Coronavirus Effects On Private Markets (June 22-June 28)

Latest news on the coronavirus

In case you missed it:

East Ventures eyes $88M for post-pandemic deals

East Ventures has raised $57 million toward an $88 million target for a new seed vehicle that will back startups coming out of the coronavirus crisis, according to Bloomberg. With offices in Jakarta, Singapore and Tokyo, East Ventures pursues early-stage deals across Southeast Asia and Japan. —Kevin Dowd, 2:45 p.m. PDT

Investors adapt to a pandemic in France and Benelux countries

During the past decade, the France and Benelux region—which includes Belgium, the Netherlands and Luxembourg—has assumed an increasingly prominent place in the private market landscape. But now, in a few different ways, the pandemic is starting to shake things up.

PitchBook’s 2020 France & Benelux Private Capital Report reveals an expected dip in private equity deal value and a shift toward late-stage deals among venture investors. Other key takeaways include:

  • Exit activity is expected to decline in both VC and PE, in what could be a long-term trend
  • New opportunities may emerge for venture-backed companies in the biotech and ecommerce sectors
  • PE fundraising rates are cooling off after a record 2019

—Dominick Mondesir, Nalin Patel and Masaun Nelson, 5:50 p.m. PDT, June 24

Sonder hits $1.3B valuation with latest round

Travel startup Sonder has raised $170 million in Series E funding, with plans to raise additional funds that will bring the round total to $200 million. FidelityWestCap and Inovia Capital led the financing. The new capital values the provider of high-end home rentals at $1.3 billion, compared to the $1.1 billion valuation it claimed last summer. Sonder reportedly laid off a third of its staff in March to cut costs as the pandemic set in. —James Thorne, 5:45 p.m. PDT, June 24

Coronavirus effects on venture capital

Fintech startup ScaleFactor to shut down

Fintech startup ScaleFactor has decided to shut down after the pandemic eliminated demand for its bookkeeping and payroll software, according to Forbes. The Austin-based company reportedly told its 100 employees Tuesday that half of them would be laid off and by August, only 10 would remain to help wind down operations. ScaleFactor had raised $60 million in a funding round last July at a $360 million valuation, according to PitchBook data. —Vishal Persaud, 6:10 p.m. PDT, June 23

Focusing on femtech with ‘In Visible Capital’

In the new installment of our “In Visible Capital” podcast, reporter Eliza Haverstock joins hosts Adley Bowden and Adam Lewis to discuss her recent story on growing VC interest in startups using tech to change the way women navigate menopause.

The episode includes a discussion of why the femtech space has historically struggled to pull in VC dollars, as well as how female founders and investors are handling the shaky economic climate brought on by the COVID-19 pandemic. —Adam Lewis, 4:28 p.m. PDT, June 22

Coronavirus effects on private equity

Firms secure $20.7B pipeline deal in Abu Dhabi

The onset of the coronavirus crisis shook up the oil and gas industry, causing many private equity players to reevaluate their roles in the space. But that hasn’t stopped a group of deep-pocketed investors from lining up one of the biggest energy deals in recent memory.

The state-owned Abu Dhabi National Oil Company has agreed to sell a 49% stake in its newly created gas pipeline unit for $10.1 billion to a six-firm consortium including Global Infrastructure PartnersBrookfield Asset Management, Singapore’s sovereign wealth fund GIC and Ontario Teachers’ Pension Plan Board. The move values the unit, which holds lease rights to 38 pipelines, at $20.7 billion.

The announcement lands amid a turbulent and unpredictable year for the oil and gas industry. Earlier in 2020, US producers faced vast surpluses as a result of declining travel and price cuts by OPEC producers and Russia, pushing crude futures prices below zero for the first time on record. Yet, oil is currently rebounding, underlined by WTI crude prices passing $40 per barrel earlier this week for the first time since March. —Eliza Haverstock, 11:00 a.m. PDT, June 24

Ares nearly doubles target for opportunities fund

Ares Management has closed its first special opportunities fund on $3.5 billion, blowing past an original $2 billion target. The news comes shortly after Bain Capital raised $3.2 billion for a similar fund focused on distressed debt and special opportunities, according to Bloomberg.

With the coronavirus pandemic bringing unexpected financial hardships to many companies, the universe of potential distressed investments has expanded in recent months. So far, though, the market for raising funds targeting such deals hasn’t experienced a similar boom. Globally, firms have raised $16 billion across 10 distressed debt and special situations funds so far this year, according to PitchBook data, including the recent efforts from Ares and Bain. Last year, investors tallied $28.2 billion across 34 such funds.

There is a significant population of older funds, though, that may be positioned to capitalize on the current landscape. The distressed debt and special situations fundraising market reached its recent peak in 2017, when the industry closed 58 different funds with a combined $49 billion in commitments. —Eliza Haverstock, 5:01 p.m. PDT, June 23

Bain Capital, Cyrus Capital square off for Virgin Australia

Bain Capital and Cyrus Capital Partners have reportedly made final bids for airline Virgin Australia, with the company expected to choose a preferred bidder by June 30. The news comes after Virgin Australia filed for bankruptcy protection in April due to a reported $3 billion debt load and a steep drop-off in demand from the COVID-19 pandemic. —Adam Lewis, 2:30 p.m. PDT, June 22

Source: PitchBook

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