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 Gartner Inc. predicts that by 2022 the level of global M&A activity for tech companies will surpass previous highs recorded in 2018. Activity in Q4’20 was higher than any other in the last two years, despite Q2 being impacted by the pandemic (see graph above).More:Financial acquisitions (for example, by a private equity outfit) of software providers represented over half of all such acquisitions throughout 2020. Financial acquisitions of communications providers saw 93% growth in the second half of 2020, the largest gains for that time period.Acquisitions of service providers by financial acquirers were 30% higher in Q4 2020 than on average over the last two years.Acquisitions of services and software companies made up the sectors with the second and third fastest M&A growth, respectively.Consolidation of companies with high degrees of overlap increased by 65% and 40% in services and software markets, respectively, in the second half or 2020. |
 Share prices have on average fallen 12.6%. among the 44 technology startups that completed a SPAC deal from the start of 2020 through this past April. The Defiance Next Gen SPAC Derived Exchange-Traded Fund has fallen 30% since February (see graph above).More:50% of startups that went public through a SPAC merger in 2020 missed their revenue forecasts, and 42% saw their revenues decline in their first year as a public company.The SPAC-merged companies only fared slightly worse than their counterparts which opted for IPOs:The 77 tech companies that had an IPO during the same period saw share prices fall 10.7% from the close of their first day of trading.Over half of the tech stocks declined more than 20% from April to May 2021.Reminder: Over 400 SPACs are still seeking companies for mergers. After two years without finding a target, they are obligated to return investors’ money. |
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| Best of Last WeekM&AMumbai-based edtech company Eruditus Group will acquire SV-based online education provider iD Tech for $200M. iD will continue operating independently.Ride-hailing giant Gojek and marketplace Tokopedia, both from Indonesia, formally announced their merger plans. The new entity will be called the GoTo Group and is preparing for a dual listing later this year in New York and Jakarta.London-based GlobalBlock announced that it would be merging with Canada-based Helix Applications following Helix’s $40M purchase of GlobalBlock shares. Telehealth company Ro acquired female fertility startup Modern Fertility for an estimated $225M+.Supply chain visibility firm Roambee acquired cloud analytics firm Arnekt, which will allow it to augment its package-tracking platform with Arnekt’s data science, natural language processing, and AI.Austin-based AI/ML company SparkCognition acquired Ensemble Energy, which will help it develop an AI-based management platform for clean energy solutions.Location technology platform Foursquare will acquire Unfolded, a geospatial data services provider.Camera company Snap will acquire WaveOptics, a startup that designs and manufactures waveguides for AR wearables. The deal is valued at over $500M, according to TechCrunch.IPOWeb hosting services provider Squarespace saw its share price fall 9.1% during its direct listing after opening at $48, below the NYSE’s price reference. The company has a current market value of $5.9B, significantly down from the $10B of its most recent funding round in March.Cloud-based construction software provider Procore raised $634M prior to its IPO by pricing 9.47 million shares above its range at $67. The company now has a fully diluted enterprise value of $9.6B.Chinese e-commerce giant JD.com’s logistics unit has filed for an IPO in Hong Kong and is looking to raise up to $3.4B at a $34B valuation. JD Logistics’ revenue grew by 47% last year to $11.4B, with JD.com accounting for 54% of it. JD.com owns 79% of the business.Software maker Monday.com and luxury online retailer 1stDibs.com both filed for an IPO. The firms both entered a symbolic $100M funding target and are backed by Insight Partners.Paymentus, billing and payments network, is aiming at a $2.43B valuation for its IPO. NerdWallet, a platform that helps people to find the right credit products, has confidentially filed for an IPO, according to Reuters.Procore Technologies, a cloud-based construction management software developer, raised its target IPO stock price to $67, from the $60-$65 range earlier this month. The listing will take place on May 28, and the company is aiming to raise $634M.SPACJam City has filed to merge with SPAC DPCM Capital, which is led by Emil Michael, Uber’s