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It's the holiday season, which means it's time for family, friends, food and fun. If it's your job to read and write about venture capital and private equity—ahem—it's also time to try to figure out what the heck happened this year.
We knew 2019 could be a wild year before it even began, with a potentially historic slate of unicorn IPOs on the docket and a long-running bull market that's left LPs flush with cash, helping contribute to floods of new capital coming into VC and PE. And wild it was. More than ever before, it seemed like news from the private markets permeated the broader zeitgeist, whether it was famous politicians taking buyout firms to task, a pro football league backed by VCs or one of the biggest pop stars in the world calling out The Carlyle Group.
Startups, venture capitalists and buyout firms were busy. And the world took notice.
With the year (and the decade) almost done, I wanted to look back at my favorite moments from our latest trip around the sun—not necessarily the biggest deals and funds, but the events that fascinated and entertained me the most. So without further ado, here are 12 things you need to know from 2019:
1. WeWork's meltdown
In early August, WeWork was marching toward a massive public offering that was to be the capstone on a record-setting year of unicorn IPOs. In the less than five months since, it all fell apart in truly spectacular fashion. The co-working company collapsed into a puddle of palace intrigue and schadenfreude, losing more than 80% of its value (as well as its CEO) in a self-inflicted catastrophe the likes of which the VC world has rarely seen. The company is now owned by SoftBank, and it has a newfound aversion to setting piles of money on fire. Adam Neumann now has a lot more time to surf.
It proved to be a seismic event throughout Silicon Valley, causing many VCs to question whether they'd grown too comfortable with heavy losses and granting concessions to founders that in some cases made those founders close to untouchable. The year began with boundless optimism about potential IPOs from names like Uber, Lyft, Slack, Pinterest and WeWork. It ended with a whimper.
2. Pols pick on PE
Political progressives have never been big fans of private equity. But this year, with more leftward-leaning members of the Democratic Party gaining sway both in Congress and in the ongoing slog to determine the party's presidential nominee, calls to increase regulation of PE were louder than ever.
The clearest example came in July, when Elizabeth Warren announced her Stop Wall Street Looting Act of 2019,
proposed legislation that both critics and proponents agree would present an existential risk to the private equity industry as we know it. A Congressional PE hearing followed in November, and Warren, Bernie Sanders and Alexandria Ocasio-Cortez have all made other very public criticisms of PE. It seems likely that buyout billionaires will continue to be a political talking point into 2020.
3. The Beyond Meat bubble
Before WeWork stopped the music, some of the unicorns that went public earlier in 2019 had been having a rollicking year. None more so than Beyond Meat, the maker of plant-based alternative meat products that went public in May and, by late July, had seen the price of its stock rise by more than 800%. Investors were infatuated with the company's promise to change the future of food, so they started paying astronomical prices to get in on the action.
In the second half of the year, though, Beyond came back to Earth. Its stock declined from a high of nearly $240 per share on July 26 to $76.84 at Friday's close—still good for a $4.7 billion market cap and enough to result in plentiful profits for shareholders, but not quite the once-in-a-lifetime winner it had briefly appeared to be. Meat alternatives probably aren't going anywhere, though, and Beyond is well-positioned to continue growing its presence.
4. Mega-fund mania
Both VC and PE firms spent much of 2019 raising enormous pools of capital. Blackstone raised $26 billion for the biggest buyout fund ever, while names like Advent International, Vista Equity Partners and Thoma Bravo all closed funds with well over $10 billion in commitments. Venture firms, meanwhile, pursued larger vehicles than ever before as a way to keep up with all their late-stage portfolio companies that want to raise capital without going public. Andreessen Horowitz, TCV, Lightspeed and Founders Fund were some of the investors that banked more than $1 billion for new funds.
5. The big get bigger
At the same time progressive politicians were challenging PE, they were also calling to break up tech giants like Google, Amazon and Facebook on antitrust grounds, probably the most high-profile concerns about monopolization in tech since Microsoft went on trial in the late 1990s. But it didn't stop those companies from making some major acquisitions aimed at increasing their industry dominance.
