Thursday, September 14, 2017

Term Sheet: Sep. 14, 2017

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September 14, 2017
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Good morning, Term Sheet readers.

It's my opinion that when hundreds of millions of dollars are on the line, we should expect accountability, transparency, and verification. This is becoming harder and harder as companies actively work to maintain secrecy.

 
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Today, we learned that Magic Leap, a Florida-based wearable tech company, is raising $500 million in fresh funding at a valuation close to $6 billion. The company hasn't even released a product to the public yet! This hasn't stopped investors from pouring money, reporters writing stories, the hype building, and VCs pouring more money in.

This is top of mind for me right now is because recycling startup Rubicon Global became a unicorn yesterday. While a billion-dollar valuation seems straightforward, the details behind this one are somewhat confusing. In this Forbes article, all fundraising and valuation numbers are attributed to the CEO or lead investor. But when I started digging, the CEO claimed they're not only raising $50 million, but in fact, raising $100 million in two $50M tranches. He went on to say that the first round is closed and that the additional $50M will come from undisclosed strategic investors at a higher valuation. I have yet to receive clarification on whether the second $50M tranche is aspirational or finalized.

This obviously didn't clarify much, so then I looked at this SEC form stating Rubicon only raised $19.4 million. The CEO claimed that the form is not yet updated with the new funding.

Search the web and you'll find an Atlanta Business Chronicle article published weeks before the Forbes story breaking the news of the billion-dollar valuation. The article goes on to say the company raised $75 million instead of the $50 million reported by Forbes. When I asked Rubicon about the discrepancy, they stated the $75M was from a previous round and "the valuation in this piece was reported incorrectly." The company said the Atlanta Business Chronicle would be issuing a correction, but the reporter told me that is not true.

Rubicon's unicorn status and fundraising announcement is not as straightforward as I originally thought. This could be a simple miscommunication between the company and multiple outlets or there could always be more to the story. I'll update you as I find out more.

HOT TAKE: Thank you again to everyone who emailed me with thoughts on last week's question on how you would invest $100K. This week's question is: If you could run any private company right now, what would it be and why?

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THE LATEST FROM FORTUNE...

Why going public doesn't make sense right now (by Peter McKay)

Why I won't use Apple's new FaceID (by Jeff John Roberts)

Here's what every organ in the body would cost to transplant (by Nicolas Rapp,Anne VanderMey)

How Ford's new CEO is reaching out Silicon Valley (by Adam Lashinsky)

…AND ELSEWHERE

The bodega company installing "unmanned" pantry boxes in your apartment. Cute wi-fi names. SoftBank, Dragoneer, & Didi get close to finalizing investment in Uber. Ford disguised a man as a car seat to research self-driving

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VENTURE DEALS

TNG Fintech, a Hong Kong-based creator of a digital wallet platform, raised $115 million in Series A funding. New Margin Capital led the round.

Bayer and Ginkgo Bioworks will create a new company focused on the plant microbiome. The deal provides a Series A investment of $100 million by Bayer, Ginkgo, and Viking Global Investors LP.

Braavo Capital, a New York-based integrated financing platform for mobile app businesses, raised more than $70 million in debt and equity. Mark 2 Capital led the round.

StoreDot Ltd., an Israel-based nanotechnology materials pioneer, raised $60 million in funding. Daimler led the round, and was joined by investors including Samsung Ventures and Norma Investments.

Apttus, a San Mateo, Calif.-based quote-to-cash software solutions provider, raised $55 million in Series E funding, and was joined by investors including Premji, Salesforce, K1, and Iconiq.

HouseCanary, a San Francisco-based data analytics and valuation platform for real estate professionals, raised $31 million in Series B funding. Investors include PSP Growth and Alpha Edison.

Digital Marketing Institute, a Dublin-based certification standard in digital marketing and digital sales education, raised €26 million ($31 million) in funding. Spectrum Equity led the round.

FanDuel, a New York-based fantasy sports site, is in the process of raising between $30 million and $40 million in new funding from existing investors, according to Axios. The deal would be structured as a convertible note. Read more.

Eaze, a San Francisco-based weed delivery startup, raised $27 million in Series B funding, according to TechCrunch. Bailey Venture Partners led the round, and was joined by investors including DCM Ventures, Kaya Ventures and FJ Labs. Read more.

