Term Sheet: Feb. 05, 2019

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FOLLOW subscribe ANON TIP February 5, 2019 SLACK IPO Good morning, Term Sheet readers. Slack has filed confidentially to go public later this year.   . .   The workplace messaging startup has raised more than $1 billion in venture funding from investors including Softbank, Andreessen Horowitz, Kleiner Perkins, GV, Dragoneer Investment Group, General Atlantic, T. Rowe Price Associates, Inc., and many more. The company was valued at $7.1 billion in a $427 million funding round in August. Slack is one of several tech unicorns slated to go public in 2019. Perhaps what's most interesting is that the startup has chosen to follow in Spotify's footsteps and pursue a direct listing of its shares. This could potentially make it the second big technology company after Spotify to bypass a traditional IPO. A direct listing is an unusual move in which a company circumvents the traditional underwriting process and allows the market to play a greater role in determining the price. Here's the thing: A company like Spotify fit the direct listing model well because 1) it did not need to raise any money as it would in a typical IPO and 2) it had a recognizable, global brand. In March, I asked Spotify's first investor, Northzone general partner Par-Jorgen Parson, whether he thought more unicorns would follow suit in pursuing the non-traditional IPO path. He said: "I think it's highly unlikely that a B2B company can go down this route. It's just unlikely that a smaller market-cap company would be able to get enough interest in the capital markets." And Slack is, well, a B2B SaaS company, but it's an anomaly in that it does have a relatively recognizable brand. Let's see whether the risk will be worth the reward in this case. CRYPTO M&A: The cryptocurrency exchange Kraken says it has paid "nine figures" to acquire Crypto Facilities, a British trading firm that specializes in derivatives. The San Francisco company also disclosed in an interview with Fortune that it is on the cusp of completing a $100 million funding round financed by its larger customers. In an unusual move, Kraken did not turn to the venture capitalists and other traditional investors (Hummingbird Ventures, Blockchain Capital, and Digital Currency Group) that supplied its early rounds of funding for its recent $100 million fundraising effort. It would not disclose the identities of its new investors. Kraken CEO Jesse Powell described them as everyone from "crypto OGs to funds to random guys who trade and believe in the company." My colleague Jeff Roberts reports: Kraken did not need to register the round with the SEC, Powell said, because the company only approached accredited investors and others covered by an exemption. Most of the new investment came from outside the U.S., he added. The decision to approach Kraken's clients for funding is a way to promote the interests of its users, Powell said. "My personal philosophy is that shareholders are at often at odds with users' interests," he said. "Look at Facebook looting from their users in order to pay off shareholders—that wouldn't happen if users were shareholders themselves. It's good to keep interests aligned." Read the full story here. GEN Z FUNDING: Perksy, a New York-based market research company focused on younger audiences, raised $4 million in seed funding. Bain Capital Ventures led the round, and was joined by investors including Founder Collective, Sinai Ventures, Torch Capital, MDC Ventures and Gingerbread. The company is taking on traditional consumer research survey companies by gamifying the process and targeting people ages 13 to 38 years old. In its first year, Perksy has reportedly booked $1.3 million in revenue and counts Cirque Du Soleil, Pepsico, and Nickelodeon as clients. I spoke with lead investor Sarah Smith (of Bain Capital Ventures) yesterday about the fundraise. While results from traditional consumer research surveys take weeks to months to reach the client, she says Perksy can deliver a results as quickly as a few hours. The company's most important offering? Real-time data and analysis. "One of the interesting features about the data is that Perksy can do longitudinal studies across the same users," Smith said. "So if you're a brand, you can poll 10,000 users, come back 30 days later, and poll them again. The ability to longitudinally study the same group of consumers has been notoriously challenging for the industry. I absolutely believe this company can take over Nielsen, to be honest." . . VENTURE DEALS • Guazi.com, a China-based used car trading platform, is in talks to raise up to $1.5 billion in funding from SoftBank's Vision Fund, according to Reuters. Read more. • Databricks, a San Francisco-based provider of a cloud platform, raised $250 million in Series E funding at a $2.75 billion