Friday Letter: Megadeals take hold across pond, Softbank eyes jackpot from Slack IPO, Meeker talks Internet trends

Megadeals have become commonplace in the United States, but now they are taking hold across the pond.

European megadeals trend upward

Megadeals have become commonplace in the United States, but now they are taking hold across the pond. I’ve reported various times on the increase in U.S. megadeals, which I define as round sizes of $100 million or more.

This week Berlin-based mobile marketing company Adjust announced it raised $227 million in venture funding, one of the largest rounds this year for a European startup. The jumbo investment follows two other European megadeals this year: Transferwise raised $292 million, while N26 pulled in almost $300 million.

So far this year, just 16 European companies have raised $100 million or more, or about 3 percent of the total amount of venture capital raised, according to Thomson Reuters. In all of last year, more than two dozen European companies closed megadeals.

Next IPO is no slacker

Market watchers were jubilant this week as VC-backed cybersecurity company CrowdStrike saw its share price jump 70 percent on its first day of trading this week.

The company raised $200 million in its debut at a $3 billion valuation. That’s great news for its venture backers, including Accel Partners, General Atlantic and IVP.

Next up is Slack, the workplace chat and collaboration service, which plans to launch its IPO next week, with some analysts predicting a valuation of $17 billion.

Slack has raised more than $1.3 billion from some three-dozen investors, with primary backing coming from Accel, Andreessen Horowitz, Kleiner Perkins and SoftBank Group.

Slack would be the first enterprise software company exit for SoftBank’s Vision Fund.

Meeker peers Ad spending up as freemium model gains hold

Mary Meeker is back this week with her first Internet Trends report since she left Kleiner Perkins last fall and launched her own firmBond Capital.

Mary Meeker, Kleiner Perkins Caufield & Byers
Mary Meeker. Photo courtesy of Kleiner Perkins Caufield & Byers.

Some takeaways: Internet ad spending was up in 2018, freemium business models (like Spotify) are gaining traction, interactive gaming sites grew slightly and the average time daily consumers spend daily on mobile increased while time spent on computers declined last year.

On the downside, e-commerce sales slowed, but they still towered over growth in regular retail, Meeker reported.

Download and read the whole report here: Internet Trends 2019.

Meeker made her name on Wall Street as an analyst at Morgan Stanley covering internet stocks. She began her trends report in the mid-1990s and continued to publish it annually after she joined KP in 2010. She presented her latest dispatch at the Vox/Recode Code Conference in Scottsdale, Arizona, on Tuesday.

My WABs

I am always happy to meet with sources. I was in New York most of this week, but next week I will be back in the Bay. I have a couple appointments in San Francisco and time available around each. Let’s meet to talk trends and story ideas.

Email me at agoldfisher@buyoutsinsider.com.