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Monday, March 26, 2018

Term Sheet: Mar. 26, 2018

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March 26, 2018

SOFTBANK LOOMS

Good morning, Term Sheet readers.

HOUSEKEEPING: It's been seven months since we first met, and I've enjoyed the thoughtful feedback you have sent my way during that time. Now, we've created a simple survey so I can learn more about all of you. It's an opportunity to tell me what you think about the newsletter: what you like (and don't), what you want to see more of, and what you think we're missing. Thanks in advance! Take the survey here.

NEW FUND ALERT: General Catalyst raised $1.38 billion for its new fund, according to an SEC filing that was first reported by Axios' Dan Primack. This is the firm's largest fund ever. As I noted in Term Sheet last week, there is no shortage of capital, with Sequoia, Battery Ventures, Khosla Ventures, and of course, General Catalyst, building up their VC war chests. Still, these funds combined pale in comparison to SoftBank's $100 billion Vision Fund.

MAMMOTH INVESTMENT: Speaking of the Vision Fund, it looks like SoftBank is on the prowl again. The Japanese giant is looking to invest approximately $1 billion in Chinese truck-hailing company Manbang Group, according to The Wall Street Journal. Manbang, which is backed by Tencent and Jack Ma's private equity firm, hopes to raise between $500 million and $1 billion in capital to help it expand in China's growing logistics market. In other words, SoftBank is willing to pour an amount that's nearly equal to General Catalyst's entire fund into just one company. What a time to be alive.

UBER OUT: After a costly fight, Uber has agreed to merge with Southeast Asia rival Grab. Uber will get a 27.5% stake in the combined company, Uber CEO Dara Khosrowshahi will join Grab's board, 500 individuals of Uber's staff will transition to Grab, and its customers will be shifted over to Grab's app.

Asia has been among the most expensive and competitive regions for Uber. It has slipped behind Grab and Indonesia-based Go-Jek. Oh, and SoftBank is an investor in both Grab and Uber. The question here is — how big of a role did SoftBank play in this move?

"It was really a very independent decision by both companies. SoftBank, of course, and Masa in particular, was highly supportive of the acquisition," Grab President Ming Maa told Reuters.

Things are getting pretty tangled as it may seem like SoftBank has invested in everything, including United States' Uber, Singapore's Grab, China's Didi Chuxing, and India's Ola. As a result, Softbank has emerged as, "the real king of ride-hailing."

We'll see who's pulling the strings if Uber exits Africa. SoftBank made a statement earlier this year saying the ride-hailing giant should focus on its core markets if it wants to achieve profitability, while Uber insists it's "very much committed" to its African operations. Read more at Fortune.

THE LATEST FROM FORTUNE...

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• Cambridge Analytica Wasn't Quite What It Claimed to Be (by David Z. Morris)

VENTURE DEALS

• Nebanan, a Germany-based locally-focused social network for neighborhoods, raised €16 million ($19.8 million) in Series A funding. BurdaPrincipal Investments led the round, and was joined by investors including Lakestar, Deutsche Telemedien, NWZ, and pd ventures.

• Everledger, a U.K.-based blockchain startup, raised $10.4 million. GMP Securities and Fidelity Investments led the round, and was joined by investors including Vickers Ventures Partners, Graphene Venture Capital, FPV, Fenbushi, Bloomberg Beta and Rakuten.

HEALTH AND LIFE SCIENCES DEALS

• Dracen Pharmaceuticals Inc, a Baltimore-based developer of anticancer therapies, raised $40 million in Series A funding. Investors include Deerfield Management.

• Everledger, a London-based digital ledger, raised $10.4 million in Series A funding. GMP Securities and Fidelity Investments led the round, and were joined by investors including Vickers Ventures Partners, Graphene Venture Capital, FPV, Fenbushi, Bloomberg Beta and Rakuten.

• Valohai, a machine learning platform-as-a-service company, raised $1.8 million in funding. Superhero Capital led the round, and was joined by investors including Reaktor Ventures and Business Finland.

