Term Sheet: Oct. 29, 2019

Our daily brief on deals and dealmakers. Is this email not displaying correctly? View it in your browser. follow Subscribe Send Tip October 29, 2019 Let's talk about TikTok, the popular short-form video app that's been popular with teens for quite some time and that their parents are just now learning about. TikTok videos are everywhere. Even if you don’t know you’ve seen one, you’ve seen one. (Here are examples.) The app has been downloaded more than a billion times since its launch, and young people churn and swipe through videos at warp speed. In a recent New Yorker profile, Jia Tolentino wrote: "Some social algorithms are like bossy waiters: they solicit your preferences and then recommend a menu. TikTok orders you dinner by watching you look at food." Now, ByteDance, the Chinese owner of the social network, is reportedly considering going public on the Hong Kong stock exchange as soon as the first quarter of next year. ByteDance raised $3 billion in funding last year in a round led by SoftBank, doubling its worth from a year earlier. An IPO would create a big windfall for early investors such as the Chinese arm of Sequoia Capital, and would also help SoftBank at a time when the value of its investments in companies such as Uber and WeWork has sharply fallen, according to the Financial Times. The company has denied the timing of the IPO, but I still think it's important to take a look at the short video juggernaut valued at $75 billion. ByteDance is one of the few Chinese companies to take the U.S. by storm. But the company is under serious scrutiny.  Earlier this month, Sen. Marco Rubio asked the U.S. government to open an investigation into TikTok out of concern that the company is "censoring content" around the world to satisfy Beijing's leaders. “China is using these apps to advance their foreign policy and globally suppress freedom of speech, expression and other freedoms that we as Americans so deeply cherish,” he wrote in a letter.  In a separate letter, Sen. Tom Cotton and Senate Minority Leader Chuck Schumer wrote, "TikTok is a potential counterintelligence threat we cannot ignore." TikTok vehemently denies these accusations and claims it does not house data from U.S. users in China, and that its video app isn’t censored by the Chinese government. (The Guardian reported that it does, based on a document leak; ByteDance said the document The Guardian viewed had been retired.) There's no question that TikTok looms a shadow over the United States during a time of fraught relations with China, and American social media networks are finding it hard to compete with the wildly popular app. It's going to be a messy fight over things much larger than a 15-second lip-syncing video — we're talking a threat to good ole' American innovation, expression, and values.  "Until recently, the internet in almost every country outside China has been defined by American platforms with strong free-expression values," said Facebook CEO Mark Zuckerberg during a speech at Georgetown University earlier this month. "There's no guarantee these values will win out." … MEANWHILE, Chinese investors are continuing to pour money into startups and venture capital funds, emboldened in part by ambiguities in U.S. efforts to limit foreign access to technology deals. In a well-reported investigation, The Wall Street Journal found that the specific guidance is yet to be defined for implementing a 2018 U.S. law that intends to curb foreign access to sensitive technologies. In the VC world, people refer to this law as Cfius. The law expanded the power of the Committee on Foreign Investment in the U.S. to probe minority investments in critical tech companies through which foreign investors could influence said company's business decisions. But, as the report notes, Cfius hasn't exactly stopped U.S. tech entrepreneurs from wanting to nurture connections to China. "The policies we have put in place have not been all that effective in limiting China's technology ambitions," Nicholas Eftimiades, a retired senior U.S. intelligence officer, told The Journal. Read the full story here. . . VENTURE DEALS - Vacasa, a Portland-based vacation rental management platform, raised $319 million in funding at a valuation of more than $1 billion. Silver Lake led the round, and was joined by investors including Riverwood Capital, Level Equity and NewSpring. - Scopely, a Culver City, Calif.-based developer of mobile games, raised $200 million in Series D funding. NewView Capital led the round, and was joined by investors including Canada Pension Plan Investment Board (CPPIB), Baillie Gifford, Greycroft Partners, Revolution Growth and Sands Capital Ventures.  - Scratchpay, a Los Angeles-based provider of payment plans for veterinary care, raised $65 million in Series B funding. Companion Fund led the round, and was joined by investors including TTV Capital, FJ Labs and Struck Capital. - PeerStreet, a Manhattan Beach, Calif.-based platform for investing in real estate backed loans, raised $60 million in Series C funding. Colchis Capital led the round, and was joined by investors including Andreessen Horowitz, World Innovation Lab and Thomvest Ventures. - Shipwell, an Austin, Texas-based connected shipping platform, raised $35 million in Series B funding. Georgian Partners led the round. - Twistle, an Albuquerque, N.M.-based healthcare communications platform, raised $16 million in Series A funding. Health Enterprise Partners and MemorialCare Innovation Fund co-led the round.  - ESS Inc., a Wilsonville, Ore.