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Note: This report covers all capital raises and acquisitions with announced values greater than or equal to $25M in the Internet & Digital Media sector.
Q2'19 Internet Sector Key Highlights
This report highlights key Internet sector trends and tracks notable industry transactions in Q2'19.
As we review recent activity in the public and private markets, we also offer insight into potential storylines that could develop in the coming months.
Deal Activity Remains Robust
We saw 20 meaningful acquisitions, showing an uptick in M&A activity relative to the previous two quarters but down in comparison to Q2'18. Average transaction size for the quarter was $359M with two notable transactions of over a billion dollars in deal value. Transactions of note include the acquisition of Shutterfly by Apollo Global Management ($2.8B) and Edgewell’s acquisition of Harry’s ($1.4B).
Valuations increased in Q2 as the average Internet forward revenue multiple increased to 5.1x vs. 4.8x in Q1'19 but slightly below the same period a year ago – 5.2x. Valuations took a major dip as a result of the U.S. / China trade war at the end of 2018 but have subsequently rebounded relatively on par with Q2'18 levels.
$14.0B was invested across 86 deals in all subsectors, highlighted by large capital raises across the globe from OYO Rooms, JD Health, Rappi, DoorDash, and Deliveroo.
After Lyft opened the IPO market in Q1, we saw 11 IPOs in Q2 including the highly anticipated IPOs of Pinterest, Uber, Revolve, Chewy, and The RealReal.
-Trends Worth Watching
Trend #1: The race for one-day delivery is heating up with eCommerce players investing heavily to chase Amazon.
Trend #2: Several tech unicorns have emerged in Latin America as global investors show increased focus on the region.
Trend #3: Initiatives in cloud gaming platforms have fueled new excitement around the gaming industry.
Trend #4: Strategics and financial sponsors’ appetite for eCommerce / DTC companies is heating up.
In This Issue
Key Internet Trends in Q2'19
Stifel Internet Market Update and Observations
Stifel Q2'19 Activity
Internet Deal Activity Dashboard
Internet Subsector Snapshot
Capital Markets Overview
Market Performance
M&A Activity & Trends
Private Capital Raising Activity & Trends
Stifel Internet & Digital Media Investment Banking
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Key Internet Trends in Q2'19
E-Comm 3.0 and the DTC Surge
Many DTC companies have been successful in raising private capital, which has investors asking what the end game may be given correspondingly high valuations
The recent quarter showcased investor appetite for eCommerce / DTC companies through successful IPOs from The RealReal and Revolve at premium valuations to traditional Web 1.0 businesses
However, one of the biggest acquisitions in the quarter, Edgewell / Harry’s, illustrates that many highly valued private companies see the value in a strategic partner vs. the IPO route
LatAm Unicorns Begin to Stampede
Q2'19 saw the emergence of several South American Internet businesses achieving unicorn status with recent raises from Loggi, Rappi, and Gympass
Despite the size of the Latin American Internet market, global VC firms have been relatively slow to invest heavily in the region
2018 VC funding in Latin America doubled to $2B compared to 2017 and is quadruple the $500M invested in 2016
Softbank announced its $5B Innovation Fund, which acts as the largest-ever technology fund focused solely on the fast-growing Latin American market
Gaming’s Shift to the Cloud
Recent announcements out of E3 on cloud gaming initiatives and streaming services by high profile companies (i.e., Google, Microsoft, Tencent) have fueled excitement around the gaming industry
Cloud gaming utilizes streaming technology, enabling users to play video games via a remote server, instead of a local machine (i.e., console / PC) by offloading the processing power to the server
Streaming aims to expand the addressable market, make video games more accessible by removing the upfront cost of hardware and installation, and push gaming companies further towards subscription-based models
Microsoft’s xCloud and Google’s Stadia are viewed as the early major contenders in cloud gaming
Even though we are only in the early innings of the transformation, the initiatives grow more real as 5G capabilities that support high quality streaming for gaming come to market
The Race for One-Day Delivery
As consumers become more accustomed to quick and free eCommerce delivery, the race for one-day delivery is heating up with eCommerce players investing heavily to chase Amazon
Amazon announced on its latest earnings call that 10M+ items are now available for one-day delivery, the new standard for Prime members as convenience as a purchase motivator grows in importance
Prior to Amazon’s announcement, Walmart launched a one-day delivery service of its own on ~200K items; this puts it more in competition with Target Restock, a similar offering with ~35K items
Other players in the race are investing similarly; Loggi raised $100M as it constructs a Brazil-wide logistics service enabling one-day delivery for MELI and others
Shopify also announced its move into physical distribution for its customers to help speed up delivery for retailers as more and more eCommerce players bid to offer the whole supply chain for its clients and their customers
M&A
Capital Raises
JD Health
Released
IPOs & Follow-ons
Upcoming
Owned & Operated Partnered
Online Content
Online Travel
eCommerce
Common to the market, companies are having to overcome problems relating to infrastructure and pricing; however, as an emerging market, LATAM has low legacy barriers allowing for greater opportunity for disruption and rapid adoption of innovative technologies
Unicorn Fundraises
Source: Bloomberg, Crunchbase.
