Thursday, November 7, 2019

Term Sheet: Nov. 07, 2019

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November 7, 2019

I tip my hat to the person(s) responsible for creating SoftBank's pitch decks. I can't remember the last time a deck on earnings made me laugh out loud on the subway. WeWork wasn't able to elevate our consciousness, but I promise you that this deck will. It's chock full of delicious detail — be it on hypotheticals or other stuff.


The pitch deck made its way through VC Twitter last night with many people (including me) initially thinking it was fake. It's not. The full presentation is publicly available under the investor relations tab of SoftBank's website.


Let's deconstruct several of the slides about WeWork. The first WeWork slide features a dark, stormy sea with the words "Significant decrease in profit" and "WeWork problem" overlayed on top. 


And then come a number of slides on hypotheticals. The most eye-catching is one titled "Hypothetical Illustration of EBITDA." It features a downward-sloping line in which the very bottom shows an arrow that marks "future," and then *bam* a timeline that shoots up-and-to-the right emerges (although at one point it appears to actually go back in time) with a note saying, "Aim to achieve turnaround."


One person on Twitter called it "this year's most optimistic slide." Another said, "The confidence to go with a scale of '0 to Future' on the X axis and no Y axis makes me think the Vision Fund II fundraise is going better than most in the press would have us believe."


So how exactly do they hope to achieve that plan? Well, it's clear as day, and it can be summed up in one slide:


If you've followed SoftBank's Masayoshi Son for long enough, you know that the WeWork fiasco isn't where the story ends. In his eyes, he has plenty of time. WeWork and Uber may be losing money now, but they will be substantially profitable in 10 years' time, Son said in a recent interview. Two years ago, I discovered a 2010 SoftBank deck, which outlines the Japanese behemoth's 30-year vision through some just-as-entertaining slides.


Here's the non-hypothetical reality though: SoftBank on Wednesday tallied up the write-downs on its investments in WeWork since the company decided to pull its IPO. The total comes to a whopping $9.2 billion, or some 90% of the $10.3 billion SoftBank had invested in the venture. Fortune's Erik Sherman writes that SoftBank hopes it can direct WeWork into renewed growth and eventual profitability by taking more control over the company. But, he notes, it risks the sunk costs fallacy: the assumption that more investment will eventually recoup previous losses.


Oh, and in case you're a SoftBank portfolio company that thinks there's a lifeline waiting for you too, don't hold your breath.


Photos via SoftBank, “Earnings Results for the 6-month Period ended September 30, 2019


Polina Marinova
Twitter: @polina_marinova
Email: polina.marinova@fortune.com 


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VENTURE DEALS


- Reonomy, a New York-based provider of property intelligence, raised $60 million in Series D funding. Georgian Partners led the round, and was joined by investors including Wells Fargo Strategic Capital, Citi Ventures, Untitled Investments, Sapphire Ventures, Bain Capital, and Primary Venture Partners. 


- Immersive Labs, a U.K.-based on-demand and gamified cyber skills platform, raised $40 million in funding. Summit Partners led the round, and was joined by investors including Goldman Sachs


- LeaseQuery, an Atlanta-based provider of purpose-built lease accounting software, raised $40 million in Series A funding. Goldman Sachs led the round.


- Eight Sleep, a New York-based sleep fitness company, raised $40 million in funding. Founders Fund led the round, and was joined by investors including Craft Ventures, Khosla Ventures, Y Combinator and 8VC.


- Wrench, a Seattle-based mobile vehicle maintenance and repair company, raised $20 million in Series C funding. Vulcan Capital led the round, and was joined by investors including Madrona Venture Group, Tenaya Capital and Marubeni Corporation.


- Untether AI, a Canada-based AI chip startup, raised $20 million in Series A funding. Investors include Radical Ventures and Intel Capital.


- SquareFoot, a New York-based commercial real estate company, raised $16 million in Series B funding. DRW VC led the round, and was joined by investors including Triangle Peak Partners, RRE, and Rosecliff.


- Ursa, an Ithaca, N.Y.-based provider of geospatial services, raised $15 million in Series B funding. Razor's Edge Ventures led the round, and was joined by investors including Citi and New York Ventures.


- Neural Magic, a Somerville, Mass.-based A.I. company focused on replacing expensive A.I. chips, raised $15 million in seed funding. Comcast Ventures led the round, and was joined by investors including NEA, Andreessen Horowitz, Pillar VC and Amdocs.  


- Anonos, a New York-based data privacy and enablement technology platform provider, raised $12 million in funding. Edison Partners led the round. 


- DEV, a New York-based social network for software developers, raised $11.5 million in Series A funding. Mayfield led the round, and was joined by investors including OSS Capital and Charge VC. 


