Morning Report: As the public markets continue to set new records, private investors are preparing to keep the good times rolling.
Worries about liquidity, a public market correction, intense competition for talent, and more are not enough to slow the party among private investors focused on high-growth, yet-private tech shops.
According to Axios, the big venture funds that raised in “early 2016 are returning to market in the first half of this year.”
That means that early-2018 could bring an unexpectedly strong haul to the venture community. This after venture capitalists raised huge sums in early 2016. NVCA, an industry group, reported in April 2016 that Founders Fund had picked up $1.3 billion and that Accel and Norwest raised $1.2 billion apiece in the first quarter of that year, for example.
All told, according to the same NVCA report, “U.S. venture capital firms raised $12.0 billion for 57 funds during the first quarter of 2016, a 59 percent increase by dollar commitments from the first quarter of 2015.” And some of those firms are back, it seems, and hungry for more.
Naturally, if the venture firms that raised quite a lot before are coming back for another portion it means that they have deployed their last batch and need more cash to put to work.
What should we take from venture capitalists raising more, and faster in early 2018? That there is a general perspective that things aren’t going to fall apart before new deals can find liquidity.
The LPs and venture players are not alone in their optimism, however. The President is trumpeting the recent progress of the public markets, seemingly implying that even more gains are to come. Perhaps.
The above asks the question which group is more overly-optimistic: public or private investors? And, if the answer is either or both, which side of the IPO-divide will see the first material correction?
From The Crunchbase Daily:
- Uber founder and former CEO Travis Kalanick plans to sell about 29 percent of his ten percent stake in the ride-hailing company to SoftBank, according to a Bloomberg report citing unnamed sources. The sale would reportedly generate $1.4 billion for Kalanick.
- Wealthfront, a provider of tech-enabled wealth management tools, is raising $75 million in a late stage round led by Tiger Global. The latest financing brings total funding for the ten-year-old, Silicon Valley company to more than $200 million.
- Frank, a startup that helps students and families maximize financial aid by negotiating directly with universities, has raised $10 million in a Series A round backed by Apollo Global Management, Reach Capital, and Aleph. It’s the second funding round in less than a year for the fast-growing, two-year-old company.