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BlackRock PEP strikes €509m ELTIF co-investment fund close, eyes infra next

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BlackRock Private Equity Partners has hit a €509m final close for its latest long-term investment fund targeting global direct co-investments.

The firm said BlackRock Private Equity Opportunities ELTIF is one of the largest European Long-Term Investment Funds raised to date.

It said the vehicle is its first under its ELTIF platform, which aims to regularly bring new private market products to its European client base.

European ELTIF regulation requires funds to observe strict limitations on its use of leverage and derivatives, as well as avoiding short selling.

BlackRock PEP says it focuses on consolidation, corporate carve-outs and family owned or small-cap opportunities, with key sectors including media and technology, healthcare and industrial & business services.

Russ Steenberg, managing director and global head of BlackRock PEP, said, “We are delighted to be closing one of the largest Private Equity ELTIFs in Europe, a milestone achievement by BlackRock Private Equity Partners.

“This fund is intended to provide both wealth and institutional clients the opportunity to invest in the real economy, supporting sustainable growth in Europe.

“This successful close demonstrates the strength of the BlackRock Alternative Investors ecosystem, in which clients benefit from differentiated sourcing and diverse deal flow, a strong investment and risk culture, alongside market leading data insights and a fully integrated ESG strategy.”

BlackRock said the success of the private equity strategy means it now intends to launch additional strategies each year, beginning with infrastructure.

Copyright © 2021 AltAssets

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Source: https://www.altassets.net/private-equity-news/by-region/europe-by-region/western-europe-europe-by-region/blackrock-pep-strikes-e509m-eltif-co-investment-fund-close-eyes-infra-next.html

Private Equity

Is there a creed in venture capital?

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How should venture capitalists and corporate innovators assess Din Djarin, the protagonist of The Mandalorian? He’s introduced as a bounty hunter, a mercenary vocation in the Star Wars mythos that has been reserved primarily for villains.

One of the most interesting aspects of Jon Favreau’s show is how Din Djarin wrestles with the orthodoxy of his Mandalorian beliefs. His insistence on honor makes the character an appealing hero, and his character’s growth is demonstrated by when he chooses to be flexible versus when he holds fast to the rules he believes.

Although “This is the way” emerged as the show’s quotable soundbite, there is another line that’s more relevant to venture capital and corporate innovation: “You’re changing the deal.” Din Djarin uses this phrase to spar with adversaries who try to advance their objectives by disregarding clearly understood agreements.

Enforcement is so unusual in the world of startups that I consider it a mostly dead-end path.

Of course, terms change in venture capital and entrepreneurship all the time, with investors and entrepreneurs finding themselves in Din Djarin’s position.

This challenge is built into the very structure of venture capital fund raising, in which a Series A financing is usually followed by Series B, and then Series C, and each of these transactions frequently adds, subtracts, and modifies terms, changing the deal from the perspective of the startup and existing investors.

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Source: https://techcrunch.com/2021/05/13/is-there-a-creed-in-venture-capital/

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Private Equity

Bring your old clothes and this in-store recycling machine will turn them into something new in 1 day

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Ecommerce

Brazil’s Divibank raises millions to become the Clearbanc of LatAm

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Divibank, a financing platform offering LatAm businesses access to growth capital, has closed on a $3.6 million round of seed funding led by San Francisco-based Better Tomorrow Ventures (BTV).

São Paulo-based Divibank was founded in March 2020, right as the COVID-pandemic was starting. The company has built a data-driven financing platform aimed at giving businesses access to non-dilutive capital to finance their growth via revenue-share financing.

“We are changing the way entrepreneurs scale their online businesses by providing quick and affordable capital to startups and SMEs in Latin America,” said co-founder and CEO Jaime Taboada. In particular, Divibank is targeting e-commerce and SaaS companies although it also counts edtechs, fintechs and marketplaces among its clients.

The company is now also offering marketing analytics software for its clients so they can “get more value out of the capital they receive.”

