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Internet & Digital Media continues to be a highly active category both in public and private markets

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Sector Report: Internet & Digital Media Q2 2020

EXECUTIVE SUMMARY

  • Internet & Digital Media continues to be a highly active category both in public and private markets
    • The sector witnessed successful IPOs of Warner Music Group ($1.9 billion raised on June 3rd), Vroom ($465 million raised on June 9th) and Agora ($350 million raised on June 26th)
    • In the private markets, a total of $14.3 billion in M&A volume and $14.2 billion in financing volume was announced or closed in Q2 2020
      • M&A activity was up from the same period on 2019 with 13 transactions announced in the quarter
      • Financings in 2Q 2020 were down 8% from Q2 2019, while the aggregate dollar amount was down 6%
  • Q2 M&A activity saw several multi-billion dollar deals as well as numerous transactions close in the $100 – 250 million value range; private equity accounted for ~31% of the buyers
    • Zynga’s acquisition of Peak and General Atlantic, Warburg Pincus and Ocean Link’s acquisition of 58.com (NYSE:WUBA) represent approximately $10.5 billion of deal value in Q2 2020
    • Other notable deals include: Amazon / Zoox (Automated Driving Technology), The Stagwell Group / MDC Partners (Advertising Technology) and Forge Capital / SharesPost (Mobile)
  • Several large financing rounds took place in Q2 with an aggregate of 721 financings across all stages
    • Larger financings include: Airbnb ($1 billion), Stripe ($850 million), DoorDash ($400 million) and Robinhood ($280 million)
  • From a trading perspective three sectors have lead the public trading pack: E-Commerce, Marketplaces and Social Media with year-over-year growth of 33.9%, 29.5% and 18.0%, respectively, and all trading at high 19x – low 20x EBITDA multiples
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