PitchBook is providing ongoing coverage of the coronavirus outbreak and its effects across the private markets and the economy.
- Virtual IPO roadshows could become the new post-crisis standard
- Pandemic speeds up digital transformation in construction
- Instacart valuation rockets to $13.7B with new funding
DoorDash nears $16B valuation with $400M haulFood and grocery delivery company DoorDash has raised $400 million at a nearly $16 billion valuation, a nearly 23% jump from last November. Durable Capital Partners and Fidelity Management co-led the round, with T. Rowe Price and existing investors participating.
The pandemic has led to a rapid rise in sales for online food and meal deliveries. DoorDash has proven to be a leader in the US, commanding 45% of the meal delivery market in May, according to consumer analytics provider Second Measure. —James Thorne, 5:57 p.m. PDT
How COVID-19 is shaping insurtech investmentOur latest research note examines the pandemic's impact on insurtech. As the insurance industry faces the near-term implications of potentially significant financial losses, our analysts contend the crisis could spur long-term growth opportunities—and drive more investment in the insurtech sector. Key takeaways:
- Auto insurers will seek more automated driver data rather than rely on self-reporting
- Commercial insurers are likely to make bigger investments in digital engagement tools and could see growth in high-risk areas of the economy
- Digital infrastructure needs will accelerate as the coronavirus outbreak reveals weaknesses in the current technology
Trio of biotech companies updates IPO termsBiotech IPOs entered the pandemic with momentum and have continued to show strength, despite a broader pullback in public listings. So far in 2020, healthcare companies as a whole accounted for nearly 85% of VC-backed IPOs in the US, according to PitchBook data.
That trend is holding this week, as three venture-backed biotech startups have announced target ranges for their upcoming IPOs:
- Forma Therapeutics, a Massachusetts-based developer of treatments for rare hematologic cancers and diseases, plans to offer around 11.76 million shares on the Nasdaq for between $16 and $18 per share.
- Operating out of Montreal and Boston, precision oncology company Repare Therapeutics is offering just over 7.35 million shares on the Nasdaq, with a target range of $16 to $18 apiece.
- San Diego-based Progenity, a genetic testing provider, is offering about 6.67 million shares, which it expects to sell on the Nasdaq for between $14 and $16 each.
- Chinese cancer diagnostics company Genetron Holdings and Royalty Pharma, a New York-based acquirer of biopharma royalties, are also planning Nasdaq debuts for sometime this week, according to Renaissance Capital.
A time that's ripe for impact investorsThis would seem a tailor-made climate for impact investors, whose mandates are all about repairing the world, to tap into the massive public attention on social issues. There are signs that this segment of the market has seen a pickup in activity in recent years, but deals have typically been based on factors other than race. Will investors seize this historic moment and set their sights on racial inequality? —Alexander Davis, 12:33 p.m. PDT, June 15
PE-backed Neiman Marcus gets financing to make it through Chapter 11A US bankruptcy judge has reportedly approved a plan for lenders to give Neiman Marcus $400 million in debtor-in-possession financing, with $250 million available now and $150 million available in September. The news comes after the high-end clothing retailer filed for Chapter 11 protection in May, citing a heavy debt load and temporary store closings due to the COVID-19 pandemic. Ares Management and Canada Pension Plan Investment Board acquired the company for roughly $6 billion in 2013. —Adam Lewis, 4:47 p.m. PDT
UK's Cineworld faces legal action over failed takeoverCanada's Cineplex has revealed plans to take legal action against UK rival Cineworld after the latter company pulled out of an agreement to acquire Cineplex for some $2.3 billion, according to the Financial Times.
Cineworld agreed to pay C$34 (about $25 today) per share for the Toronto-based business in December, but opted not to follow through on the deal after nearly half of the company's market value was wiped out by the coronavirus outbreak and temporary closures of its cinemas. It is one of several takeovers that have been called off in recent months as the fallout from the pandemic continues to settle. —Andrew Woodman, 1:01 p.m. PDT, June 17
PE-backed 24 Hour Fitness files for Chapter 1124 Hour Fitness has filed for Chapter 11 bankruptcy protection, citing the impact of temporary gym closings amid the pandemic. The California-based company has secured $250 million in debtor-in-possession financing to help it stay afloat as it looks to trim a roughly $1.4 billion debt load. AEA Investors and Ontario Teachers' Pension Plan acquired the company for about $1.9 billion in 2014. —Adam Lewis, 10:50 a.m. PDT, June 16
How delivery tech is reshaping the grocery industryIn the wake of widespread stay-at-home orders, grocery delivery has surged, reversing a recent trend toward restaurant delivery and eating out. It may seem that this shift is temporary and primarily driven by the pandemic, but our research analysts contend that grocery delivery is likely to continue thriving. Their latest research note details why, with key findings including:
- Grocers are now heavily investing in the infrastructure required to meet current demand and defend market share even as restaurants gradually reopen
- New technologies have emerged to help fuel a shift toward grocery delivery, such as "dark stores" and autonomous delivery
- Consolidation will likely be necessary for the online food delivery industry to achieve sustainable margins
Pandemic drives investment into supply chain technologyThe rise of the digital economy is putting new pressure on the traditional global supply chain. Businesses are demanding better visibility across delivery and supply channels, quicker shipping capabilities and the ability to source products on-demand to reflect real-time conditions at the consumer level. We view this as a compelling backdrop for new entrants seeking to address gaps in the status quo and see areas of growth across the value chain. Our Q1 Emerging Tech Research: Supply Chain Tech report covers this and more. Key trends include:
- The pandemic has highlighted the need for data analytics and real-time monitoring services
- Warehousing tech startups continued to attract swathes of capital in Q1 2020 after a record-setting 2019
- Rising consumer demand for home delivery is driving investors and corporates to ramp up investment in last-mile logistics
Did you miss any of our continuing coverage of COVID-19? Find our previous updates below:
- Coronavirus effects on private markets (June 8-June 14)
- Coronavirus effects on private markets (June 1-June 7)
- Coronavirus effects on private markets (May 25-May 31)
- Coronavirus effects on private markets (May 18-May 24)
- Coronavirus effects on private markets (May 11-May 17)
- Coronavirus effects on private markets (May 4-May 10)
- Coronavirus effects on private markets (April 27-May 3)
- Coronavirus effects on private markets (April 20-April 26)
- Coronavirus effects on private markets (April 13-April 19)
- Coronavirus effects on private markets (April 6-April 12)
- Coronavirus effects on private markets (March 30-April 5)
- Coronavirus effects on private markets (March 23-March 29)
- Coronavirus effects on private markets (March 4-March 22)