Steve Case, co-founder of AOL, is raising a $500M fourth growth fund for his D.C.-based venture outfit, Revolution. Almost four years have passed since the firm’s third growth fund was closed at $525M.

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• The firm is possibly best known for its Rise of the Rest seed funds, which invest in cities less-frequented by venture capitalists. The most recent iteration was closed last year at $150M. 
• The abnormally long delay between growth funds is potentially due to Revolution’s mission of investing in cities where living/operating costs are substantially lower, which lets each check go further.
• Revolution's big exits include DraftKings, which debuted on the Nasdaq after a reverse-three-way-merger, and BigCommerce, which debuted in August and has a market cap of $4.2B.
• In Other News: One of the firm’s executives, Ron Klain, was selected to be President-elect Joe Biden’s Chief of Staff.

FireEye, the ML-based cybersecurity data sorting automation platform, bought Respond Software for $186M. The deal for Respond, a cybersecurity incident investigation platform for low-skilled users, will be transacted with a mixture of cash and stock.

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• FireEye also secured a $400M investment from Blackstone Tactical Opportunities fund and ClearSky. The investment was purchased at $1000 per 4.5% Series A Convertible Preferred Stock, which can be converted to $18. FireEye’s stock closed yesterday well beneath that at $14.24, even after seeing a bump on the news hitting.
• Respond was founded in 2016 and has raised $32M to date. That includes a $12M Series A led by CRV and Foundation Capital and a $20M Series B led by ClearSky.
• Relatedly: Cybersecurity companies are being gobbled up like hotcakes. Just over a week ago, Palo Alto Networks acquired attack surface protection platform Expanse for $800M.
• From Twitter: CRV marketing operative Krista McNish noted that the early-stage venture firm has now seen four acquisitions this year from its portfolio companies.
  

Analyses Made Easy

Pitchbook’s Private Fund Strategies Report for Q3 2020*

*All figures and graphics are taken directly from the report itself.

Capital raised for private funds in the 12 months preceding September 2020 totaled $950.6B, down 7.0% YoY. The odds that 2020 is able to reach 2019’s of over $1T is small given its current standing at $629B.

The total fund count previously mentioned period was down 26.7% YoY to 1,753, which underlines the degree to which capital is now being concentrated in larger funds. This has contributed the appearance of a decidedly downward trajectory dating back to 2017’s high mark of 2,660 for fund count. Only 150 first-time funds closed prior to the end of September, putting 2020 on pace for 200 new funds in total. That is a slowdown compared to previous years. In 2017, 299 first-time funds closed on $36.8B in commitments, and the capital raised in 2019 was slightly higher but across only 277 funds (see graph).

VC managers have closed on the most first-time funds (90) in the first three-quarters of the year. Still, this is not on track to match previous years’ norm of 150. VC topped the list of private strategies in total commitments for first-time funds with $7.1B raised against PE’s $5.4 billion.

Viewed in terms of regions, North America represented 53.2% of capital raised for maiden funds and 50% of their fund count in the first nine months of 2020. This means that North America’s first-time fund managers were more successful than their international counterparts but less successful than their domestic colleagues, who took a more substantial majority of the global haul both in terms of fund count and capital raised (see graphs).

While VC dominated in the new fund count, it still lags substantially behind private equity in terms of total capital raised across all funds (see graph right). That should be qualified by noting that venture capital funds have a larger share of total dollars raised so far in 2020 than in 2019, and are almost on par with 2018’s totals. Meanwhile, the average fund across all strategies and geographies continued growing quickly, and the median fund’s swelling has accelerated (see graph left).

North America’s share of the capital raised by VC funds grew to more than 70% in 2020 so far, which is slightly up from 2019. That said, the amount of North American-based funds has slightly declined as a percentage of the global total. That has been driven by a spate of funds totaling $1B or more, in addition to strong numbers from the $500M-$1B bracket (see graphs). 