New Fundraises
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Activity in Q2'19
Internet Market Update and Observations
Valuations
Internet stocks were relatively flat in Q2'19 vs. Q2'18 following the overall market rebound at the start of 2019, as the Dow and Nasdaq finished +3% and +4%, relative to their Q1'19 performances of +11% and +16%, respectively
By the end of quarter, the biggest gains were seen in Social Media +13% (Snap +30%, Twitter +6%), Online Real Estate +10% (Zillow +34%, CoStar Group +19%), FoodTech +9% (Grubhub +12%, HelloFresh +1%), and eCommerce +6% (Rakuten +25%, Boohoo +9%)
11 out of 12 Internet sectors finished in positive territory, as well as the DJIA and NASDAQ
The average Internet forward revenue multiple increased to 5.1x (vs. 4.8x in Q1'19)
IPO and Capital Markets Activity
There was little IPO activity in Q1'19 due to December 2018’s market volatility and the federal government shutdown, but public market activity has come roaring back this quarter
Q2'19 ignited what is widely expected to be a banner year of IPOs. There were 11 Internet IPOs across Online Marketplaces, Online Content, eCommerce, Online Gaming, and Subscription Services including the highly anticipated $8.1B IPO of Uber
IPO proceeds made this quarter the biggest second quarter since 2000, with Uber, Pinterest, and Chewy having $8B+ valuations at offer
This quarter also saw large public follow-on offerings from Huya ($442M), Bilibili ($373M), Carvana ($314M), and LoveSac ($103M)
Private Capital Raising Activity
Internet companies raised $14.0B in Q2'19, a slight increase from the $13.9B raised in Q2'18; the number of deals increased to (86 vs. 80) across all Internet
The number of companies raising capital increased, yet the size of the rounds was slightly smaller on average this quarter ($162M vs. $174M)
There were a number of large $1.0B+ transactions this quarter, including OYO Rooms ($1.1B), JD Health ($1.0B), and Rappi ($1.0B)
The largest private capital raises from this quarter were diverse across geographies, with considerable activity in the U.S., China, and India
M&A Activity
M&A volume decreased by 84% in Q2'19 vs. Q2'18 ($7.2B vs. $43.9B), and the number of deals (with disclosed valuations) decreased (20 vs. 29)
Where Q2'18 saw mega deals by strategics such as Walmart acquiring Flipkart for $20.8B and Alibaba acquiring Ele.me for $9.5B, the two biggest deals of Q2'19 involved Apollo Global Management acquiring Shutterfly ($2.8B) and Edgewell Personal Care acquiring Harry’s ($1.4B)
Deal activity was concentrated in eCommerce, Online Gaming, and Online Marketplaces:
Social Media 13%
Real Estate 10%
NTM Revenue Multiple to 5.1x
Sub. Services 2%
SaaS (2%)
Top Movers (Q2'19) Laggards (Q2'19) IPOs Follow-Ons & Converts
$233M $247M
$300M $623M
$2.8B $1.4B
Note: This report covers all capital raises and acquisitions with announced values greater than or equal to $25M in the Internet & Digital Media sector.