A slew of other investors participated in the round, including existing backer MAYA Capital and new investors such as Village Global, Clocktower Ventures, Magma Partners, Gilgamesh Ventures, Rally Cap Ventures and Alumni Ventures Group. A group of high-profile angel investors also put money in the round, including Rappi founder and president Sebastian Mejia, Tayo Oviosu (founder/CEO of Paga, who participated via Kairos Angels), Ramp founder and CTO Karim Atiyeh and Bread founders Josh Abramowitz and Daniel Simon.

In just over a year’s time, Divibank has seen some impressive growth (albeit from a small base). In the past six months alone, the company said it has signed on over 50 new clients; seen its total loan issuance volume increase by 7x; revenues climb by 5x; customer base increase by 11x and employee base by 4x. Customers include Dr. Jones, CapaCard and Foodz, among others.

“Traditional banks and financial institutions do not know how to evaluate internet businesses, so they generally do not offer loans to these companies. If they do, it is generally a long and tedious process at a very high cost,” Taboada said. “With our revenue-share offering, the entrepreneur does not have to pledge his home, drown in credit card debts or even give up his equity to invest in marketing and growth.”

For now, Divibank is focused on Brazil, considering the country is huge and has more than 11 million SMEs “with many growth opportunities to explore,” according to Taboada. It’s looking to expand to the rest of LatAm and other emerging markets in the future, but no timeline has yet been set.

As in many other sectors, the COVID-19 pandemic served as a tailwind to Divibank’s business, considering it accelerated the digitalization of everything globally.

“We founded Divibank the same week as the lockdown started in Brazil, and we saw many industries that didn’t traditionally advertise online migrate to Google and Facebook Ads rapidly,” Taboada told TechCrunch. “This obviously helped our thesis a lot, as many of our clients had actually recently went from only selling offline to selling mostly online. And there’s no better way to attract new clients online than with digital ads.”

Divibank will use its new capital to accelerate its product roadmap, scale its go-to-market strategy and ramp up hiring. Specifically, it will invest more aggressively in engineering/tech, sales, marketing, credit risk and operations. Today the team consists of eight employees in Brazil, and that number will likely grow to more than 25 or 30 in the coming 12 months, according to Taboada.

The startup is also developing what it describes as “value additive” software, aimed at helping clients better manage their digital ads campaigns and “optimize their investment returns.”

Looking ahead, Divibank is working on a few additional financial products for its clients, targeting the more than $205 billion e-commerce and SaaS markets in Latin America with offerings such as inventory financing and recurring revenue securitizations. Specifically, it plans to continue developing its banking tech platform by “automating the whole credit process,” developing its analytics platform and building its data science/ML capabilities to improve its credit model.

Jake Gibson, general partner at Better Tomorrow Ventures, noted that his firm is also an investor in Clearbanc, which also provided non-dilutive financing for founders. The company’s “20-minute term sheet” product, perhaps its most well-known in tech, allowed e-commerce companies to raise non-dilutive marketing growth capital between $10,000 to $10 million based on its revenue and ad spend.

“We are very bullish on the idea that not every company should be funded with venture dollars, and that lack of funding options can keep too many would-be entrepreneurs out of the market,” he said. “Combine that with the growth of e-commerce in Brazil and LatAm, and expected acceleration fueled by COVID, and the opportunity to build something meaningful seemed obvious.”

Also, since there aren’t a lot of similar offerings in the region, Better Tomorrow views the space that Divibank is addressing as a “massive untapped market.”

Besides Clearbanc, Divibank is also similar to another U.S.-based fintech, Pipe, in that both companies aim to help clients with SaaS, subscription and other recurring revenue models with new types of financings that can help them grow without dilution.

“Like the e-commerce market, we see the SaaS, and the recurring revenues markets in general, growing rapidly,” Taboada said.

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Source: https://techcrunch.com/2021/05/12/brazils-divibank-raises-millions-to-become-the-clearbanc-of-latam/

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Private Equity

NASA, DoD services provider Engineering Research and Consulting bought by Brightstar Capital

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Brightstar Capital Partners has picked up a majority stake in US Department of Defense and NASA services provider Engine

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Source: https://www.altassets.net/private-equity-news/by-news-type/deal-news/nasa-dod-services-provider-engineering-research-and-consulting-bought-by-brightstar-capital.html

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