In June, Google agreed to buy cloud analytics specialist Looker for $2.6 billion, and in November, the company announced a $2.1 billion takeover of wearables maker Fitbit. Reports have emerged that UK regulators are planning to look into the Looker deal, while US regulators could challenge the Fitbit acquisition. Amazon, meanwhile, teamed with Sinclair Broadcast, Blackstone and the New York Yankees to buy the YES Network, extending its media reach; Amazon also made major investments in the auto space, helping pump hundreds of millions into autonomous driving companies Aurora and Rivian.
6. The brief reign of the AAF
Between February and early April, the Alliance of American Football played eight weeks of VC-backed professional football. Then it all crashed and burned in a mess of broken promises, missing money and angry millionaires, a strange saga that involved VCs, furious football players, frozen bank accounts, Vince McMahon and a bitcoin scandal. I felt awful for the players and other employees that were left in the lurch, but in terms of entertainment, what more can you ask for?
7. Flying things
VCs had their eyes on the skies in 2019. It started in the first days of January, when Boom Supersonic raised $100 million at an $850 million valuation for its Concorde-style passenger jets. It continued in the ensuing 12 months, as names like Lilium, BlackBird and Jetpack Aviation raised venture capital for things like flying taxis, plane-sharing and personal jetpacks. The year was also a busy one for companies that want to fly away from the Earth entirely, as SpaceX raised more than $1 billion and Virgin Galactic became a public company by means of a reverse merger. Billionaire-backed space
companies SpaceX, Virgin Galactic and Blue Origin all continue to pledge that space tourism is right around the corner.
8. High-tech hamburgers
The Golden Arches are fully embracing the digital age. After decades of rarely investing in other companies, McDonald's lined up a pair of notable acquisitions this year, first agreeing to buy Dynamic Yield in March (reportedly for more than $300 million) and then agreeing to take over Apprente in September. Dynamic Yield makes digital display technology, while Apprente develops voice-ordering services; together, the two deals look like an attempt to revamp the entire ordering process at McDonald's.
They weren't the highest-profile moves, but in addition to changing the way I'll buy french fries in the future, they also signify the degree to which tech startups have saturated the entire business world. Every major corporation must at least keep an eye on Silicon Valley these days, even ones whose main business concerns are quite literally meat and potatoes.
9. Public PE stocks skyrocket
After the past couple of years, all of the biggest publicly traded private equity firms converted from partnerships to corporations, moves born in no small part of those firms' desire to increase the value of their stock. Well, mission accomplished. Apollo Global Management, Blackstone and The Carlyle Group all saw their share prices increase by more than 85% during 2019, and KKR's value leapt by more than 50%. Apollo, Blackstone and KKR shares are now trading at all-time highs. Maybe all that time in the political spotlight wasn't such a bad thing after all.
10. Startups helping startups
You can barely turn your head in San Francisco without seeing an advertisement for Brex, a fintech startup that provides corporate credit cards for other companies. It raised $100 million this year at a $2.6 billion valuation, one of a few different startups to bring in bundles of capital on the promise of making life easier for their peers. There was also Carta, a maker of software for managing startup cap tables and other areas of corporate finance, which raised $318 million at a $1.6 billion valuation. And Vouch, which makes insurance services designed specifically for startups, brought in $45 million at a $210 million valuation.
11. Peloton's wild ride
When Peloton went public in September, there was a certain degree of skepticism—some of it sparked by the then-unfolding WeWork debacle, some by the unusual nature of the home-cycling company's business model and some by a $300 million lawsuit related to music rights. But the early returns on the public market were promising, as Peloton saw its market cap inch past $10 billion, compared to the $4.15 billion valuation it attained with its final round of VC funding in 2018.
And then that advertisement aired. Peloton released a widely ridiculed new holiday commercial in late November, and throughout the first few weeks of December, its stock price steadily declined. Is it a coincidence? Will it continue? Either way, Peloton will keep on peddling its pedaling machines.
12. Look what they made her do
I am going to guess that, until November, there weren't a whole lot of die-hard Taylor Swift fans who had an opinion about The Carlyle Group. But that all changed when Swift went public with a feud over the rights to her music with Big Machine Label Group, a record label in which Carlyle portfolio company Ithaca Holdings acquired a stake earlier this year.
The primary battle is between Swift and producer-slash-archrival Scooter Braun. But Swift has specifically named Carlyle in her complaints, and I find it absolutely delightful that Carlyle co-CEO Kewsong Lee is being forced to make pronouncements that Swift is "an incredibly talented performer and wonderful artist." What a strange world. What a strange year.