(Yunji)
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Electronic Entertainment Expo (E3) Dinner – Los Angeles
At the 2019 Electronic Entertainment Expo, Stifel hosted an industry dinner with Drew Crum, Stifel’s gaming analyst who has covered the sector since 2005, and several leading industry players including:
Stifel Cross Sector Insight Conference (CSI) – Boston
Stifel Q2'19 Activity
~2,000 Attendees
~365 Participating
Companies
~140 Financial Sponsor
Attendees
~4,600 One-on-One
Meetings
The 2019 CSI Conference included various thought-provoking panels addressing a range of timely topics:
Automation & Robotics
5G Technology
Emerging Video
Evolving Cannabis Industry
For highlights from this year’s event
please click here
Keynote Speakers:
Roger McNamee, Author of Zucked
Barry Bannister, Stifel Chief Equity
Strategist
Old Dominion Stifel Chief Equity strategist, Barry Bannister
Keynote Speakers Private Concert
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Source: 451 Research, Pitchbook, Capital IQ.
Note: This report covers all capital raises and acquisitions with announced values greater than or equal to $25M in the Internet & Digital Media sector.
Internet Deal Activity Dashboard
Date Company HQ Amount
($M)
4/1 $1,100
5/10 JD
Health 1,000
4/30 1,000
5/23 600
5/20 575
Date Acquirer Target Amount
($M)
6/11 $2,758
5/9 1,370
6/13 623
5/1 415
4/23 300
80
86
Q2'18 Q2'19
# Disclosed Deals
Date 3/28
Company
Amount ($M) 2,556
Market Cap @ Pricing ($M)
$24,633
$5.6B
$2.9B
$2.2B
$0.9B
$0.7B
$0.6B$0.1B $0.1B
$0.1B
Q2'19 Financing Transactions
Q2'19 IPOs
Q2'19 M&A Transactions
$4.3B
$0.9B
$0.9B
$0.7B
$0.2B$0.2B
$14.0B
Financing
$7.2B
M&A
$9.7B
$1.4B
$0.5B
$0.4B $0.1B
$12.2B IPO
Marketplaces Online Real Estate eCommerce Social Media Online Travel
Subscriptions Online Content Online Gaming Online Marketing FoodTech
5
11
Q2'18 Q2'19
# Disclosed Deals
$13.9 $14.0
Q2'18 Q2'19
Volume ($B)
29
20
Q2'18 Q2'19
# Disclosed Deals
$7.9
$12.2
Q2'18 Q2'19
Volume ($B)
Q2'19 M&A Transactions
Date Company Amount
($M) Mkt. Cap @ Pricing
5/9 $8,100 $75,463
4/17 1,425 10,272
6/13 1,023 8,769
5/2 352 2,022
6/28 345 1,658
20.8
9.5
13.6
$43.9
$7.2
Q2'18 Q2'19
Volume ($B)
(Ele.me)
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FoodTech 37% 53% 0% 3% 1 0
Online Real Estate
23% 54% 15% 18% 4 0
eCommerce 14% 60% 28% 30% 17 4
Online Marketplaces
20% 43% 5% 5% 34 7
Subscription Services
12% 73% 13% 17% 8 1
Online Content
25% 69% 8% 13% 5 1
Online Gaming
13% 76% 28% 30% 2 4
Online Travel 20% 63% 26% 27% 10 2
Social Media 4% 82% 18% 19% 2 1
Online Marketing
18% 63% 10% 13% 3 0
Source: FactSet Research Systems and Capital IQ as of 6/28/19.
Note: All EBITDA multiples over 40.0x or below 0.0x are N.M.
Internet Subsector Snapshot
Public Comparables
Median Comp Set
2019E EBITDA Margins
2020E EBITDA Margins
# of Deals (PP / M&A)
2019E Gross
Margins
2019E YoY Rev. Growth
EV / 2019E Revenue
EV / 2019E EBITDA
EV / 2019E Revenue Median (3.4x)
EV / 2019E EBITDA Median (15.9x)
Online Travel composite includes: AMADY, EDR, EXPE, DESP, MMYT, BKNG, TZOO, TRIP, TRVG.
FoodTech composite includes: APRN, DHER, HFG, GRUB, JE, MMM, TKWY, WTRH.
Online Content composite includes: IAC, LFRG, MTCH, MOGU, PINS, LOV, TTGT.
Online Marketing composite includes: CRTO, GRPN, ICLK, MCHX, PERI, QNST, RUBI, SOGO, TTD, TLRA, TRUE.
eCommerce composite includes: AMZN, ASC, BOO, BTOW3, CHWY, CVNA, H24, KOOV, LOVE, OSTK, PDD, RAKUTEN, QRTE.A, SECO, SFIX, W, ZAL.