- Cover Genius, an Australia-based developer of an insurance distribution platform, raised $10 million in Series B funding. King River Capital led the round, and was joined by investors including the Belfer Family, Jasper Tans, Regal Funds Management and Marinya Capital.


- Access Physicians, a Dallas, Texas-based multispecialty physician group, raised $9.3 million in Series A funding from Health Enterprise Partners. 


- Agritask, an Israel-based precision agriculture startup, raised $8.5 million in Series A funding. The InsuResilience Investment Fund led the round, and was joined by investors including Barn Investimentos.


- Cultivate, a San Francisco-based A.I.-driven leadership coaching platform serving the enterprise market, raised $8 million in Series A funding. Trinity Ventures led the round, and was joined by investors including Bloomberg Beta, Silicon Valley Data Capital and SAP.iO.  


- Quartic.ai, a Canada-based full-stack industrial A.I. and IIoT software provider, raised $5 million in Series A funding. WRVI Capital led the round.


- Arweave, a London-based blockchain protocol, raised $5 million in funding. a16z crypto led the round, and was joined by investors including Multicoin Capital and Union Square Ventures.


- Scanwell Health, an Anaheim, Calif.-based at-home diagnostics company, raised $3.5 million in seed funding. Investors include Founders Fund, Mayfield, DCM, Version One, Y Combinator, and Joe Montana's Liquid 2 Ventures. 


- Wardrobe, a U.K.-based platform that enables people to rent luxury, designer and vintage clothing from each other's closets, raised $1.5 million in funding. Cyan Banister and Ludlow Ventures co-led the round, and were joined by investors including Ground Up Ventures.


- eFuse, a Columbus, Ohio-based web and mobile application that serves as the professional hub for esports and video games, raised $1.4 million in seed funding from the Ohio Innovation Fund.


HEALTH & LIFE SCIENCES DEALS


- Acticor Biotech, a Paris-based clinical stage biotechnology focused on thrombotic diseases, raised 7 million euros ($7.8 million) in funding. Go Capital led the round, and was joined by investors including Newton BioCapital, CapDecisif Management and Anaxago.


PRIVATE EQUITY DEALS


- Kaho Partners acquired North American Manufacturing Co, a Scranton, Penn.-based supplier of rugged field equipment to all branches of the United States Armed Forces and other government agencies. Financial terms weren't disclosed. 


- Greenridge Investment Partners made an investment in GrowthZone, a Nisswa, Minn.-based provider of association management software. Financial terms weren't disclosed. 


- Staple Street Capital acquired Cyberlink ASP Technology, a Dallas, Texas-based managed IT services provider. Financial terms weren't disclosed. 


- Spectrum Equity made an investment in Kajabi, an Irvine, Calif.-based platform for creating and monetizing online courses and training materials. Financial terms weren't disclosed. 


IPOs


- Française des Jeux, a French state-owned lottery operator, filed for an IPO in the nation that values it at about 3 billion euros ($3.32 billion). Read more.


- Galera Therapeutics, a Malvern, Pa.-based firm focused on reducing toxicity during radiotherapy, raised $60 million in an offering of 5 million shares price dat $12, below its previous $14 to $16 range. It has yet to post a revenue and posted losses of $30 million in 2018.  New Enterprise Associates (20.4% pre-offering), Novartis Bioventures (17%), and Novo Nordisk (15%) back the firm. It plans to list on the Nasdaq as "GRTX." Read more.


- Centogene, a German firm focused on genetic testing, raised $56 million in an offering of 4 million shares at priced at $14, the low end of its $14 to $16 range. It posted a revenue of 40.5 million euros ($45 million) and posted losses of 11.4 million euros ($12.6 million) in 2018.  DPE Deutsche Private Equity (20% pre-offering), Equicore Beteiligungs (17%), and Careventures (11%) back the firm. It plans to list on the Nasdaq as "CNTG." Read more.


EXITS


- Seismic acquired Percolate, a New York-based marketing campaign orchestration and content management platform. Financial terms weren't disclosed. Percolate had raised more than $106 million in venture capital funding from investors including GGV Capital, Lightspeed, Sequoia Capital, and First Round Capital.


- RealPage (Nasdaq: RP) agreed to acquire Buildium, a Boston-based real estate property management SAAS company, for $580 million in cash. The seller was Sumeru Equity Partners.


- Amperity acquired Custora, a New York-based customer analytics platform for consumer brands. Financial terms weren't disclosed. Custora had raised approximately $20.3 million in venture funding from investors including General Catalyst, Foundation Capital, and Greycroft. 


PEOPLE


- Michael B. Gilroy joined Coatue Management as general partner. Previously, he was at Canaan.


- New Enterprise Associates promoted Rick Yang to general partner and head of consumer technology investing. Danielle Lay, Luke Pappas and Jai Sajnani have been promoted to principal. 



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