Heptio, a Seattle-based startup that helps companies Kubernetes open-source container management software, raised $25 million in Series B funding. Madrona Venture Group led the round, and was joined by investors including Lightspeed Venture Partners and Accel Partners.

Swrve, a San Francisco-based developer of an in-app direct marketing platform, raised $25 million in Series D funding. Summit Bridge Capital led the round.

MissionU, a San Francisco-based one-year college alternative, raised $8.5 million in Series A funding. FirstMark Capital led the round, and was joined by investors including First Round Capital, University Ventures, Box Group, Rethink Education, Learn Capital, John Doerr, and Omidyar Network.

Beyond Limits, a Glendale, Calif.-based artificial intelligence and cognitive computing company, raised $20 million in Series B funding. Investors include BP Ventures.

ICONIC Protein, a line of protein drinks made with grass-fed dairy, raised $8 million in funding. KarpReilly led the round.

Virtuo, a Paris-based mobile car leasing company, raised €7.5 million in funding ($8.9 million) from investors including Balderton Capital.

Infostellar, a Japan-based platform that enables antenna sharing, raised $7.3 million in Series A funding, according to TechCrunch. Read more.

Ori, a Boston-based architectural robotics furniture company, raised $6 million in Series A funding. Khosla Ventures led the round.

CashShield, a Singapore-based online fraud management company, raised $5.5 in Series A funding. GGV Capital led the round, and was joined by investors including Heliconia Capital Management, Tony Fadell, Razer, and Stream Global.

dv01, a New York-based data management, reporting, and analytics platform, raised $5.5 million in Series A funding. OCA Ventures led the round, and was joined by investors including Ribbit Capital, Illuminate Financial, and CreditEase Fintech Investment Fund.

YayPay, a San Francisco-based software that automates payment workflows, raised $5.3 million in funding, according to TechCrunch. Investors include QED Investors, Birchmere, Fifth Third Capital, 500 Fintech Fund, Aspect Ventures, Gaingels, Techstars and Zelkova. Read more.

Mikey's, a Scottsdale, Ariz.-based baked goods company, raised $5 million in two tranches from Factory., and will commit its full complement of resources and relationships to help Mikey's achieve its strategic goals.

Spineology Inc, a St. Paul, Minn.-based provider of anatomy-conserving spinal technologies for surgeons and their patients, raised $5 million in funding. The investor was Hermed Capital.

Snag-A-Slip, a Baltimore-based online boat slip reservation company, raised $4.8 million in Series A funding. Claritas Capital led the round, and was joined by investors including TCP Venture Capital, Jerry South, and the Abell Foundation.

Marketware, a Cottonwood Heights, Utah-based provider of SaaS healthcare relationship technology, raised $4.5 million in Series B funding. EPIC Ventures led the round and was joined by investors including Peak Ventures.

Carrot Fertility, a San Francisco-based provider of fertility-based health plans, raised $3.6 million in seed funding. SoftTech Ventures led the round, and was joined by investors including Maven Ventures, Precursor Ventures, Sound Ventures, Sherpa Ventures, Core VC, Founders Fund, and Y Combinator.

Furhat Robotics, a Stockholm-based social robotics company, raised $2.5 million in seed funding. Investors include Balderton Capital and LocalGlobe.

Birdies, a Sacramento-based footwear company, raised $2 million in seed funding. Forerunner Ventures led the round, and was joined by investors including Slow Ventures, Graph Ventures, and Social Capital.

Fiix, a Canada-based provider of auto repair services, raised $1.8 million in seed funding. Javelin Venture Partners led the round, and was joined by investors including Y Combinator.

Prellis Biologics, a San Francisco-based company that uses 3D printing to create human tissue and organs, raised $1.8 million in seed funding. Investors include True Ventures, Civilization Ventures, and 415 Ventures.

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HEALTH AND LIFE SCIENCES DEALS

BridgeBio Pharma, a Palo Alto, Calif.-based clinical-stage biopharmaceutical company, raised $135 million in funding. Viking Global Investors and KKR led the round, and were joined by investors including Perceptive Advisors, AIG, Aisling Capital, Cormorant Capital and Janus Funds.

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PRIVATE EQUITY DEALS

Carlyle Group is planning a sale of ADT Caps, a South Korea-based security systems company, according to Reuters. A sale of the business could potentially fetch around $4 billion. Read more.

