VC, Startup, IPO, And Stock Market Investing News

vc new startup ipo schedule stock market investing updates economy

A lot of people have predicted how the VC market would fare in 2021. Six months in, the crystal ball is clearing, and our latest analyst note updates the scorecard. Some of our hits and misses include: Biotech and pharma didn't disappoint. The sector has already met our prediction that it would notch $20 billion in deal value for the second year in a row. And it did it two quarters ahead of schedule. We expected SPAC IPO activity to decline this year, and it did—but only after exploding in Q1 with 281 blank-check listings. Nontraditional investors are on pace to lead almost 2,000 early- and late-stage deals this year, which would surpass our prediction of a record 1,600. 

It appears that mega-funds are the hot private equity investing topic of 2021. This year is looking to be a banner one for private equity's mega-funds, with the likes of Hellman & Friedman closing its 10th namesake vehicle at $24.4 billion and The Carlyle Group reportedly eyeing $27 billion for its next flagship fund—in what would be the largest private equity vehicle of all time. In all, 12 buyout and growth mega-funds—defined as any fund that has raised over $5 billion—have already closed this year. For context, 18 mega-funds were closed in 2019, and 16 in 2020. According to Frugal Finance source data, at least seven of those 12 funds have raised over $10 billion each.

Venture Capital News

Shares in UK private equity firm Bridgepoint Advisers jumped by as much as 30% in its first day of trading on the London Stock Exchange, underscoring investor appetite for an asset class in the middle of a post-pandemic rebound. Bridgepoint, which priced its IPO at 350 pence per share (around $4.76 per share), saw its share price climb to just over 454 pence before closing at 420 pence. The firm joins a small cadre of publicly traded European private equity firms that includes Eurazeo, Partners Group, Tikehau Capital and EQT. The IPO comes at a time when European PE firms are driving a surge in deal activity. Earlier this week, a European PE Breakdown showed that the region has seen nearly €170 billion (around $200 billion) invested across some 1,800 deals during the second quarter, representing year-over-year increases of 137% and 161%, respectively.

Capital flows into life sciences at a record pace Well over $25 billion has been invested in US life sciences companies in 2021 already, a sum that exceeds annual totals for most of the 2010s. In addition, a slew of IPOs has contributed to a mammoth $36.4 billion in aggregate exit value. Orrick's latest edition of Life Sciences Snapshot breaks down these remarkable trends in depth—key data points and findings include: Additional drivers of meteoric rises in valuations Transactional volume by series and size A roundtable with industry experts focused on spinouts and how they can unlock value.

Clayton, Dubilier & Rice has elevated Andrew Campelli to partner. Campelli joined CD&R in 2015 and has served as an executive on the firm's industrials investment team. Operating out of London and New York, CD&R invests in sectors such as healthcare, retail and tech services.

Ethos, a life insurance startup, has raised $100 million from SoftBank's Vision Fund 2 at a valuation of $2.7 billion. This investment comes just two months after the San Francisco-based company closed a $200 million Series D, and brings Ethos' total capital raised to $400 million. Other backers of the company include Sequoia, Accel, GV and General Catalyst. 

VC Market

VC Dealmaking indicator quantifies the relationship between startups and investors Using our wealth of data on VC deal terms, valuations and fundraising, we have constructed an indicator that captures how startup- or investor-friendly the deal environment is in the early- and late-stage markets. To cut to the chase, we found that Q2's early- and late-stage deal terms have grown 2.7x and 3.3x more startup-friendly, respectively, since Q1 2010. To construct the indicator, we encoded five different deal terms as well as the time between rounds, valuation step-ups, and percent of ownership acquired. We've also included a new metric that seeks to estimate the supply and demand of capital in the VC market. Currently, both the early and late stages are quite startup-friendly, with the amount of capital in the market driving a large portion of that trend. Historically, we see that early-stage deals tend to be more startup-friendly when compared to late-stage deals.

Microsoft Making Major Moves 

What CEO Satya Nadella has done for Microsoft is INCREDIBLE - he's taken what was an arrogant SINKING SHIP and turned it around into a soaring ROCKETSHIP, and for that he deserves FULL credit for this turnaround. However, you have to understand that while is seems that EMPATHY helped generate a $ 2T company, EMPATHY was merely the FACE of that transition. What actually helped make Microsoft a $2T company was the brilliantly (borderline Machiavellian) way in which Microsoft first changed Windows 10, then almost forced the entire world to upgrade to it, then forced the requirement of a Microsoft account to use Microsoft Office, and then USED that requirement to leave 1000s of organizations worldwide with NO choice other than to somehow sign-up for its Cloud, not to mention changing most of its products in a way that you couldn't really do much without its Cloud. One more thing. They sheer amount of data it is now collecting from every Windows 10 PC (and you CANNOT turn that off i.e. you do NOT have a choice) is touted by them to the investment community as though they're a powerhouse in the security space. If you don't give people a choice, then use ALL of the above to make it appear to investors that they are experiencing substantial growth. 