Marketplaces composite includes: ANGI, AUTO, CARS, CAR-AU, CARG, DHX, EB, EBAY, ETSY, EVER, FTCH, GRUB, JE, LC, LYFT, TREE, MELI, MEITUAN, RBZ, SEK, SSTK, REAL, TRUE, TC, UBER, UXIN, UPWK, WEW.
Sub. Services composite includes: ALRM, APRN, CRCM, CHGG, EHTH, HFG, IQ, JCOM, LOV, MTCH, MEET, MMM, NFLX, SPOT, STMP, SFIX, SVMK, TME, TRUP.
Gaming includes: ATVI, BILI, CDR, CDM, DIB, EA, GLUU, HUYA, ROVIO, SCPL,SE, SUMO, TTWO, TM17, UBI, ZNGA.
Social Media: FB, KAKAKU, LN, MEITU, RENN, SINA, SNAP, TWTR, WB, O1BC, YELP.
Real Estate: CSGP, PURP, REA, RP, RLGY, RDFN, RMV, G24, SFUN, OTMP, ZG.
1.2x
5.8x
1.8x
3.9x
4.4x
3.2x
4.5x
2.0x
3.6x
3.2x
10.1x
14.6x
14.8x
15.2x
15.6x
16.2x
17.9x
18.3x
20.8x
22.4x
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Recent Market Activity
Source: Dealogic and FactSet as of 6/28/19.
Includes all SEC registered transactions with base deal value over $20M.
Capital Markets Overview
Key TMT Market Activity
Markets
Volatility in Q2'19 picked up, as the markets reacted to conflicting sentiment regarding the trade talks between the U.S. and China
Despite some selling in mid-May due to uncertainty surrounding economic growth, and a surge in trade tensions, the Fed’s dovish tone on monetary policy powered technology stocks, and the indices as a whole, back to all-time highs
Both the Dow and the S&P 500 reached new all time trading highs in the latter half of Q2'19 Heading into Q3'19 we can expect investors to view the Technology sector with optimism, but to
proceed with caution as trade negotiations continue between the world’s largest economies
IPOs
Follow-Ons
TMT was a leader in the 2018 follow-on market, with $22.7B in proceeds raised. A total of 77 deals priced, making it the second most active sector behind Healthcare (238 deals)
Investors continue to reward performance and liquidity in transactions and aftermarket performance 45 TMT FOs have priced YTD, with $16.0B in proceeds raised This is in line with the $15.2B in proceeds raised in 2018YTD from 49 offerings
Converts
25 TMT Convertibles have priced YTD, with $10.5B in proceeds raised This is behind the $17.5B in proceeds raised in 2018YTD from 36 offerings However, issuance has picked up in recent weeks and the attractive terms being achieved by Tech
issues are indicative of high demand in the market
TMT led the 2018 IPO market in terms of dollar value, with $20.6B in proceeds raised. A total of 50 deals priced, making it the third most active sector behind Healthcare (73 deals) and Financials (61 deals)
Compelling signs that the Technology IPO strength should continue into the next quarter include the recent success of new issues as well as the recent gains of technology stocks despite the headwinds posed by market volatility and trade concerns
25 TMT IPOs have priced YTD, with $19.2B in proceeds raised. 23/25 priced within / above the filing range
2019 has seen a number of large and high profile TMT IPOs price, including Lyft ($2.6B), Zoom ($0.9B), Pinterest ($1.6B), Uber ($8.1B), Crowdstrike ($0.7B), and Chewy ($1.2B)
Nasdaq: 8,006.2 1 Week Change: (0.3%) 1 Month Change: 5.2% 1 Quarter Change: 3.6% 1 Year Change: 6.6%
VIX: 15.1 1 Week Change: (2.1%) 1 Month Change: (13.8%) 1 Quarter Change: 10.0% 1 Year Change: (6.3%)
DJIA: 26,600.0 1 Week Change: (0.4%) 1 Month Change: 4.9% 1 Quarter Change: 2.6% 1 Year Change: 9.6%
Russell: 1,566.6 1 Week Change: 1.1% 1 Month Change: 4.2% 1 Quarter Change: 1.7% 1 Year Change: (4.7%)
VIX: 15.1 1 Week Change: (2.1%) 1 Month Change: (13.8%) 1 Quarter Change: 10.0% 1 Year Change: (6.3%)