former chief business officer. The deal will value the new entity at $1.2B and see Jam City raise $115M from DPCM and a further $100M from PIPE. The company, which publishes a Harry Potter: Hogwarts Mystery game, will also acquire Canadian mobile game publisher Ludia for $175M.Bright Machines, which offers a platform that uses artificial intelligence and robotics to automate tasks in manufacturing, will merge with SPAC SCVX at a $1.6B valuation. The company will raise $230M from the SPAC itself and $205M from PIPE.Tiket.com, an Indonesian travel startup, is considering a $2B SPAC deal. The startup is now valued at over $1B.Cloud communication company Twilio will acquire Zipwhip, a startup that helps people and businesses have effective text-based conversations.In a regulatory filing, EV startup Canoo said it was being investigated by the Securities and Exchange Commission (SEC). The SEC is taking a closer look at Canoo’s recent merger with Hennessy Capital Acquisition Corp, a blank-check acquisition company, and all aspects of Canoo’s business.Huitongda Network, an e-commerce platform serving China’s rural areas, is reportedly considering a Hong Kong IPO to raise up to $1B.New FundsBain Capital Ventures (BCV) raised $1.3B across two new funds. $950M will be reserved for seed/series A-stage deals, while $350M will be pumped into growth-stage opportunities. 83North has raised $550M for its sixth fund to back European and Israeli companies. The fresh capital brought the firm’s total funds under management to $1.8B.Japan-based Edge Capital Partners (UTEC), an early-stage VC firm investing in global deep-tech startups, launched its fifth fund, expected to raise ~$275M by June.Meritech Capital raised a $250M Franchise Fund to invest in growth-stage venture deals.Ulu Ventures, a seed-stage firm focused on Latina-led enterprise IT, raised $138M its Fund III, exceeding its initial $100M target.Zach Perret, CEO of payments infrastructure company Plaid, is raising $30M for a venture capital fund called Mischief.Semble Ventures, which backs technical and repeat founders in the U.S. and Europe, is raising a $50M second fund.CMB International, a subsidiary of China Merchants Bank, launched a $50M blockchain fund with Nervos Foundation. CMB International and Nervos Foundation launched a $50M fund geared towards blockchain. Griffin Gaming Partners is raising a $25M side fund to invest in gaming platforms and infrastructure, gaming content, and game studios.European startup studio eFounders reached its 10-year anniversary with a portfolio worth $2B, just 18 months after its cohort’s total value reached $1B.Since 2014, the Rise of the Rest seed fund has invested in 181 early-stage companies throughout 33 states and 83 cities. |
 Today’s Funding AgtechTerviva (Alameda, Calif.), pongamia tree-based oils and plant proteins: $78M from Astera Institute, Evans Properties, Trustbridge Partners, The Jeremy and Hannelore Grantham Environmental Trust, Ron Edwards, et al.ProducePay (Los Angeles, Calif.), financing, analytics, and marketplace for the global fresh produce market: $43M C led by G2VP, IFC, IDB Invest.AI/MLFaculty (U.K.), AI programs: $42M from undisclosed sources.SiLC Technologies (Monrovia, Calif.), machine vision applications: $17M from Alter Venture Partners, Dell Technologies Capital, participation from Fluxunit – OSRAM Ventures, Sony Innovation Fund, Epson, UMC Capital, Yamato Holdings, Global Brain.Fireflies.ai (San Francisco, Calif.), natural language processing platform: $14M Seed led by Khosla, participation from Canaan Partners.Biotech/HealthArch Oncology (Brisbane, Calif.), anti-CD47 biologic therapies for oncology uses: $105M C from Eventide Asset Management, Cowen Healthcare Investments, 3×5 Partners, Adage Capital Management.Sera Prognostics (Salt Lake City, Utah), pregnancy platform: $100M E from Vivo Capital, aMoon Fund, Parian Global, et al.Eliem Therapeutics (Seattle, Wash.), novel therapies for neuronal excitability disorders: $60M B led by Intermediate Capital Group, RA Capital Management, participation from Access Biotechnology, Samlyn Capital.Appia Bio (Los Angeles, Calif.), engineered allogeneic cell therapies from hematopoietic stem cells for cancer patients: $52M A led by 8VC, participation from Two Sigma Ventures, Sherpa Healthcare Partners, Freeflow Ventures.ExeVir (Ghent, Belgium), single-domain antibody therapies providing broad protection against viral infections: $50M A led by Fund+, participation from VIB, UCB Ventures, SFPI-FPIM, V-Bio Ventures, SRIW, Noshaq, Vives IUF, SambrInvest, et al.Haya Therapeutics (Lausanne, Switzerland), precision medicines that target tissue and cell-specific long non-coding RNAs: |