valuation. Andreessen Horowitz ked the round, and was joined by investors including Coatue Management, Microsoft and NEA. • Siete Family Foods, an Austin-based Mexican-American food brand, raised $90 million in funding. Stripes Group led the round. • CoverHound, a San Francisco-based property and casualty insurance platform for digital distribution, raised $58 million in Series D funding. Hiscox led the round, and was joined by investors including Chubb, Aflac Ventures, and MS&AD. • Ike, an autonomous trucking startup, raised $52 million in Series A funding. Bain Capital Ventures led the round, and was joined by investors including Redpoint Ventures, Fontinalis Partners, Basis Set Ventures, and Neo. • Personal Capital, a digital wealth management company, raised $50 million in Series F funding. IGM Financial Inc led the round. • FourKites, a Chicago-based provider of a software platform for freight brokers and shippers to streamline their operations, raised $50 million in Series C funding. Investors include August Capital, Bain Capital Ventures, CEAS Investments and Hyde Park Angels. • Cuyana, a San Francisco-based women's luxury lifestyle brand, raised $30 million in funding, from H.I.G. Growth Partners. • Catalytic, a Chicago-based SaaS intelligent automation platform, raised $30 million in Series B funding. Intel Capital led the round, and was joined by investors including Redline Capital, New Enterprise Associates, Boldstart and Hyde Park Angels. • Aurora Solar, a San Francisco-based software platform for distributed solar, raised $20 million in Series A funding. Energize Ventures led the round, and was joined by investors including S28 Capital and Pear. • Ritual, a subscription-based vitamin service, raised $25 million in Series B funding. Norwest Venture Partners led the round, and was joined by investors including Forerunner Ventures and Founders Fund. • Healthy.io, an Israel-based digital health company, raised $18 million in Series B funding. Aleph led the round, and was joined by investors including Samsung NEXT. • Healthware, an Italy-based next-generation consulting firm, has secured 10 million euros ($11.4 million) in funding. FII Tech Growth led the round. • CoreTigo, an Israel-based provider of critical wireless connectivity solutions, raised $10 million in Series A funding. Qualcomm Ventures LLC and Sierra Ventures led the round, and were joined by investors including Magma Venture Partners, Cardumen Capital and Meron Capital. • By Humankind, a personal care product company, raised $4 million in seed funding. Lerer Hippeau led the round, and was joined by investors including Red Sea Ventures, BoxGroup, SV Angel, Great Oaks, SoulCycle Co-founder Elizabeth Cutler, and CPO of Adobe, Scott Belsky,. • GetJenny, a Finland-based human-directed AI platform which allows companies to automate conversations and tasks with chatbots without programming, raised €2 million ($2.3 million) in seed funding. Dubai Angel Investors led the round, and was joined by investors including Exio and Business Finland. • Outlaw Inc., a Brooklyn-based contract platform, raised $2 million in seed funding. Bowery Capital led the round. • eIQ Mobility Inc, a company focused on the electrification of commercial and public fleets, raised seed funding of an undisclosed amount, from Schneider Electric Ventures. . PRIVATE EQUITY DEALS • Insignia Capital Group agreed to acquire a "significant" minority stake in MediaAlpha, a Los Angeles-based marketing technology company. The deal values the company at $350 million. • Silver Lake acquired GE Digital, a developer of a software which connects streams of machine data to analytics and people, from ServiceMax. Financial terms weren't disclosed. • Wynnchurch Capital acquired Boss Industries, a company focused on power take-off (PTO) and engine driven rotary screw air technology. Financial terms weren't disclosed. • GTCR acquired Caribou Technologies, a medical device manufacturer. Financial terms weren't disclosed. • L Catterton made a "significant investment" in FEMME, a Brazil-based healthcare company. Financial terms weren't disclosed. . IPOs • Slack, the messaging platform, filed confidentially for an IPO. Read more. . EXITS • Great Hill Partners sold ZoomInfo, a Waltham, Massachusetts-based B2B data provider, to DiscoverOrg. Financial terms weren't disclosed. • First Infrastructure Capital Advisors agreed to acquire WhiteWater, an Austin, Texas-based midstream company. Financial terms weren't disclosed. . FIRMS + FUNDS • Section Partners, a Palo Alto, Calif.-based venture firm, raised $120 million for its third fund. . PEOPLE • Advent International named Bryan Taylor as a managing partner. • Thomas Whiteaker joined IBM Ventures as a partner, according to a post on LinkedIn. . SHARE TODAY'S TERM SHEET View this email in your browser. 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