Indexed Price Performance Volatility Index
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Market Performance
Eleven out of twelve sectors within Internet have performed positively over the past three months, as well as the NASDAQ and DJIA. Market performance was mixed across Internet sectors
Social Media was the top performing sector this quarter led by SNAP (+30%) following research upgrades and price target increases, MAU stabilization, and a relative lack of direct scrutiny from global regulators
Online Real Estate remained positive bolstered by Zillow (+34%) which reported faster growth than expected in its homes business. CoStar Group (+19%) also outperformed for the quarter driving a series of research upgrades
eCommerce saw disparate returns across its constituents. Rakuten (+25%) led the sector following their announcement of a partnership with JR East to promote cashless payments and deal with NEC and Altiostar to forge a 5G radio network. Boohoo (+9%) delivered strong annual results while highlighting the potential to achieve loftier margins. Carvana (+8%) witnessed substantial growth to start the quarter, but fell since then after reporting another earnings miss
Some Online Travel constituents have struggled in Q2 including TripAdvisor (-10%), MakeMyTrip (-10%), and Despegar (-7%), while others have persisted. Notably, TravelZoo (+15%) reported significant growth in first quarter profitability attributable to an update made to combine their hotel and flight booking platforms
Leading the Marketplaces sector was DHI Group (+47%), which reported strong quarterly growth and received an unsolicited merger proposal from Sakthi Global. MercadoLibre (+20%) reported strong payments growth and improved profitability driving upgrades to price targets
Source: FactSet Research Systems. Online Travel composite includes: AMADY, EDR, EXPE, DESP, MMYT, BKNG, TZOO, TRIP, TRVG. Internet Leaders composite includes: BABA, AMZN, EBAY, FB, GOOGL, LYFT, NFLX, TENCENT. FoodTech composite includes: APRN, DHER, HFG, GRUB, JE, MMM, TKWY, WTRH. Online Content composite includes: IAC, LFRG, MTCH, MOGU, PINS, LOV, TTGT. Online Marketing composite includes: CRTO, GRPN, ICLK, MCHX, PERI, QNST, RUBI, SOGO, TTD, TLRA, TRUE. SaaS composite includes: ALRM, APPF, TEAM, BOX, CARB, DBX, FIVN, LPSN, RP, CRM, ZEN. eCommerce composite includes: AMZN, ASC, BOO, BTOW3, CHWY, CVNA, H24, KOOV, LOVE, OSTK, PDD, RAKUTEN, QRTE.A, SECO, SFIX, W, ZAL. Marketplaces composite includes: ANGI, AUTO, CARS, CAR-AU, CARG, DHX, EB, EBAY, ETSY, EVER, FTCH, GRUB, JE, LC, LYFT, TREE, MELI, MEITUAN, RBZ, SEK, SSTK, REAL, TRUE, TC, UBER, UXIN, UPWK, WEW. Sub. Services composite includes: ALRM, APRN, CRCM, CHGG, EHTH, HFG, IQ, JCOM, LOV, MTCH, MEET, MMM, NFLX, SPOT, STMP, SFIX, SVMK, TME, TRUP.
Gaming includes: ATVI, BILI, CDR, CDM, DIB, EA, GLUU, HUYA, ROVIO, SCPL,SE, SUMO, TTWO, TM17, UBI, ZNGA.
Social Media: FB, KAKAKU, LN, MEITU, RENN, SINA, SNAP, TWTR, WB, O1BC, YELP.
Real Estate: CSGP, PURP, REA, RP, RLGY, RDFN, RMV, G24, SFUN, OTMP, ZG.
FoodTech
9%
Social Media
13%
Real Estate
10%
Sub. Services
2%
SaaS
(2%)
Gaming
3%
Online Content
3% Marketplaces
3%
Online Travel
5%
eCommerce
6%
Online Marketing
6%
DJIA
3% Internet Leaders
2%
NASDAQ
4%
+40%
+30%
+20%
+10%
0%
-10%
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Date
AnnouncedAcquirer Target
Enterprise
Value ($M)
EV / LTM
Revenue
EV / LTM
EBITDA
6/11/19 $2,758 1.3x 8.3x
5/9/19 1,370 N.A. N.A.