PRIVATE EQUITY DEALS

• Amteck, a portfolio company of Trive Capital, acquired Southeastern Automatic Sprinkler Co., a Madison, Miss.-based fire suppression company. No financial terms were disclosed.

• Ardenton Capital Corp made an investment in Achieve 1, a Richmond, Va.-based IT architecture and services company. Financial terms weren't disclosed.

• Infogix, which is backed by Thoma Bravo, acquired Lavastorm, a Boston-based provider of data preparation and advanced analytics. Financial terms weren't disclosed.

• NovaQuest Capital Management LLC acquired CutisPharma Inc, a Wilmington, Mass.-based specialty pharmaceutical company. Financial terms weren't disclosed.

OTHER DEALS

• Target Corp and Kroger Co are in talks about a possible merger, according to Reuters. Read more.

IPOs

• Ceridian HCM Holding, a Minneapolis-based maker of human resources software, filed for an IPO of up to $200 million. The firm posted loss of $9.3 million on revenue of $750.7 million in 2017. Thomas H. Lee Partners and Cannae Holdings back the company. Goldman Sachs and J.P. Morgan are joint bookrunners in the deal. The company plans to list on the NYSE and Toronto Stock Exchange under undisclosed symbols. Read more.

• Pivotal Software, a San Francisco-based company's predecessor spin off of DellEMC, filed for an IPO of up to $100 million. The firm posted loss of $163.5 million on $509 million in sales for the 12 months ended February 2, 2018. Michael Dell, Silver Lake, Dell, EMC, VMWare, General Electric, and Ford back the company. Morgan Stanley, Goldman Sachs, Citi, BofA Merrill Lynch, Barclays, Credit Suisse, RBC Capital Markets, UBS Investment Bank and Wells Fargo Securities are joint bookrunners in the deal. The company has not disclosed a stock exchange or symbol. Read more.

• Bioceres, a Rosario, Argentina GMO firm, said it now plans to raise $100 million in an offering of ADSs. The company previously cancelled a $130 million IPO of 11.8 million shares priced between $10 to $12 a piece. Jefferies, Piper Jaffray, SunTrust Robinson Humphrey, and Banco Santander remain joint bookrunners in the deal. It plans to list on the NYSE as "BIOX." Read more.

• FirstCaribbean International Bank, a Barbados-based spin off of the Canadian Imperial Bank of Commerce, filed to raise up to $100 million in an IPO. The firm posted income of $160.2 million on revenue of $424.9 million in the 12 months ending Oct. 31, 2017. Barclays, UBS Investment Bank, and CIBC are joint bookrunners in the deal. It plans to list on the NYSE as "FCI." Read more.

• Mereo BioPharma, a London-based rare disease drug firm, filed an IPO of up to $81 million. The firm posted loss of $52.5 million in 2017. Woodford Investment Management (42% pre-offering), Invesco (26.9%), Novartis (19.5%), and Hargreave Hale (4%), back the firm. Cowen & Company, BMO Capital Markets and RBC Capital Markets are joint bookrunners in the deal. It plans to list on the Nasdaq as "MREO." Read more.

• Surface Oncology, a Cambridge, Mass.-based cancer antibody developer, filed for an IPO of up to $75 million. The firm posted $45.4 million in loss on $13 million in revenue for 2017. Atlas Ventures (23%), F-Prime Capital Partners (10%), Lilly Ventures Management Group (16%), Novartis (16%), and New Enterprises Associates (16%) back the firm. Goldman Sachs, Cowen & Company and Evercore ISI are joint bookrunners in the deal. The firm plans to list on the Nasdaq as "SURF." Read more.

EXITS

• Providence Equity Partners agreed to sell its stake in KIN, an Indonesia-based telecommunications infrastructure provider, to Protelindo. Financial terms weren't disclosed.

• Equistone Partners Europe agreed to buy a majority of Small World Financial Services, a London-based cross-border payment service provider. Financial terms weren't disclosed. The sellers were FPE Capital and MMC Ventures.

• J.C. Flowers & Co. LLC acquired Jefferson Capital International, a St. Cloud, Minn.-based debt solutions provider, from Flexpoint Ford, LLC. Financial terms weren't disclosed.

