First Round Capital sees successful SPAC merger, IPO

More than five years ago, First Round Capital announced it was leading a Series A investment round into a startup named Clover Health.

In announcing the investment, Partner Josh Kopelman said: “First Round is a seed stage firm, and our average initial investment has remained $500K–600K for the last 8+ years. Our $4M investment in Clover is the largest initial investment we’ve ever made in our decade-long history (In fact, it’s more than double our previous largest investment).”

“The unique nature of our investment here underscores exactly how unique we think Clover is. It deserves to break the mold in more ways than one. Its mission to improve health care and drive down medical costs is big, ambitious, and vital.”

Clover’s goal was to deliver a lower cost, improved Medicare Advantage experience for its members., relying on the use of data and analytics.

After testing its business model in some New Jersey counties, Clover now serves selected counties in Arizona, Georgia, Mississippi, New Jersey, Pennsylvania, South Carolina, Tennessee, and Texas..

Last week, Social Capital Hedosophia Holdings Corp. III , a SPAC, merged with Clover Health, forming a new public company under the Clover Health Investments Corp (NASDAQ:CVLOV) name.

Clover, which had raised $925 million from investors prior to its SPAC merger, is expected to gain $1.2 billion in cash through the merger. It ended Friday with a market cap near $7 billion.

Also, in late December another First Round portfolio company, Silicon Valley fintech lender Upstart (direct loans to consumers) went public. It jumped 47% on its first day of trading. As of Friday, Upstart had a market cap of $3.8 billion; First Round had owned 5.2% prior to the offering. Upstart also uses predictive data, in this case to assess the likelihood of loan repayment.

Next up is a big one for First Round: gaming platform Roblox. It delayed its IPO into 2021, and just did another pre-IPO investment at a valuation of $29.5 billion.

Now public, Bentley Systems starts $100 million venture fund, reports quarterly results.

Tom Paine

Exton-based Bentley Systems, coming off its successful IPO (Nasdaq: BSY), has committed $100 million to a new venture fund aimed at developing infrastructure “digital twins”.

Bentley plans to invest in promising technology companies addressing the emerging opportunity for infrastructure digital twin solutions for roadways, railways, waterways, bridges, utilities, industrial facilities, and other infrastructure assets.

“Taking advantage of the momentum from Bentley Systems’ initial public offering, we are excited to expand our Acceleration Initiatives by formally launching the Bentley iTwin Ventures fund to support the growth of entrepreneurial companies dedicated to infrastructure digital twin solutions,” said Greg Bentley, CEO of Bentley Systems, in a statement.

“Our iTwin Platform provides a scalable open-source foundation for technical and commercial innovation that will empower a vibrant ecosystem to creatively combine and connect what digital twins now make possible for infrastructure constituents. Proprietary analytics, data services, benchmarking, and infrastructure-as-a-service”. commercial models, for instance, are not in Bentley Systems’ direct scope, but we are glad to have a stake in bootstrapping these future successes. Here’s to the fullest going-digital ecosystem for infrastructure digital twins!”

Bentley Systems is working with venture capital firm Touchdown Ventures, which has an office in Haddonfield, to establish Bentley iTwin Ventures, and one investment has already been made

Bentley completed its IPO in September, raising almost $236.5 million at $22 per share. its shares now trade on the NASDAQ at $33.80 per share, almost exactly what it closed at on its first trading day, for a market cap of $8.9 billion. Proceeds went to selling shareholders (employees and investors), not the company’s Treasury or members of the founding Bentley brothers.

Bentley reported its first quarterly results since the IPO yesterday. Total revenues were $203.0 million, up 8.8% year-over-year; GAAP net income was $5.8 million, compared to $20.4 million for the same period last year. The decline in net income was due primarily to IPO and restructuring expenses.

Adjusted Net Income was $51.4 million vs $39.3 million in the prior year.

In the quarter, the company took a restructuring charge of $10 million, which covered a reduction in force. Bentley announced this week that it was bringing on three new senior executives, one from SAP (general manager of SAP Marketing Cloud) and two with backgrounds at rival Autodesk.

Bentley announced yesterday a follow-on offering of 10 million shares, consisting of 8.1M issued by the company and 1.9M sold by existing stockholders of Bentley; proceeds to the company will be used for debt reduction.

Accolade files S-1 for IPO

Tom Paine

Accolade Inc. today filed an S-1 with the SEC for a planned IPO. The number of shares to be offered and the price range for the offering have not yet been determined. Accolade intends to list its common stock on the Nasdaq Global Select Market under the ticker symbol ACCD.  

Here’s the S-1: https://www.sec.gov/Archives/edgar/data/1481646/000104746920001123/a2240822zs-1.htm

Accolade offers a service usually provided to enterprises that helps guide their employees through the healthcare maze to get the care that they need. Comcast is a major customer, by itself accounting for 35% of Accolade revenue in 2019.

Accolade is jointly based in Philly (Plymouth Meeting) and Seattle. The plurality of employees (about 500) are based in Plymouth Meeting, according to. LinkedIn, out of 1174 total as of November 30, 2019 as reported by the company. Investors include Andreessen Horowitz, Carrick Capital Partners, Madrona Venture Group, McKesson Ventures, and Humana.

 Revenue is up more than 47 percent so far this year: $88.1 million for the nine months ended in November 2019, with a net loss of $49.2 million for the same period. Its fiscal year ends this month.

Accolades’ last stated valuation was around $620 million. The $100 million target for the IPO mentioned in the filing is merely a placeholder.

Tom Spann was the Founding CEO of Accolade. Now it is headed by CEO Rajeev Singh, who cofounded SaaS travel expense tracker Concur and sold it to SAP for $8.3 billion in2014.