As the fund total and capital raised for VC funds continues to grow, it reached $81.5B in total for 2020 with (so far) over 420 funds. This year’s total is on pace to top 2019’s $87.6B, though the round count will continue to decline. Odds are that 2020 will not match 2018’s record-setting $120.8B raised over 942 funds. Yet dry powder levels are showing resilience despite global circumstances. There is a current overhang of $257B, the vast majority of which is made up of capital raised dating back to 2018 (see graph). The total potential of assets under management tops $900B. 

Did you enjoy reading this "Analyses Made Easy" feature? These pieces are mainly reserved for premium subscribers. Previous editions have focused on Pitchbook's Biotech Company Lifecycle Report, Crunchbase's North American Q3 2020 Funding Report, CB Insights' State of VC reports, a16z analyses, and more. To get access to them all, upgrade to Inside VC Premium for either $10/month or $100 billed annually! For a limited time, we are offering a 14-day free trial of premium! Click here to sign up!

Today's Funding 💸

Adtech/Martech

• Sponsoo (Hamburg, Germany), digital marketplace for sports sponsorships: $1.7M A led by Andreas Mihalovits.

AI/ML

• Verbit (New York, N.Y.), AI-powered transcription and captioning platform: $60M C led by Sapphire Ventures, participation from Vertex Ventures, Stripes, HV Ventures, ClalTech, Vertex Growth.

AR/VR

• Transfr VR (New York, N.Y.), VR-based one the job training platform: $12M A from Firework Ventures.

Biotech/Health

• Medable (Palo Alto, Calif.), patient-centric research strategy development platform: $91M C led by Sapphire Ventures, participation from GSR Ventures, PPD, Streamlined Ventures.
• MedAvail (Mississauga, Canada), automated pharmacy services for clinics: $84M led by Ally Bridge Group, participation from Cigna Ventures, Redmile Group, Pura Vida Investments, Adage Capital Management, Lewis and Clark Ventures, Heights Capital Management, Maven Investment Partners, et al.
• Elevation Oncology (New York, N.Y.), precision medicines for patients with genomically defined cancers: $65M B led by venBio Partners, Cormorant Asset Management, Boxer Capital, Janus Henderson, Samsara Biocapital, Vivo Capital, Aisling Capital, Vertex Ventures HC, Qiming Venture Partners USA, Driehaus Capital Management, BVF Partners. Andrew Phillips, et al.
• FirstVet (Sweden), on-demand online veterinary consultations: $35M led by Mubadala Capital, participation from Cathay Innovation, OMERS Ventures, Creandum.
• Apprentice.io (Jersey City, N.J.), intelligent software company for life science manufacturing: $24M B from Insight Partners. Pacific Western Bank, Pritzker Group Venture Capital, GFR Fund, The Venture Reality Fund.

Cleantech

• Aclima (San Francisco, Calif.), hyperlocal air pollution and greenhouse gas measurement and analysis platform: $40M B from Microsoft Climate Innovation Fund, Robert Bosch Venture Capital, Splunk, GingerBread Capital, KTB Network, ACVC Partners, Womens VC Fund II, et al.

Consumer

• Yubo (Paris, France), platform for GenZ to socialize online: $47.5M C from Idinvest, Iris Capital, Alven, Sweet Capital, Gaia Capital Partners.

Cybersecurity

• Forter (New York, N.Y.), e-commerce fraud prevention services: $125M E led by Bessemer Venture Partners, Felix Capital, Itai Tsiddon, participation from Sequoia Capital, NewView Capital, Scale Venture Partners, March Capital Partners, Commerce Ventures.
• Deepfence (Milpitas, Calif.), cloud-native workload protection platform: $9.5M A led by AllegisCyber, participation from Sonae IM, Chiratae Ventures.
• Ubiq Security (San Diego, Calif.), security startup with APIs for dev use: $6.4M Seed led by Okapi Venture Capital, participation from TenOneTen Ventures, Cove Fund, DLA Piper Venture, Volta Global, Alexandria Venture Investments.

Data/Analytics

• ClosedLoop.ai (Austin, Texas), healthcare data science platform: $11M A led by Greycroft, .406 Ventures, participation from Silicon Valley Bank, Meridian Street Capital.