6/13/19 623 N.A. N.A.
5/1/19 415 N.A. 15.5x
4/23/19 300 N.A. N.A.
5/30/19 247 N.A. N.A.
4/11/19 233 5.7x 15.0x
4/30/19 200 N.A. N.A.
4/16/19 200 N.A. N.A.
6/12/19 160 N.A. N.A.
5/31/19 122 1.2x N.A.
Source: 451 Research, Capital IQ, Pitchbook, Company websites.
Note: Data reflects all capital raises and acquisitions with announced values greater than or equal to $25M in the Internet & Digital Media sector.
Note: All EBITDA multiples over 40.0x or negative are N.M.
M&A Activity & Trends
Internet Convergence Maintains Course
eCommerce had the strongest showing this quarter comprising over half of total deal value (60%), Online Gaming and Marketplaces constituted 13% and 12% of total deal value, respectively, while Travel, Online Content, Subscription Services, and Social Media shared the remaining 15% of total deal value for the quarter
A few transactions to highlight:
6/10/19 – Apollo Global Management acquired online print service company Shutterfly in a deal that valued the Company at $2.8B or $51.00 / share
- Valuation was 8.3x LTM EBITDA and 1.3x LTM revenue, representing a 13% premium from its $45.22 share price on February 5, 2019, the last day of trading before announcing it was exploring a sale
- Apollo plans to merge Shutterfly with rival Snapfish, whose owners will become minority shareholders in the combined business
6/13/19 – Gamesys, a game developer and operator, was acquired by JPJ Group for $623M
- The acquisition of Gamesys, a U.K.-based operator of several online slots, casino, and bingo sites, will enable JPJ Group to cut its reliance on third-part tech platforms and allow them to leverage Gamesys’ brands for international growth
5/09/19 – Edgewell Personal Care Company made a $1.4B acquisition of Harry’s, a men’s grooming company specializing in shaving products and manufacturing its own line of razors and replacement blades on a subscription based model
4/23/19 – Getaround acquired European ride-share startup Drivy for $300M
- Fueled by a $300M Series D raised by SoftBank last August, the startup acquired Drivy to expand its European presence, as the Paris-headquartered car sharing company operates in 170 European cities
- Combined, Getaround now has more than 5M users as it seeks to further capitalize on the mobility revolution
Recent Internet M&A Activity
Q2'19 YoY deal value dropped significantly ($7.2B vs. $43.9B), as well as deal volume (20 vs. 29); however, two deals contributed to 69% of the total deal value in Q2'18 (Walmart’s acquisition of Flipkart and Alibaba’s acquisition of Ele.me) skewing YoY data. Regardless, quarterly YoY deal value and volume both saw a significant decline
Median M&A multiples declined in the sequential quarter from 3.6x LTM revenue and 15.1x LTM EBITDA in Q1 of this year
1.3x Median
EV / LTM Revenue EV / LTM EBITDA
15.0x
Select Transactions
@Leisure
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Date
AnnouncedTarget Deal Size ($M)
Post Money
Valuation ($M)Segment Investors
4/1/19 $1,100 5,000 Online Travel SoftBank
5/10/19 1,000 N.A. eCommerce
Baring Private Equity Asia, China
International Capital Corporation,
CITIC Capital
4/30/19 1,000 N.A.Online
MarketplacesPalm Drive Capital, SoftBank
5/23/19 600 12,600Online
Marketplaces
Darsana Capital Partners, Sands
Capital Ventures
5/20/19 575 4,000Online
Marketplaces
Amazon, Fidelity Investments,
Greenoaks Capital Partners,
T. Rowe Price
6/15/19 500 4,500 Online Real Estate
General Atlantic, Sequoia Capital,
Tencent Holdings, Tiantu
Investments International
6/3/19 500 N.A.Online
Marketplaces
Fresh Capital (China), JD.com,
Morningside Venture Capital
4/30/19 500 N.A.Online
MarketplacesPaypal
4/3/19 500 1,000 Online Travel Mahindra & Mahindra
5/16/19 484 N.A. Online Travel
GIC, Heartcore Capital, Korelya
Capital, Lakestar, SoftBank,
Temasek, Zürcher Kantonalbank
6/12/19 300 1,000Subscription
ServicesSoftBank
6/27/19 250 4,000 Online Travel
Andreessen Horowitz, Lightspeed
Venture Partners, SGVC, Zeev
Ventures
5/23/19 250 N.A. Online Travel Tencent Holdings
5/6/19 250 N.A. Online Content
23 Capital, Soros Fund
Management, Monroe Capital,
Fortress
6/18/19 230 1,000Online
Marketplaces
Avenir Growth Capital, Eurazeo,
Prime Ventures
4/10/19 225 1,230 Online Travel SoftBank
4/2/19 220 N.A. Online Real EstateFirstMark Capital, Accomplice,
Juxtapost
5/15/19 200 N.A. eCommerceSoftBank Vision Fund, KTB, Tiger
Global, Sequoia Capital
5/7/19 200 1,500Online
MarketplacesVolkswagen
6/6/19 182 N.A. Online Content ByteDance
4/10/19 181 511Online
MarketplacesLithia Motors
6/10/19 180 1,000 Online TravelAgoda Company, Booking
Holdings, GIC Private
Source: 451 Research, Capital IQ, Pitchbook, Company websites.