Continental Services, a portfolio company of New Heritage Capital, acquired Satellite Vending Co, a Detroit-based provider of vending, micro-market, and office services. Financial terms weren't disclosed.

Main Capital acquired a majority stake in Evania Video, a Berlin-based provider of programmatic video solutions. Financial terms weren't disclosed.

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OTHER DEALS

Apple is discussing a $3 billion stake in Bain Capital's bid for Toshiba's chip unit, according to Bloomberg. Read more.

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IPOs

ZhongAn Online Property and Casualty Insurance, China's first online-only insurer based out of Shanghai, is reportedly planning raise $1.5 billion in a Hong Kong offering. Back in October, ZhongAn choose Credit Suisse, J.P. Morgan, and UBS to carry out the deal in the mainland—but paused due to regulatory hold ups. The company is backed by Chinese giants Tencent Holdings and Alibaba spinoff Ant Financial. Reuters.

Social Capital Hedosophia Holdings, a Palo Alto, Calif.-based SPAC, said it plans to raise $600 million in its IPO. The company has priced 50 million shares at $10 each, and plans to use the proceeds of the offering to acquire a tech company valued at at least $1 billion. The company is backed by Social Capital's Chamath Palihapitiya, and Osborne & Partners' Ian Osborne. Credit Suisse is underwriter in the deal. The company plans to list as "IPOA.U" on the NYSE.

Roots Canada, a retailer based out of Toronto, is said to be seeking C$200 million, or $159 million, in an IPO. The company has reportedly hired Toronto-Dominion Bank, Credit Suisse, and Bank of Montreal for an initial public offering, Bloomberg writes citing people with knowledge of the matter. The company, which is seeking an IPO this year, is backed by Searchlight Capital Partners. Bloomberg.

RYB Education, a childhood educational services provider based out of China, has set the terms of its IPO of American depository shares. The company said it plans to offer 7.8 million shares at $16 to $18. At the midpoint of the range, the company would raise $133 million. In 2016, the company posted revenue of $108.5 million on earnings of $5.9 million. Credit Suisse and Morgan Stanley are joint bookrunners in the deal. The company has also added BNP Paribas as an underwriter. The company plans to list as "RYB" on the NYSE.

ACM Research, a Fremont, Calif.-based semiconductor cleaner, filed for an IPO raising $35 million. The company posted revenue of $27.4 million and income of $1 million. Shanghai Science and Technology Venture Capital Co. (18.2% pre-offering), Pudong Science and Technology(12.2%), H.L. Hsieh(10.9%), and Zhangjiang AJ (8.6%) back the company. Roth Capital is bookrunner in the deal. The company plans to list as "ACMR."

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EXITS

Teva Pharmaceutical Industries Ltd (NYSE:TEVA) is close to a deal to sell its women's health assets outside the United States to CVC Capital Partners, according to Reuters. The assets could be valued at about $800 million. Read more.

Navicure, a company backed by Bain Capital, is nearing a deal to acquire ZirMed Inc, a Louisville, Ky.-based provider of cloud claims management solutions. The deal would value the company at approximately $750 million, according to Reuters. ZirMed raised venture funding of an undisclosed amount from Sequoia Capital and Poplar Ventures. Read more.

Enable Midstream Partners agreed to acquire Align Midstream, which is backed by Tailwater Capital, for about $300 million.

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FIRMS + FUNDS

Toscafund Asset Management, a London-based investment company, will form a new 300 million euro ($359.34 million) private equity fund, according to Reuters. Read more.

Samsung (KOSE:A005930) raised $300 million for its new Samsung Automotive Innovation Fund.

Fenox Venture Capital and AsusTek Computer Inc formed a $50 million venture fund, which will focus on AI, big data, Internet of Things, cloud, and AR/VR.

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PEOPLE

Kenneth Chan joined Macquarie Group as a senior vice president, according to his LinkedIn profile. Previously, Chan was at Tennenbaum Capital Partners.

Paul Levine joined Greylock Partners and Accel Partners as an executive-in-residence. Previously, Levine was at Trulia.

Dave Parker joined Seven Peaks Ventures as a venture partner.

Highland Capital Management, L.P., named Trey Parker a co-chief investment officer.

Canvas Ventures promoted Sarah Catanzaro to data partner and Jennifer Kaehms to associate.

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Polina Marinova produces Term Sheet, and Lucinda Shen compiles the IPO news. Send deal announcements to Polina here and IPO news to Lucinda here.

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