Deeptech

• Zapata Computing (Boston, Mass.), NISQ-based quantum applications: $38M B from Comcast Ventures, Pitango, Prelude Ventures, BASF Venture Capital, Robert Bosch Venture Capital, The Engine Accelerator Fund, Ahren Innovation Capital, Alumni Ventures Group, Honeywell Venture Capital, ITOCHU Corporation, Merck Global Health Innovation Fund.

Edtech

• Encantos (Culver City, Calif.), digital/physical play-based learning platform: $5.7M Seed led by Precursor Ventures, participation from Angeles Ventures, Concrete Rose Capital, Metrodora Ventures, Next Play Ventures, Portfolia’s Rising America Fund, Revolution’s Rise of the Rest Seed Fund, Patty Arvielo, Spencer Rascoff, Human Ventures, Kapor Capital, MathCapital.

Enterprise

• SellerX (Berlin, Germany), platform to acquire top Amazon sellers: $118M (€100M) led by Cherry Ventures, Felix Capital, TriplePoint Capital, participation from Village Global, et al.
• Afresh (San Francisco, Calif.), software to track demand and manage orders for fresh produce in grocery stores: $100M led by Food Retail Ventures, participation from Innovation Endeavors, Maersk Growth, Baseline Ventures.
• ZenBusiness (Austin, Texas), toolkit to help entrepreneurs launch microbusinesses: $55M B led by Cathay Innovation, participation from GreatPoint Ventures, Breyer Capital, Omega Venture Partners, Greycroft, Lerer Hippeau Ventures, Interlock Partners, Adam Zeplain’s mark vc, ATX Venture Partners.
• Cogito (Boston, Mass.), real-time emotional intelligence solutions for professionals: $25M led by Goldman Sachs Growth Equity, participation from Salesforce Ventures.

Fintech

• OurCrowd (Jerusalem, Israel), crowdfunding site: $60M from ORIX Corporation.
• CAIS (New York, N.Y.), alternative investment platform: $50M B from Eldridge.
• Satispay (Italy), payment app: $93M C from Square, et al.
• Aya (Toronto, Canada), payments solutions and program administration for employee benefits packages: $2.9M (CAD$3.7M) led by MaRS Investment Accelerator Fund, Luge Capital, participation from Anthemis Group, BDC Capital, StandUp Ventures, et al.
• Juni (Sweden), banking app and platform for e-commerce and online marketing entrepreneurs: $2.5M (€2.1M) Seed led by Cherry Ventures.
• YvestBlue (New York, N.Y.), automated ESG and impact reporting for asset management firms: $2M Seed led by Illuminate Financial Management, participation from SixThirty, Tribeca Early Stage, George Fox.

Socialtech

• Charityvest (Atlanta, Ga.), donation platform: $2.3M Seed led by DCM Ventures, participation from Teamworthy Ventures, Duro.vc, Sovereign’s Capital, Promus Ventures.

Transportation

• Morai (South Korea), autonomous vehicle simulation systems: $1.8M A from Kakao Ventures, Korea Credit Guarantee Fund, Naver D2SF.

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QUICK HITS:

• Social gaming platform for teens Roblox filed for an IPO. It reported losses of $206M on $589M in revenue for the first nine months of 2020, compared to $46M in losses on $350M YoY. The company has raised $335M since its founding and was recently valued at $4B.
• Nasdaq will purchase Verafin, an AI-based money laundering and fraud detection platform, for $2.75B. If completed, the deal will be Nasdaq’s largest in a decade.
• See how brands like Discovery, Manscaped, Microsoft, and Gymshark use Attest to understand how their audience feels about their industry, how they shop, and what their pain points are.*
• Jobs site Hired is winding down operations as it begins to sell assets and pay off creditors. The company had raised a total of $150M and achieved a top valuation of $500M. CEO Douglas Feirstein claimed the company was being acquired. The company reportedly does not expect to distribute any cash to shareholders after paying off creditors.
• Buzzfeed will acquire Verizon Media’s HuffPost in a stock deal. The acquisition is part of a larger effort to syndicate content on the two platforms. Verizon will receive a minority stake in Buzzfeed.
• Industry-leading SEO strategies have helped companies double their users in under 90 days. Click here to get your free consultation and see how you can grow your business.*

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