Note: Data reflects all capital raises and acquisitions with announced values greater than or equal to $25M in the Internet & Digital Media sector.
Private Capital Raising Activity & Trends
Macro Private Placement Trends
$14.0B was invested into Internet businesses this quarter, maintaining the trend from Q2'18 as another strong quarter in the year
Deal count slightly increased in the quarter (86) compared to Q2'18 (80) with an aggregate deal value of $14.0B (vs. $13.9B last year); investors remain active and continue to invest in high quality, high growth businesses across the sector
Despite Internet companies continuing to raise private capital through late-stage investment rounds, Q2'19 has been a banner quarter for companies exiting to the public markets via IPOs
Valuation & Sector Trends
Median post-money valuation for private companies continued to climb ($1.0B vs. $625M Q2'18), however the average disclosed post-money valuation decreased to $1.6B in Q2'19 vs. $2.1B last year
17 unicorns raised additional capital in Q2'19 – all up rounds compared to their last fundraisings
Investors continued to fund Marketplaces / Gig Economy businesses to the tune of $5.9B (42% of total) across 34 deals (40% of total); Online Travel also received a large portion of the total capital raised in Q2'19 highlighted by OYO Rooms, GetYourGuide, TripActions, Klook, and Zoomcar
SoftBank led a number of the largest capital raises (OYO Rooms, GetYourGuide, Gympass, Klook); roughly half of the $100B Vision Fund’s dry powder has been spent in less than two years
Most Active Subsectors in Internet:
Select Transactions
eCommerce
(17 Deals)
Marketplaces
(34 Deals)
Guazi
Danke Apartments
JD
Health
(Mafengwo)
11
100 135 190
0 137 134
35 31 32
169 176 137
228 114 0
175 175 175
202 140 184
120 178 87
0 72 122
107 33 70
102 102 153
212 0 47
255 204 0
0 112 60
204 215 234
94 110 102
Palette
RGB
values
Stifel collectively refers to Stifel, Nicolaus & Company, Incorporated and other affiliated broker-dealer subsidiaries of Stifel Financial Corp.
Stifel Internet & Digital Media Investment Banking
Stifel Internet & Digital Media Team
ANDRE MANCL
Managing Director,
Head of Internet & Digital Media
SETH RUBIN
Managing Director,
Head of U.S. Equity Capital Markets
CHRIS AULD
Managing Director,
Leveraged Finance
ZEESHAN MEMON
Managing Director,
Technology Financial Sponsors
JASON STACK
Managing Director,
Technology Mergers & Acquisitions
LEWIS CHIA
Director,
Equity Capital Markets
DAVID LAMB
Director,
Internet & Digital Media
ANTHONY YAMSON
Vice President,
Internet & Digital Media
NINA YANG Director,
Asia Technology
YURI LEE
Associate,
Internet & Digital Media
Recent Internet & Digital Media Transactions
PEG JACKSON
Managing Director,
Internet & Digital Media
BILL BUNTING
Managing Director,
Head of Private Placements
PETER GLOBOKAR
Managing Director,
European Technology
WALDO GLASMAN
Managing Director,
Head of Latin America
COLE BADER
Managing Director,
Head of Mergers & Acquisitions and Co-Head of Global Technology Group
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