Thursday, December 13, 2018

Term Sheet: Dec. 13, 2018

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December 13, 2018
THE 2018 STATE OF STARTUPS

Good morning, Term Sheet readers.

First Round Capital released its annual State of Startups report this morning. The firm surveyed 529 founders on topics such as the current fundraising climate, exit environment, and the challenges of operating a startup. This year, there was also a question about the impact of SoftBank's Vision Fund on the tech ecosystem because, well, we can't go a day without a SoftBank deal (see VC section below).

 
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Here are some of the most interesting takeaways from the report:

What is investors' strongest bias?

Founders seem to think it's their age. 37% of respondents believe startup investors bias against founders based on age (compared to 28% on gender and 26% on race). A whopping 89% of respondents agree that older people face age discrimination in the tech industry.

Is it hard to be a parent in tech?

Depends on who you ask. Two-thirds of male founders say that tech companies are inclusive for parents. Yet only one-third of female founders feel the same. Women were also twice as likely to report investor bias against founders who are pregnant or have children.

Where will the next wave of great founders come from?

Uber, according to 23% of respondents. Slack came in second with 16% while Stripe (15%) and Airbnb (14%) were next in line.

Who will reign over tech in 2028?

When asked about the decade to come, nearly 40% of founders predict that China will occupy the center of the tech world in 2028 and more than 50% say the center will be in the U.S.

Is SoftBank good for the startup ecosystem?

A resounding yes from 70% of startup founders who said they still see SoftBank as a net positive for the world. Note that the majority of survey responses were received before the Jamal Khashoggi murder after which SoftBank came under scrutiny for having Saudi Arabia's sovereign wealth fund as a major investor in the Vision Fund. (Related: This Term Sheet tells you everything you need to know about this issue.)

Will blockchain technology change our lives?

Founders were asked to share their perspective on the practical uses of blockchain and cryptocurrency technology. While the majority report that players in their industry are at least experimenting with cryptocurrency or blockchain, less than 1% say it's been revolutionary for them or their peers. Only 13% believe these will become dominant technologies in their industry in the future. YET yet 40% of founders said they personally owned cryptocurrency…..¯\_(ツ)_/¯

Read the full report here.

BIG EXIT: Timothy Springer, a professor of medicine at Harvard Medical School, is a collector of gongshi, or scholars' rocks, from China. As Moderna Therapeutics was preparing to launch one of the biggest IPOs in biotechnology history, Springer was busy giving a lecture about rocks.

When the company went public, the academic made $400 million and became the fourth-largest shareholder of Moderna. He had invested $5 million in the startup's early days, and now owns 17.3 million shares. But that wasn't his first windfall. He's become one of the wealthiest academics in the U.S., having made about $100 million when his first venture, a drugmaker called LeukoSite, was bought by Millennium Pharmaceuticals in 1999. Since then, he has become a prolific backer of young biotechnology companies.

Springer said investing is "a way of achieving things. There's certain metrics you can achieve in academia, you can win prizes, you can have lots of citations to your publications. There's very clear metrics in investing."

This is a really good one. Read the full story here.

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THE LATEST FROM FORTUNE...

Why Startups Keep Raising Mega-Rounds of $100 Million (or More) (by Claire Zillman)

How Europe's Young Tech Industry Can Avoid Silicon Valley's Diversity Failures (by Grace Donnelly)

What's Going on With the Price of Bitcoin? (by Erika Fry)

Apple Building $1 Billion Austin Campus and Hiring Workers Across the U.S. (by Grace Dobush)

... AND ELSEWHERE:

Future Family launches a $100 million fertility fund. Workers are ghosting their employers like bad dates. How fierce competition shaped Uber and Lyft's fundraising strategy. After #MeToo, those who report harassment still risk retaliation.

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VENTURE DEALS

Zymergen, a company that manufacturers molecules for a wide array of uses and industries, raised $400 million in Series C funding. SoftBank led the round, and was joined by investors including Goldman Sachs, Hanwha Asset Management, DCVC, True, Two Sigma Ventures, DFJ and Innovation Endeavors.