Inflation Increases

A penny for your thoughts, but empathy is free. Inflation has us suffering from sticker stock, but are we ready to be shocked some more? With rising production costs, companies have been passing along higher costs to consumers with more on the way. For the most part, consumers have patiently put up with price hikes, but that patience won't last long especially if companies continue with their tactics. Higher material costs, supply chain disruptions and rising worker wages have all contributed to inflation. Some are controllable, while others aren't. While the test for companies over the next few months may be about the willingness of consumers to pay more, the real test may be on a company's brand reputation. Establishing loyalty is big deal in marketing, and companies preach about delivering value to consumers like it's going out of style. Unfortunately, that doesn't always come through in practice. Even before the pandemic, we've been paying more through sneaky price hikes (aka shrinkflation) where companies reduce the size or quantity of their products while charging the same price or even more. Price hikes are likely inevitable, and consumers will face the economic and financial implications that come with that. One would hope that empathy and transparency will play bigger roles as we go through these inflationary times. Ultimately, companies would be wise to remind themselves that while they hold leverage over supply and prices, consumers hold the leverage to buy something else.

Job Vacancies

There's ghosting in the job world, and then there's ghosting and inviting someone for an interview years later. That's the theme of a recent Wall Street Journal report, which highlighted a number of people who were contacted by places like McDonald's and Cheesecake Factory two to four years after applying for jobs. Laugh all you want at this tactic, but White Castle said it reached out to over half a million applicants dating as far back as 2017 with current job leads and 32,000 responded with interest. We're company-wide at White Castle and statewide with McDonald's in several states. Yes, as you'll read in this article published at WSJ, we're clearing out companies' backlogs of former applicants due to large job vacancies. The article doesn't mention that we're also recruiting and targeting former employees of these companies because we're finally acknowledging hourly workers as knowledge workers. It's long overdue for this change in tactics and perspective, but it could be too little too late for 2021.

Robinhood Initial Public Offering

Robinhood is having an IPO very soon and they are having a livestream event will feature a presentation by CEO Vlad Tenev and other leaders of Robinhood in the lead-up to taking the company public. It’s a chance for everyday investors to join for a presentation that would usually only be offered to institutional investors. They will also have a Q&A where these leaders will answer some of the top questions submitted over the last several days. The roadshow won’t be available for playback later, so hopes you can join them live! The offering will be made only by means of a prospectus. Copies of the preliminary prospectus relating to the offering may be obtained from: Goldman Sachs & Co. LLC or J.P. Morgan Securities LLC, c/o Broadridge Financial Solutions. A registration statement relating to these securities has been filed with the Securities and Exchange Commission but has not yet become effective. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. No offer to buy the securities can be accepted and no part of the purchase price can be received until the registration statement has become effective, and any such offer may be withdrawn or revoked, without obligation or commitment of any kind, at any time prior to notice of its acceptance given after the effective date. This announcement shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. All investments involve risk and loss of principal is possible. Robinhood Financial LLC is a registered broker dealer (member SIPC).  Robinhood Securities, LLC provides brokerage clearing services (member SIPC). Robinhood Crypto, LLC provides cryptocurrency trading. All are subsidiaries of Robinhood Markets, Inc. (Robinhood).

PE, VC, & IPO Updates

At the midpoint of 2021, European PE activity is surging toward annual records in dealmaking, exits and fundraising, highlighting PE as one of the most in-demand asset classes right now. The great lockdown crisis toppled many industry forecasts and trends while reinforcing and accelerating others, including PE, which arguably has never seen a more favorable environment for dealmaking. Other key takeaways from our new report: PE exit activity in Europe has returned with gusto after 2020's pandemic-induced slowdown, driven by €2.5 billion+ deals. Fundraising has been exceptionally strong, as robust secular trends continue to fuel LP confidence and boost PE allocations. Despite inflationary pressures and COVID-19 spikes with the delta variant, we expect to see much of the same from the European PE industry in the second half of the year.

AI & machine learning analyst Brendan Burke weighs in on the recent IPO of Blend, which went public at a valuation of just under $4 billion: "Blend's IPO continues a trend of VC exits for AI-integrated fintech startups. "Along with Blend, companies like Upstart,, Lemonade and nCino have recently achieved outstanding IPO outcomes by applying AI to distinct categories of financial services. "Blend delivers cloud-based SaaS to consumer financial services firms, focusing on mortgage lending along with other consumer products. "The company incorporates AI in its mortgage lending workflow automation product, not explicitly as part of loan decisioning. "Upstart has demonstrated that AI can be successfully and ethically applied to loan decisioning, which may present an opportunity for Blend as it collects more data. "Blend's S-1 is not explicit about the role of AI in its software nor its data inputs, creating uncertainty about the company's approach to AI ethics. The company's internally developed patents do not involve AI. "Blend was recently assigned a patent for a novel neural network architecture by Carnegie Mellon researchers that may lead to more extensive AI integration. "Financial services dependent on costly manual processes remain susceptible to disruption by AI-integrated startups."

