term sheet

By Dan Primack
August 8, 2016

Shortcomings? What Shortcomings?

This is Erin Griffith filling in for Dan while he’s on vacation. Send deal news and tips here. Feedback is welcome on Twitter.

• This morning’s big deal news is the official tie-up of Wal-Mart and Jet.com. Buying Jet “accelerates our progress” toward giving customers what they want, according to Wal-Mart CEO Doug McMillon. Under this deal, “The seamless shopping experience we’re pursuing will happen quicker.”

The debate over whether the deal is a failure for founder Marc Lore rages on. Yes, we live in a world where selling your startup for $3 billion can be considered a failure.

The problem was Lore’s stated plan of taking on one of the Web’s handful of monopolies: Amazon, which acquired his first company after a price war. It was a goal so wild and ambitious that not a single other entrepreneur would dare go after it. For all the press his bold plot garnered, whenever I spoke with Lore, he was matter-of-fact about his plans, genuinely surprised that anyone would find them audacious. He always knew he was going to need to raise billions of dollars to make this work. It was nearly impossible to get him to concede that the odds were completely against him. It’s also possible he knew that Wal-Mart, the enemy of his enemy, would likely be desperate.

In the press release, Jet touts a $1 billion “run rate” in gross merchandize value sales. Sure, it feels cheap to extrapolate revenue based on one strong month of sales, but $80 million in monthly sales after just a year in business is nothing to sneeze at (even if you were burning far more more money than that to achieve it). If Jet had waited much longer to sell — say, after another round of funding with a higher valuation — it may have been too expensive for Wal-Mart to justify the price to its shareholders.

For its part, Wal-Mart is doing the awkward tightrope walk of a company that just bought itself some innovation, but can’t insult past attempts at innovation in the process. McMillon called the deal “another jolt of entrepreneurial spirit being injected into Wal-Mart.” The careful use of the word “another” is code for “never own up to our shortcomings.”

• Congratulations to Eric Martin, the funeral industry worker from Central Pennsylvania who won himself 100,000 shares of Jet stock a year ago in an unusual sign-up promotion. If anyone knows the exact share price for this deal, I’d love to do the math on what this guy walked away with.


THE BIG DEAL

Jet.com has sold to Wal-Mart (NYSE: WMT) for $3 billion with an additional $300 million in potential earn-outs. Founder and CEO Marc Lore is expected to stay on as head of the company’s e-commerce operations. Read more.


VENTURE CAPITAL DEALS

Airbnb, a San Francisco-based room-rental platform, is raising $850 million at a valuation of $30 billion. The company was valued at $25.6 billion last July. Read more.

Honor, a San Francisco-based provider of home care for older adults, announced today it has raised $42 million in Series B funding led by Thrive Capital. Additional investors include 8VC, Andreessen Horowitz, and Syno Capital. www.joinhonor.com/

Funding Societies, a Singapore-based peer-to-peer business lending marketplace, has raised $7.4 million in a Series A funding round led by Sequoia India with participation of existing investors Alpha JWC Ventures. http://www.fundingsocieties.com/

TheWaveVR, an Austin, Texas-based startup that aims to bring virtual reality to music performances, has raised $2.5 million in seed funding from KPCB Edge, Presence Capital, Rothenberg Ventures, RRE Ventures, The VR Fund, Seedcamp, and angel investors. www.thewavevr.com

CharityStars, a Milan, Italy-based online charity auction platform, has raised €2 million in Series A funding led by 360 Capital Partners, with participation from A.S. Roma soccer player Stephan El Sharaawy, and LastMinute Group CEO Fabio Cannavale. www.charitystars.com/

Alodokter, a Jakarta-based health information portal, has raised $2.5 million in Series A funding led by Golden Gate Ventures with participation from existing investors 500 Startups and entrepreneur Lim Dershing. www.alodokter.com/


PRIVATE EQUITY DEALS

Sterling Partners has made an undisclosed investment in DBi Services, a provider of infrastructure operations and maintenance. www.dbiservices.com

Vestar Capital Partners  acquired Mobile Technologies Inc., a Portland, Ore.-based provider of mobile phone software and services, from Hammond, Kennedy, Whitney & Company Inc. Financial terms weren’t disclosed. mobiletechinc.com/

AIG will contribute a controlling stake of Conshohocken, Penn.-based NSM Insurance Group, a provider of of insurance program administration, to a joint venture that will be majority owned by ABRY Partners. Financial terms weren’t disclosed. nsminc.com/

Hoover Container Solutions, Ferguson Group, and CHEP Catalyst & Chemical Containers, three providers of container solutions products in the energy, petrochemical, and general industrial markets, are merging to form Hoover Ferguson Group. Hoover Container Solutions is owned by First Reserve. Terms were not disclosed. www.hooversolutions.com/

Apollo Global Management is in discussions to acquire Rackspace Hosting (NYSE:RAX), a Windcrest, Texas-based cloud services provider, sources told Reuters. Apollo is reportedly negotiating a price of more than $3.5 billion. Read more.


IPOs

• LoopUp, a UK-based conference calling startup, will raise $11.7 million in an IPO, on the London Stock Exchange, according to the Financial Times. The listing would give the company a market capitalization of around $52 million. Read more.


EXITS

Apple has acquired Turi, a machine learning platform for developers and data scientists based in Seattle, for approximately $200 million. The company had raised $25 million from Madrona Venture Group and New Enterprise Partners.   Read more.

Dentsu Aegis Network, a subsidiary of Dentsu, will acquire a majority stake in Merkle, a data marketing company based in Baltimore. Merkle had raised $123.5 million in funding from investors, including Technology Crossover Ventures. www.merkleinc.com/

Mobile TeleSystems PJSC, Russia’s largest wireless carrier, is selling its 50.01% stake in Uzbekistan’s Universal Mobile Systems to the Uzbek government. The announcement comes after a corruption probe by U.S. regulators, according to Bloomberg. Read more.

Investcorp has sold Crisps Topco Limited, the UK_based maker of Tyrrells-branded snack foods, to Amplify Snack Brands, an Austin, Texas-based company, for £300 million. Investcorp acquired the company in August 2013 for £100 million.  www.tyrrellscrisps.co.uk/

ICV Partners has completed the sale of portfolio company Mallet & Company, a Pittsburgh-based, manufacturer of specialty ingredients, to Vantage Specialty Chemicals, a portfolio company of The Jordan Company. Terms were not disclosed. www.malletoil.com/

Facebook has acquired the team from Eyegroove, a San Francisco-based mobile video startup, according to the company’s website. Eyegroove was backed by $3.5 million from investors including Matt Papakipos, Roger McNamee, Amarjit Gil, and Bill McLean. www.eyegroove.com/


OTHER DEALS

Aeropostale is negotiating a potential sale to Versa Capital Management that would keep many stores in the bankrupt teen apparel chain open, Reuters reports. Read more.

Motorcar Parts of America, (Nasdaq:MPAA) acquried Winchester, Va.-based ZOR Industries, a developer of brake power boosters and turbochargers. zorturbo.com/

Steinhoff International Holdings NV, a South African furniture conglomerate, will buy Mattress Firm Holding, a specialty bedding retailer based in Houston, Texas, for $3.8 billion, which includes debt, according to Reuters. Read more.

Incipio Group, a consumer tech solutions platform based in Irvine, Calif., has acquired Griffin Technology, a creator of mobile accessories, based in Nashville, Tenn. Terms were not disclosed. griffintechnology.com


FIRMS & FUNDS

 

No fund news this morning. 


MOVING IN, ON & UP

No people news this morning. 

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