Minted, a San Francisco-based social commerce company that crowdsources graphic designs and content from a global design community, raised $208 million in Series E funding. Investors include Permira and T. Rowe Price Associates, Inc.

Grab, a Singapore-based ride-hailing firm, raised an additional $150 million in funding for its ongoing Series H round, from Yamaha Motor.

AtScale, a San Mateo, Calif.-based data warehouse virtualization platform company, raised $50 million in Series D funding. Morgan Stanley led the round, and was joined by investors including Storm Ventures, Wells Fargo and Atlantic Bridge.

Optibus, an Israel-based developer of public transport optimization software, raised $40 million in Series B funding. Insight Venture Partners led the round, and was joined by investors including Alibaba Group, Verizon Ventures, Pitango Venture Capital, New Era Capital and Sir Ronald Cohen.

FINALCAD, a France-based construction mobile platform, raised $40 million in Series C funding. Draper Esprit led the round, and was joined by investors including Cathay Innovation and Salesforce Ventures.

Chorus.ai, a service that listens to sales calls in real time and then transcribes and analyzes them to give tips to the salesperson, raised $33 million in Series B funding. Georgian Partners led the round, and was joined by investors including Redpoint Ventures and Emergence Capital.

Tigera, a San Francisco-based enterprise software company providing security and compliance solutions for Kubernetes platforms, raised $30 million in Series B funding. Insight Venture Partners led the round, and was joined by investors including Madrona, NEA and Wing.

Juniper Square, an investment management platform designed specifically for real estate industry, raised $25 million in Series B funding. Ribbit Capital led the round, and was joined by investors including Felicis Ventures.

Guru, a knowledge management solution, raised $25 million in Series B funding. Thrive Capital led the round, and was joined by investors including Emergence Capital, FirstMark Capital, Slack Fund, and Michael Dell.

Happiest Baby Inc, a Los Angeles-based provider of parenting solutions, raised $23 million in Series B funding. Greycroft Partners led the round, and was joined by investors including Sallfort Bank and GV.

Celect, a Boston-based provider of predictive analytics and inventory optimization for retailers, raised $15 million in Series C funding. Investors include NGP Capital, Fung Capital, Activant Capital and August Capital.

MachineMetrics, a developer of real-time production monitoring software for manufacturing companies, raised $11.3 million in Series A funding. Tola Capital led the round, and was joined by investors including Hyperplane Venture Capital, Long River Ventures, Mass Ventures, Hub Angels and Firebolt Ventures.

WhyHotel, a Washington, D.C.-based provider of an alternative lodging service that operates pop-up hotels, raised $10 million in Series A funding. Highland Capital Partners led the round, and was joined by investors including Camber Creek, Revolution's Rise of the Rest Seed Fund, Mendacre, MetaProp and Geolo Capital.

Hi Fidelity Genetics, a computational crop breeding company, raised $8.5 million in Series A funding. Fall Line Capital and Finistere Ventures co-led the round, and were joined by investors including Gro Alliance, KdT Ventures, Prairie Crest Capital, S2G and Tom Farms.

YayPay, a developer of accounts receivable software that automates payment workflows, raised $8.4 million in funding. Information Venture Partners led the round, and was joined by investors including Birchmere, QED, Fifth Third Capital, the direct equity investment subsidiary of Fifth Third Bancorp, Gaingels, 500 Fintech Fund, and Runway Venture Partners.

Wandelbots, a Germany-based industrial robotics startup, raised €6 million ($6.8 million) in Series A funding. Investors include Paua Ventures and the EQT Ventures fund.

ROAR Organic, a natural line of vegan, low-calorie, low-sugar, electrolyte-infused beverages, raised $5.6 million in funding. AccelFoods led the round.

Block, an all-inclusive renovation platform, raised $4.5 million in seed funding. Investors include NEA, Lerer Ventures and Rainfall Ventures.

EDGe Surgical Inc, a Chicago-based medical device company focused on precision measurement solutions for orthopedic surgery, raised $4 million in Series A funding. The investors were not named.

Vyng, a Los Angeles-based video ringtone company, raised $4 million in Series A funding. Omidyar Network and March Capital Partners co-led the round, and were joined by investors including Alpha Edison and the Entrepreneur Fund.