PEOPLE

• BelHealth Investment Partners promoted Paul Barrett to managing director, Rebecca Yu to vice president and Peter Gurny to senior associate.

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Girls Say #NeverAgain

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THE DISH ON THE WORLD'S MOST POWERFUL WOMEN

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March 26, 2018

Good morning, Broadsheet readers! Kellyanne Conway may succeed Hope Hicks as White House comms director, Stormy Daniels gets her say on 60 Minutes, and brave young women speak out against gun violence. Have a vocal Monday.

EVERYONE'S TALKING

• Marching for their lives. Hundreds of thousands of protestors in 800 cities around the world took to the streets this past Saturday to join March for Our Lives rallies calling for action on gun control. Some of the most talked-about speeches came from young women—some as young as nine—calling for an end to senseless gun violence.

I've highlighted some of the most powerful moments below, but I highly encourage you to watch the videos (linked) in full. While the subject matter is heartbreaking, I am inspired by these young activists' bravery and eloquence.

Emma Gonzalez (age 18), stood silent on stage for more than four minutes, tears streaming down her face, as she marked the length of time of the Marjory Stoneman Douglas High School shooting (her time on the stage, and the rampage, lasted six minutes and 20 seconds). "In a little over six minutes, 17 of our friends were taken from us, 15 were injured, and everyone—absolutely everyone in the Douglas community—was forever altered," she said. "Fight for your lives before it's someone else's job."
Naomi Wadler (age 11), brought attention to female African American victims of gun violence during the march in Washington, D.C.: "I am here today to acknowledge and represent the African-American girls whose stories don't make the front page of every national newspaper. These stories don't lead on the evening news," Wadler said.
Yolanda Renee King (age 9), cited her grandfather, Dr. Martin Luther King, Jr.: "My grandfather had a dream that his four little children will not be judged by the color of the skin, but the content of their character," she said. "I have a dream that enough is enough. And that this should be a gun-free world, period."

For more on March for Our Lives and the #NeverAgain movement to curb gun violence, read this week's cover story from our sister publication: Time

ALSO IN THE HEADLINES

A note from Val: In Thursday's Broadsheet, I wrote that former BetterWorks CEO Kris Duggan was sued for an alleged rape. He was sued for an alleged assault in July 2017, a lawsuit that was dismissed in January 2018. A third party investigator found no wrongdoing. I deeply regret the error.

• Stormy speaks. In Stormy Daniels' much-anticipated 60 Minutes interview, the pornographic film star said she agreed to a $130,000 deal to stay silent about her alleged affair with Donald Trump because she feared for her safety. She says that man approached her in a parking lot, saying, "Leave Trump alone. Forget the story." She said he then looked at her daughter and said, "That's a beautiful little girl. It'd be a shame if something happened to her mom." Over the weekend, the NYT ran a deep dive into Daniels' career, in which Judd Apatow, who directed her cameos in Knocked Up and The 40-Year-Old Virgin, calls her "a very serious businesswoman." and "not someone to be underestimated."

• Conway running comms? Will Kellyanne Conway become the next White House communications director? It's not a "no." The senior counselor to the president told Fox News last week that she will fulfill "whatever my best and highest use is here." Trump has had three communications directors through his first 14 months in office, including Sean Spicer (he held the job two separate times), Anthony Scaramucci, and, most recently, Hope Hicks. Politico

• Shalala's no shoo-in. Donna Shalala, a former member of President Bill Clinton's cabinet, is now the front-runner Democratic candidate in Florida's 27th Congressional District. Despite her party bonafides (she was Clinton's cabinet secretary), she is being criticized because of past donations to Florida Republicans. Politico

• Pilots show progress. There are 75 broadcast pilots in various stages of production right now, all vying for primetime slots for the next TV season. About a third of those have female directors—up from fewer than 9% last year. Of the 19 female directors this year, three are black and three are Latina. Last year, all six women who directed pilots were white. New York Magazine

MOVERS AND SHAKERS: Tapestry, Inc. has appointed Anna Bakst CEO and brand president of Kate Spade.

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