Term Sheet — Wednesday, November 23

Nov 23, 2016

ET CETERA

A few brief notes before the holiday begins...

•  IPO Watch: “Uncertainty” has been the business world’s favorite word ever since the election, and it has created a split outlook in the IPO market. Some see the uncertainty as a reason to push their offering out as fast as possible, while others view it as a reason to wait. See today’s listings below as evidence: Presidio, backed by a PE firm, filed to go for it, while AppDynamics, back by venture investors, has decided to hold off.

•  Instagram has had an engineering office in New York City since the beginning of this year, but in recent months, the company has been quietly hiring people to work on an e-commerce initiative, Term Sheet has learned. Product director Blake Barnes has been involved in the hiring. The group will include up to 50 people working on designing what e-commerce will look like on Instagram. The app famously makes it difficult for users to link outside of the app. Currently Instagram advertisers have the option to include a “buy button” on their ads, but the button sends users out of the app to make purchases. There are no plans to launch anything imminently—the project has a two-to-four year outlook.

As I noted in Monday’s Term Sheet, social commerce, and the elusive “buy button” have long been the holy grail of social networks. Between BuzzFeed’s commerce initiative and this, I’m wondering if commerce is the new advertising…

•  It’s difficult for a quality consumer-facing startup of any kind to get very big before venture capitalists, strategic investors, private equity firms, and the media hype machine all come knocking. That makes Chewy.com notable for flying under the radar. Unless you have a pet, you’ve likely never heard of the five-year-old Florida-based pet food e-commerce company. It’s on track to hit $880 million in revenue this year, though as Bloomberg reports, it is not profitable. The company just raised $75 million in funding from BlackRock, bringing its total funding to $246 million.

•  Publishing note: Term Sheet will be eating turkey tomorrow and Friday. Enjoy the weekend!

THE LATEST FROM FORTUNE...

•  Ireland’s tax haven, post-Brexit

•  Trump keeps an open mind on Paris climate deal

•  Insane gifts for car people

•  Sanctions, post-Wells Fargo

•  China’s plans for TPP

•  Facebook, censorship, and China: a minefield

•  Elon Musk has a fake news troll

•  Meg Whitman’s mad scientist strategy

•  The struggles of the food delivery business

•  Free speech in the Trump era

•  Trump called Apple CEO Tim Cook

...AND ELSEWHERE

PE dry powder is at its highest levels since 2008. The merits of financial overhaul. Dredging up the mortgage meltdown controversies. Trump Foundation violated a self-dealing ban. Billionaires and the press in the era of Trump. Betting on lawsuits. The spies of Tinder. Do programmers need a code of ethics? Bendy iPhone. We tell ourselves stories in order to disrupt.

VENTURE DEALS

•  Shockwave Medical, a Freemont, Calif.-based startup focused on the treatment of calcified cardiovascular disease, has closed $45 million in Series C financing led by Sectoral Asset Management, with participation from T. Rowe Price Associates and existing investors Sofinnova Partners, Venrock, RA Capital, Deerfield, and Ally Bridge Group.

•  Zola, a New York-based wedding registry site co-founded by Kevin Ryan, has raised $25 million in Series C funding at a $200 million valuation led by Lightspeed, according to TechCrunch. Read more.

•  Knowlarity Communications, a New Delhi-based telephony company has raised Rs 133-crore ($20 million) in Series C funding led by Delta Partners Capital, alongside existing investors Mayfield Fund and Sequoia India.

•  8i, a Wellington, New Zealand-based virtual reality startup backed by Founders Fund, has raised $20 million in Series B preferred stock, according to an SEC filing.

•  Heal, a Santa Monica-based on-demand app for doctor house calls, has raised $14.8 million in new funding, according to an SEC filing.

•  Soul Machines, an Auckland, N.Z.-based developer of avatars, has raised $7.5 million in Series A funding led by Horizons Ventures with Iconiq Capital.

•  ItemMaster, a Chicago-based provider of “certified brand content,” has raised $7.5 million in Series A financing round from Edison Partners with participation from Chicago Ventures.