Aiera, a Boston-based adaptive deep learning platform, raised $3.5 million in seed funding. Flybridge Capital Partners led the round.

Glose, a France-based reading platform, raised a €3 million ($3.4 million) in funding. Investors include OneRagTime, Expon Capital, Kima Ventures, and Bpifrance.

Inscribe, a company that automates the process of identifying fraudulent documents using a combination of image forensics and machine learning, raised $3 million in seed funding. Crosslink Capital and Uncork Capital led the round, and were joined by investors including SV Angel, Liquid 2 Ventures, Quiet Capital, Friale, Marc McCabe and Brad Flora.

NuID, Inc., a blockchain cyber security and digital identity startup, raised $2.5 million in seed funding at a $20 million pre-money valuation. Investors include Jemison Investment Co and 8VC.

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HEALTH AND LIFE SCIENCES DEALS

SeLux Diagnostics, a Massachusetts-based developer of a next generation phenotyping platform, raised $25 million in Series B funding. Sands Capital Ventures led the round, and was joined by investors including RA Capital Management, Schooner Capital and Northpond Ventures.

Black Diamond Therapeutics, a Stony Brook, N.Y.-based cancer precision medicine platform, raised $20 million Series A funding. Investors include Versant Ventures.

InterVenn BioSciences, a life sciences and technology company developing an AI-driven mass spectrometry platform, raised $9.4 million in funding. Genoa Ventures led the round, and was joined by investors including True Ventures, Amplify Partners, Boost VC, and Prado SV.

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PRIVATE EQUITY DEALS

Ardenton Capital made an investment in Shaftec, a U.K.-based provider of automotive parts to the UK aftermarket. Financial terms weren't disclosed.

H.I.G. Capital acquired Vision Integrated Graphics Group, a Bolingbrook, Ill.-based provider of tech-enabled marketing solutions focused on customer acquisition and engagement for Fortune 1000 customers. Financial terms weren't disclosed.

Providence Strategic Growth made an investment in ShootProof, a provider of online gallery software and related services for professional and semi-professional photographers. Financial terms weren't disclosed.

Altus Capital Partners sold International Imaging Materials, Inc, an Amherst, N.Y.-based developer of printing, imaging, and marking consumable supplies, to ACON Investments, LLC.  Financial terms weren't disclosed.

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OTHER DEALS

Waitr Holdings Inc. (Nasdaq: WTRH) agreed to acquire Bite Squad, a Minneapolis-based online restaurant food delivery service, for approximately $321.3 million.

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IPOs

Wuxi AppTec, a Chinese medical tech platform, raised $1 billion in a Hong Kong IPO, valuing it at about $10.2 billion. Read more.

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EXITS

Procter & Gamble acquired Walker & Company, a Palo Alto, Calif.-based startup making health and beauty products for people of color. Financial terms weren't disclosed. Walker & Company had raised approximately $33.3 million in venture funding from investors including Institutional Venture Partners, Andreessen Horowitz, Upfront Ventures, Daher Capital, Collaborative Fund, Google Ventures, Felicis Ventures and Melo7 Tech Partners.

Farfetch acquired Stadium Goods, a New York-based marketplace for sneakers and streetwear, for $250 million in a combination of cash and stock. Stadium Goods had previously raised approximately $5.6 million in venture funding from investors including Forerunner Ventures, The Chernin Group, and SM Ventures.

Silver Lake will acquire ServiceMax, a Pleasanton, Calif.-based field service software solutions, from GE Digital. Financial terms weren't disclosed.

G2 Crowd acquired Siftery, a San Francisco-based platform that helps businesses discover new applications based on stacks used by peer companies. Siftery had previously raised $4.1 million in venture funding from investors including Felicis Ventures and Venrock.

7 Gate Ventures sold Leavetown, a Canada-based vacation booking service platform, to RedAwning. Financial terms weren't disclosed.

Croft & Bender sold 4th Source, Inc, a Tampa, Fla.-based software development, and IT and technology outsourcing company, to AN Global. Financial terms weren't disclosed.

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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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