-based manufacturer of energy storage systems, raised $30 million in Series C funding. Breakthrough Energy Ventures and SoftBank Group's SB Energy co-led the round, and was joined by investors including Evergy Ventures, PTT Global Chemical, BASF Venture Capital, Cycle Capital Management, Presidio Partners Investment Management, IPM Group, and Pangaea Ventures. - Twiga Foods, a Kenya-based food distribution startup, raised $30 million in debt and equity. Goldman Sachs led the round. - Duffel, a U.K.-based travel tech company, raised $30 million in Series B funding. Index Ventures led the round, and was joined by investors including Benchmark Capital and Blossom Capital. - CelLink, a San Carlos, Calif.-based manufacturer of flexible circuit technology, raised $22.5 million in Series B funding. Investors include Franklin Venture Partners, Fontinalis Partners, BMW i Ventures, Ford Motor Company, Lear Corporation, 3M Ventures, SK Telecom, Robert Bosch Venture Capital, and Band of Angels. - Clarify Medical, a San Diego, Calif.-based developer of home therapy solutions for chronic skin treatments, raised $18 million in Series A funding. Investors include H.I.G. BioHealth Partners, 7wire Ventures, SV Health Investors, and Bluestem Capital.  - Sensely, a London and San Francisco-based digital health and insuretech platform, raised $15 million in funding. Aflac Corporate Ventures led the round. - RavenPack, a U.S. and Spain-based provider of alternative data and insights for financial institutions, raised $10 million in funding from GP Bullhorn. - Stardog, an Arlington, Va.-based enterprise data unification platform, raised $9 million in Series B funding. Tenfore Holdings led the round, and was joined by investors including Grotech Ventures, Boulder Ventures, and Core Capital.  - KOIO, a New York-based Italian leather sneaker label, raised $6 million in funding, totaling $9 million in Series A funding. Founders Fund led the round, and was joined by investors including Acton Capital Partners and Brand Foundry.  - Laki Power, an Iceland-based provider of real-time surveillance for high-voltage powerline infrastructure, raised funding of an undisclosed amount. Brunnur Ventures led the round. PRIVATE EQUITY DEALS - BlueSnap, which is backed by Great Hill Partners and Parthenon Capital Partners, acquired Armatic, an Aliso Viejo, Calif.-based provider of accounts receivable and invoicing automation solutions. Financial terms weren't disclosed. OTHER DEALS - Alphabet has made an offer to acquire Fitbit (NYSE:FIT), according to Reuters. Financial terms weren't disclosed. Read more. - Confluence Technologies acquired StatPro Group plc (StatPro) (AIM: SOG) for £161.1 million (over $207 million USD) in cash. IPOs - Canaan Inc., a Hangzhou-based crypto-mining firm, filed for a $400 million IPO. It posted net revenue of $394.1 million in 2018 and income of $8.3 million. It plans to list on the Nasdaq as "CAN." Read more. - LiZhi, a Guangzhou-based podcast platform, filed for an $100 million IPO. It posted revenue of $116.2 million in 2018 and loss of $32.8 million. Matrix Partners backs the firm. It plans to list in the U.S. as "LIZI." Read more. - Tela Bio, a Malvern, Penn.-based firm focused on soft tissue reconstruction, plans to raise $60 million in an IPO of 4 million shares priced between $14 to $16. The firm posted revenue of $8.3 million in 2018 and loss of $29.9 million. OrbiMed (34.6% pre-offering), Quaker BioVentures (21.2%), and Pacira Pharmaceuticals (13.6%) back the firm. It plans to list on the Nasdaq as "TELA." Read more. - Centogene, a German firm focused on genetic testing, now plans to raise $60 million in an offering of 4 million shares priced between $14 to $16. 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. - 36Kr Holdings, a Beijing-based media publisher focused on emerging companies, plans to raise $58 million in an IPO of 3.6 million ADS priced between $14.50 to $17.50. It posted revenue of $43.6 million and income of $5.9 million in 2018. back the firm. It plans to list on the Nasdaq. Read more. - Silvergate Capital, a La Jolla, Calif.-based bank focused on cryptocurrency firms, now plans to raise $52 million in an IPO of 3.7 million shares (79% insider sold) priced at a range of between $13 to $15. It posted net interest income before loan loss provisions of $69.6 million in 2018, and net income of 22.3 million. BankCap and Partner Reinsurance Company back the firm. It plans to list on the NYSE as "SI." Read more. EXITS - Vitruvian Partners acquired Sykes Holiday Cottages, a U.K.-based holiday home provider. Financial terms weren't disclosed. Sellers include Livingbridge. - SparkPost agreed to acquire eDataSouce, a New York-based provider of email deliverability solutions and performance insights. Financial terms weren't disclosed. eDataSource had raised approximately $2.1 million in venture funding from investors including TWJ Capital and New York Angels. FIRMS + FUNDS - Revolution, a Washington D.C-based venture capital firm, raised $150 million for its second Rise of the Rest fund. - Qualcomm (Nasdaq:QCOM) raised $200 million for a 5G ecosystem venture fund. PEOPLE - New Enterprise Associates promoted Ed Mathers to general partner. . IF YOU LIKE THIS EMAIL... Share today's Term Sheet with a friend. Did someone share this with you? Sign up here. For previous editions, click here. For even more, check out Data Sheet, Fortune's daily newsletter on the latest in tech news. Sign up here.  . Email Us Subscribe share: . This message has been sent to you because you are currently subscribed to Term Sheet. 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