10 VC deals you might have missed in 2020
Many thought the COVID-19 outbreak and the economic volatility that resulted would put a damper on venture capital investing this year. But 2020 is on pace to end with a bang on several fronts, including a deluge of SPAC deals, record US fundraising activity and numerous mega-IPOs.
Beyond those headline-worthy trends, 2020 also triggered a transformation across startups, with early-stage entrepreneurs creating innovative—sometimes peculiar—products, many of which befit our new reality.
Here are some of the deals that deserve another look before the year comes to a close:
1. Pandemic pivot
Curative was founded in January to develop a new test for sepsis. Less than three months after its launch, the company pivoted its efforts to create COVID-19 tests. Every week, Curative processes more than 1 million tests authorized by the Food and Drug Administration. It operates at more than 8,000 testing sites across Texas and California, among other states.
Backed by investors including Soma Capital and Data Collective, the company raised $8.7 million in September, according to a PitchBook estimate.
2. Insect intent
Ever wondered how organic waste can be used to raise mealworms, which could then provide food for chickens and farm-raised fish?
Beta Hatch has developed that process by using insect-rearing technology to convert mealworms into high-value protein nutrients that can be used as animal feed and crop fertilizer.
Last week, the company raised $9.3 million in a round co-led by Innova Memphisand Cavallo Ventures, AgFunderNews reported. Based in the Seattle area, Beta Hatch reportedly plans to use the funding to build the largest insect farm in North America with the capacity to produce one ton of insect protein per day.
3. Mushroom magic
2020 also emphasized a need for mental health support.
Mental health startup Compass Pathways uses psilocybin, a hallucinogenic compound found in magic mushrooms, as part of a treatment for depression. In April, the British startup secured an $80 million investment from backers including Atai Life Sciences, Founders Fund and Soleus Capital.
Compass Pathways listed on the Nasdaq in September and saw its stock soar 71% on its first trading day, propelling the company’s valuation to around $1 billion, Bloomberg reported. Compass, which is also backed by Peter Thiel, reported a net loss of $41.5 million for the nine months ended Sept. 30.
4. Lab chops
By now, we know that scientists can isolate stem cells from an animal and multiply them in a lab.
One of the leading companies in that space, Eat Just, recently became the first company to get approval from Singapore to sell lab-grown meat to consumers. Eat Just also develops plant-based egg and chicken alternatives. The San Francisco-based company plans to serve fried-chicken “bites” at a restaurant in Singapore, initially in limited quantities, The Wall Street Journal reported.
Backed by investors including Khosla Ventures, Founders Fund and Bill Gates‘ VC firm Gates Ventures, Eat Just was valued at $1.25 billion in 2017. The company is looking to raise at least $200 million at a $2 billion valuation, Bloomberg reported.
5. No gym excuses
Gym closures and stay-at-home orders during the pandemic have boosted demand for at-home fitness technology.
San Francisco-based Future connects would-be gym-goers with personal trainers for guided workout sessions and offers subscription-based fitness plans.
In October, Future secured a $24 million Series B led by Trustbridge Partners at an $83.8 million valuation, according to PitchBook data. Caffeinated Capital and Kleiner Perkins also participated in the funding.
Since its founding in 2017, the company has added coaches who previously worked with professional sports teams and organizations like the New York Yankees, the NBA and the NFL.
6. Eat. Sleep. Game. Repeat.
Three-quarters of the US population plays video games, an increase of 32 million people since 2018, according to a survey conducted by The NPD Group in May. The report also highlighted that 35% of gamers said their current play time is higher than pre-pandemic levels.
Bunch is one of the startups basking in attention now that stay-at-home orders have given consumers extra time to game. The social gaming platform developer raised a $20 million Series A in September from some of the biggest names in the industry, such as Electronic Arts, Ubisoft and Riot Games.
The startup’s platform lets video gamers communicate virtually during gameplay. Bunch plans to use the new funds in part to integrate with more games.
7. Furniture on-the-go
Earlier this year, millions of remote workers found themselves desperate for a sturdy couch and a decent office chair that does not break their back by the end of day.
Launched in 2018, Los Angeles-based Fernish provides a furniture subscription service that lets users sign up for a monthly plan that allows them to buy, swap, or return furniture to the company once their subscription ends.
In July, Fernish raised a $15 million Series A led by Khosla Ventures, at a $33 million valuation, according to PitchBook data. The company’s backers also include PLG Ventures and Alumni Ventures Group.
8. Make it last
Recycled cotton is often unsuitable for use by luxury retail brands due to the short length of fibers that makes it difficult to spin.
But Natural Fiber Welding has created patented technology to tackle this challenge. Its process welds short fibers into longer fibers resulting in recycled cotton, wool and silk, intended to create durable goods and textiles. In August, Ralph Lauren led a $13 million round in the company, roughly a year after the luxury retailer appointed its first chief sustainability officer.
9. Relationship woes
Thanks to stay-at-home orders, many couples found themselves confined to the same space for months, which perhaps raised some co-habitating tensions.
Relationship wellness app Relish provides troubled couples with customized relationship-repairing activities and counseling from licensed coaches. In April, the company raised $5 million in a Series A led by Bessemer Venture Partners, and plans to use some of the fresh funding to add relationship counselors and marriage therapists to the platform.
Founded in 2018, Relish has added “quarantine-compliant” date night ideas such as cooking challenges, stargazing tips and customized quizzes designed to gain insight into one’s significant other.
10. Drink up
Alcohol consumption by Americans is up 14% from 2019, according to a report published by JAMA Network Open in September.
One online alcohol marketplace catering to the increase in demand, Drizly, experienced 350% growth year-over-year as of August. The company, which delivers drinks to your door in less than an hour, operates in more than 1,400 cities across North America.
In August, Drizly secured $50 million in a round led by Avenir, with participation from Tiger Global.
An earlier version of this article left out the name of one of Beta Hatch’s co-lead investors. The round was co-led by Innova Memphis and Cavallo Ventures. (Dec. 17, 2020).
An earlier version of this article incorrectly identified Ikea as an investor in Fernish. The company had participated in Ikea’s corporate accelerator in 2019. The article has also been updated with Khosla Ventures being Fernish’s lead Series A investor. (Dec. 18, 2020).
Featured image by Megan Woodard/PitchBook News