Space tech is having a moment. But just how much VC money is going to those startups? And what does the future of the industry look like? PE's more growth-oriented investment approach is leading to new opportunities in cybersecurity, and our analysts say that might also be a boon for VC-backed startups. The PE dealmaking environment in Europe has never been better, and the findings from our latest report on the region were picked up by several outlets. 

Stocks soared to record highs last week, rebounding from last Monday's plunge as investors reacted to strong corporate earnings. The techy Nasdaq index rallied nearly 3% ahead of Big Tech earnings this week.

Facebook Finger Pointing

Facebook's Biden drama: misinformation has hurt the social giant's rep — but not its biz Drama in the feed. This month, President Joe Biden said social platforms like Facebook are "killing people" with Covid misinformation. Facebook's response: a blog post called "Moving Past Finger Pointing." In short, Facebook says it's not its fault that Biden failed to get 70% of American adults vaccinated by July 4th. Biden walked back his comments, but said social platforms should do more to tackle misinfo. As the Delta variant spreads, Covid cases have been surging among the unvaccinated. Biden believes anti-vax content is a key reason some remain unvaxed. A recent study found that 95% of Covid misinfo reported across social platforms wasn't removed. Facebook says it has removed 18M instances of Covid misinfo, and that 85% of its US users have been, or want to be, vaccinated. Déjà vu vibes... This public spat is part of a much broader issue of content moderation on Facebook, spanning from election interference, to hate speech, to the Capitol riots. Last year, 1K+ advertisers, including big shots like Verizon, paused spending on FB ads to protest its moderation policies. That didn't make a dent in FB's sales. Despite the criticism, FB's biz is thriving, and its stock is at a record high: For the quarter ended in March, FB's ad sales soared 48% from last year to $25B, and profit nearly doubled to $9.5B. When FB reports this Wednesday, analysts expect $28B in quarterly sales, or 60% growth from last year — even faster than the previous quarter. THE TAKEAWAY FB's biggest threats are external... For now, Facebook's 3.5B monthly users across FB, Insta, and WhatsApp mean advertisers are hooked. Misinformation doesn't seem to be hurting its biz — but intensifying antitrust scrutiny and competition from Gen Z-loved apps could. Last year, FB lost users in North America as TikTok blew up. Meanwhile, Biden has tapped Big Tech critics to lead on antitrust regulation. Potential breakups or blocked acquisitions could become existential threats.

Big Tech Earnings Report

Top big tech earnings and share prices drop together recently. Apple, Microsoft, Amazon, Google, and Facebook report quarterly numbers this week. Last quarter, the "Big Tech 5" demolished earnings. Amazon and Apple had their best first quarters ever, Google's profit more than doubled, and Microsoft posted its strongest growth since 2018. The Nasdaq index, which is dominated by the Big Tech 5, is up 17% this year. Despite reopenings, some online pandemic habits seem to have stuck, and even intensified. But tougher antitrust regulation could spell trouble for the "Tech 5" down the line. Oil or caviar?... You're feeling it at the pump: US gas prices are up 45% from last year. After oil prices plunged in March 2020, OPEC cut oil production to stop the free fall. Now, the powerhouse org of 14 oil-exporting countries has agreed to boost production, as oil prices hit their highest levels in more than two years. We'll see if higher prices helped Shell, Exxon, and Chevron when they report earnings this week so dust off your old stock certificates. The oil giants are also facing pressure to embrace renewable energy.

Coronavirus Comeback

A surge in Covid cases driven by the highly-contagious Delta variant is pouring cold water on recovery optimism and even the stock market at times. Delta now accounts for an estimated 83% of all new Covid-19 cases in the US. The CDC is calling it "a pandemic of the unvaccinated," and a few big counties, including LA, have brought back indoor mask mandates. Last Monday, the Dow stock index had its biggest one-day drop since October. Stocks have since recovered, but we could see more volatility ahead. The "House Hype" is real and it's not a TikTok creator mansion. The housing market boom pushed the median US home price to a record high of $363K last month. Homeowners have benefited, gaining $1.5T last year as home values soared. But after more than a year of extreme home shopping, the tight housing supply is increasing, and is expected to grow through the rest of this year. 

Learn More About Investing

There are always a lot of moving parts in the venture capital and investment world, so stay tuned right here on Frugal Finance for further updates. Also visit the Investing, Crypto, Bitcoin, and Frugal Finances sections of our blog to learn more today!

New Frugal Finance Blog Posts & Articles