•  Instaclustr, a Canberra, Australia-based open source data platform, has raised $7 million in investment led by Bailador Technology Investments with participation from new investor Our Innovation Fund LP and existing investor ANU Connect Ventures.

•  Hornet, a San Francisco-based gay social network, has raised $8 million in funding led by Ventech China.

•  Maple Hill Creamery, a Stuyvesant, New York-based producer of organic dairy items, has taken an investment of undisclosed size from Sunrise Strategic Partners.

•  Hopper, a Cambridge, Mass.-based travel startup, has raised $3.5 million in new equity funding, according to an SEC filing.

•  Agricool, a France-based argiculture startup, has raised €4 million ($4.3 million) in funding from Daphni and angel investors.

•  Cashboard, A Berlin-based wealth management startup has raised €3 million ($3.1 million) in Series A funding led by Digital Space Ventures with participation from existing investors Redalpine Capital, Earlybird, and 500 Startups.

PRIVATE EQUITY DEALS

•  Advent International will acquire Brammer International, a British publicly-traded industrial parts distributor, for 221.5 million pounds ($274.8 million). The offer represents a premium of 69% to Brammer’s closing price Tuesday.

•  Tenex Capital Management has made an investment of undisclosed size in Pugh Lubricants, an Asheboro, N.C. lubricant distributor.

OTHER DEALS

Del Frisco's Restaurant Group (NASDAQ:DFRG) may need to sell itself as pressure mounts from activist investor Engine Capital, according to Reuters. Read more.

IPOs

•  Presidio, a New York City-based provider of IT solutions, has filed its S-1 to go public. The company is owned by Apollo Global Management, which acquired it in November 2014. Presidio reports $2.7 billion in revenue with a loss of $3.4 million for its last fiscal year. J.P. Morgan and Citigroup will act as lead book-running managers, with Barclays and RBC Capital Markets participating. Read more.

•  AppDynamics, a San Francisco-based maker of performance management tools for app makers, has postponed its planned IPO, according to the Wall Street Journal. The IPO could to value the company as high as $3 billion. The company has raised $314 million in funding from investors including Goldman Sachs, Greylock, Kleiner Perkins, IVP, Lightspeed Ventures, General Atlantic, Cross Creek Advisors, Battery Ventures, Adage Capital Management, and Altimeter Capital. Morgan Stanley and J.P. Morgan Chase are lead underwriters for the deal. Read more.

EXITS

•  Airbnb is in talks to acquire Xiaozhu.com, a Chinese home rental startup, according to Bloomberg. Xiaozhu has raised $150 million from investors including BAI (Bertelsmann Asia Investments), Joy Capital, Capital Today, Morningside Ventures, and Magic Stone Alternative Investments. Read more.

•  Wellspring Capital Management has acquired Hoffmaster Group, an Oshkosh, Wisc.-based manufacturer of disposable tableware, from Metalmark Capital. Financial terms were not disclosed.

•  Magellan Health (NASDAQ: MGLN) has agreed to acquire Veridicus Holdingsa Salt Lake City provider of pharmacy benefit management, medication therapy management, clinical care management, and Medicare Part D services—from Gauge Capital.

•  Bluebridge, a Fishers, Ind.-based SaaS platform for churches, tourism entities and employers, sold its church and tourism business units in two separate transactions totaling $8 million The buyers are Echurch powered by PushPay and Simpleview, respectively.

FIRMS + FUNDS

•  Copia Agro & Food, a Tel Aviv-based fund for investing in agricultural and food projects developed by Israeli research institutes, is seeking $50 million in funding to expand its investment activities.

•  Caffeinated Capital, a San Francisco early stage venture firm founded by Raymond Tonsing, has raised $17 million for Caffeinated Capital Opportunity Fund I LP, according to an SEC filing. The fund has a $75 million target.

•  SV Angel, a San Francisco investment fund run by Ron and Topher Conway, has raised $53 million for SV Angel VI LP, according to an SEC filing.

•  Playground Ventures, a Palo Alto-based venture firm run by Android founder Andy Rubin has is seeking $500 million for PlayGround Ventures II LP, according to an SEC filing.

•  Draper Nexus, an early stage venture firm based in San Mateo, Calif., and Tokyo, has raised $175 million for its second fund.

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