digital experience analytics company, is acquiring Hotjar, a product experience insight platform, for an undisclosed amount. In May, Contentsquare announced that it had raised a $ 500 million Series E round, led by SoftBank Vision Fund 2, valued at $ 2.8 billion.

Buy Now, Pay Later Zilch acquired the NepFin debt financing platform for an undisclosed amount. London-based Zilch recently added $ 110 million in new Series B financing from Goldman Sachs Asset Management and DMG Ventures. Gauss Ventures invested in the first tranche of Series B.

New money

Checkr, a San Francisco-based startup whose technology automates background screening of applicants, raised $ 250 million in Series E funding and valued the company at $ 4.6 billion. Durable Capital, Fidelity Management & Research Co. and Franklin Templeton led the round, in which the existing investors BOND, Khosla Ventures, IVP, T. Rowe Price, Coatue Management, Accel and Y Combinator participated.

Likely Monsters Inc., a Bellevue, Washington-based video game development company, received $ 200 million in Series A funding led by LKCM Headwater Investments, the private equity arm of registered investment advisor Luther King Capital Management became.

Carsome Group, a Malaysian automotive e-commerce platform, completed a $ 170 million Series D2 round, bringing the company’s valuation to $ 1.3 billion. The new investors Catcha Group, MediaTek, Penjana Kapital and Emissary Capital were supported in the new financing by previous donors Asia Partners, Gobi Partners, 500 Southeast Asia, Ondine Capital, MUFG Innovation Partners, Daiwa PI Partners and others.

The Olsam Group, which buys and scales third-party Amazon and other e-commerce brands direct to consumers, raised $ 165 million in Series A equity and debt. Apeiron Investment Group and Elevat3 Capital led the equity stake, while North Wall Capital provided debt capital.

VanMoof, a Dutch e-bike brand, has received $ 128 million in Series C funding. Hillhouse Investment led the round that included Norwest Venture Partners, Felix Capital, Balderton Capital and TriplePoint Capital.

HomeLight Inc., a San Francisco-based home buying and selling platform, secured $ 100 million in Series D equity finance and $ 263 million in debt. Zeev Ventures led the round, which included contributions from Group 11, STCAP, Menlo Ventures and Lydia Jett of SoftBank Vision Fund.

Humane Inc., a San Francisco-based computer startup currently in stealth mode, raised $ 100 million in Series B funding. Tiger Global Management led the investment, which included support from SoftBank Group, BOND, Forerunner Ventures, Qualcomm Ventures, Kindred Ventures, TIME Ventures, Valia Ventures, and others.

Insurify Inc., a Cambridge, Massachusetts-based virtual insurance broker and comparison platform, has completed a Series B round for $ 100 million. Lead investor Motive Partners was funded by Viola FinTech, MassMutual Ventures, Nationwide, Hearst Ventures, Moneta Venture Capital, Viola Growth and Fort Ross Ventures.

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September 03, 2021 9:11 AM ET (13:11 GMT)

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