On deals and dealmakers.
Good morning. A pair of Friday fundraising scoops for you…
Unicorn watch: Houzz, an online platform for home remodeling and design services, is close to finalizing a new $400 million round of funding that values the company at around $4 billion, according to a company spokesperson. The filings were uncovered by Equidate, a platform for trading stock in private companies.
Fortune first reported that Houzz was raising a large new round of funding in April. At the time, the company had been talking to investors about raising as much as $500 million at a valuation that could top $5 billion.
A Houzz spokesperson would not elaborate on the source of the funding.
In this round, Houzz’s share price increases from $7.49 per share to $11.28 per share. Extrapolating that price from Houzz’s $2.3 billion valuation (excluding the capital raised) gives the company a valuation between $3.8 billion and $3.9 billion. Assuming the company will increase its employee option pool with this round brings the company’s approximate valuation to $4 billion, not counting the capital raised, an Equidate analysis shows.
Founded in 2009 by Adi Tatarko and Alon Cohen, Houzz has raised $213 million in funding prior to this new round. The Palo Alto-based company’s latest round, a $165 million Series D in late 2014 led by Sequoia Capital, valued it at $2.3 billion.
PE in VC’s clothing: Vista Equity Partners is leading a large new round of funding in Upside, a New York-based business travel startup founded by Priceline founder Jay Walker, according to sources familiar with the situation.
The $100 million round values Uptake at around $600 million, sources say. In January Upside raised $50 million in funding from Leucadia National and Red Ventures. That round valued the company at $200 million. An Upside representative declined to comment.
Fortune recently interviewed Walker, who explained the company’s business model:
We buy travel at wholesale using private deals. Airlines and hotels are willing to discount to get the business traveler in part because they can substitute that business traveler for a less valuable leisure traveler in our system. So the suppliers say, “As long as I don’t have to reveal the discount, I will give it to you.” This isn’t a unique idea—they give companies like IBM and GE discounts, too. But you and I can’t buy at those rates. So we accomplish that by packaging. By selling your air and hotel together, we can pass 90% of that discount along. We make our margin that way. Say a flight’s $1,000—we might buy it for $850 and sell it for $900.
That satisfies the sellers and the employer. But what about the traveler? … The business traveler wants to maximize comfort and convenience within the limits allowed by their employer. So we pass part of the discount to the employer and part to the traveler, in the form of free gift cards, as a thank you. Notice this doesn’t change our profit margins. We’ve aligned interests. So we can make more money if we can show you how to spend less with our preferred providers, where we have a much better deal.
M&A: L’Oréal has agreed to sell The Body Shop, its ailing personal care chain of stores, for €1 billion ($1.1 billion) to Natura Cosméticos. The company acquired the chain from its owners 11 years ago for £652 million ($1.14 billion).
In March I asked CEO Jean-Paul Agon about the asset, which L’Oréal had put up for sale in February. I noted that he was bullish about The Body Shop just a few years ago. What changed?
Jean-Paul Agon: We tried and tried and tried. And maybe in this case we are being too loyal to the brand’s spirit. Because we didn’t want to change too much, in fact, we didn’t change enough. This is always a difficult balance. You have to evolve, but also be respectful to brands. We really put in our best efforts for 10 years. I still think it’s a beautiful brand with great awareness everywhere in the world, but maybe someone else can do something better with it.
Fortune: It’s surprising, given that the Body Shop’s whole ethos of natural, eco-friendly products has become more relevant and mainstream in the past 10 years.
Agon: That’s true. But maybe also because it has become more mainstream, it’s less unique. There is always a flip side.
Today in Uber: More bad culture stuff….
…and an acqui-hire deal for Luxe, the San Francisco-based parking app which employs 65 people, WSJ reports. Luxe had raised $75 million from the following new Uber shareholders: Hertz, Venrock, Acecap, BoxGroup, Cherubic Ventures, Data Collective, Eniac Ventures and GV.
Have a great weekend!
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• Wavecell, a Singapore-based cloud communications platform, raised $8.15 million in Series B funding. Qualgro and MDI Ventures led the round, and were joined by investors including Wavemaker Partners.
• Tractable, a San Francisco and London-based deep learning company focused on computer vision, raised $8 million in Series A funding. Ignition Partners led the round, and was joined by investors including Zetta Venture Partners.
• Carsome, a Malaysia-based consumer-to-retail used car platform, raised $6 million in funding. Gobi Partners led the round, and was joined by investors including Lumia Capital, Innoven, 500 Startups and Spiral Ventures.
• Shedul, a scheduling platform for the the salon and spa industry with offices in Dubai and Warsaw, raised $6 million in funding. Dubai’s Middle East Venture Partners led the round, and was joined by BECO Capital and Lumia Capital. Read more.
• Cognata, an Israel-based simulation engine for autonomous vehicle developers, raised $5 million in funding. Investors include Emerge, Maniv Mobility, and Airbus Ventures.
• CityMD, a New York-based urgent care provider, raised funding of an undisclosed amount from Warburg Pincus.
• Canalyst, a Vancouver, British Columbia-based equity research technology provider for institutional finance professionals, raised funding of an undisclosed amount from WorldQuant Ventures.
• Conga, a Colorado-based provider of sales and business productivity solutions, raised funding of an undisclosed amount from Salesforce Ventures.
• Daily Harvest, a New York-based direct-to-consumer superfood delivery platform, raised funding of an undisclosed amount from investors including Gwyneth Paltrow, Serena Williams, Collaborative Fund, WME Ventures, 14W, and Rubicon Venture Capital. Read more at Fortune.
HEALTH AND LIFE SCIENCES DEALS
• Platelet Biogenesis, a Chestnut Hill, Mass.-based biotechnology company, raised $10 million in Series A funding. Qiming led the round, and was joined by investors including Vivo Capital, VI Ventures, Adena Partners and eCoast Angels.
PRIVATE EQUITY DEALS
• Caisse de dépôt et placement du Québec invested $100 million in AvidXchange, a Charlotte, N.C.-based provider of payment automation solutions. The investment was part of a $300 million funding round with contributions from Mastercard, Temasek and Peter Thiel.
• TA Associates made an investment of an undisclosed amount in Biocomposites, a U.K.-based maker of calcium compound biologics.
• Sovos Brands, which is backed by Advent International, agreed to acquire Rao’s Specialty Foods Inc, a New York-based producer of pasta sauce. Financial terms weren’t disclosed.
• Worley Claims Services, which is backed by Aquiline Capital Partners, acquired Apex Claims Service of New England, a Westfield, Mass.-based provider of daily and catastrophe commercial and residential property claims. Financial terms weren’t disclosed.
• Home Capital Group (TSX:HCG) received takeover approaches led by private equity firms Onex and Brookfield Asset Management but is moving ahead with plans to stay independent, according to Reuters. Read more.
• Digital Realty Trust agreed to acquire fellow data center operator DuPont Fabros Technology (NYSE:DFT) in a $7.6 billion deal, according to Reuters. The $63.60 per share offer represents a premium of 14.9% to DuPont Fabros’ close. Read more.
• L’Oreal (ENXTPA:OR) has started exclusive talks to sell its The Body Shop business to Brazilian make-up company Natura Cosmeticos (BOVESPA:NATU3) in a possible 1 billion euros ($1.1 billion) deal.
• Bain Capital is replacing rival KKR & Co in a Japanese government-led consortium bidding for Toshiba Corp’s (TSE:6502) chip unit, according to Reuters. Bain would be a minority investor in the consortium. Read more.
• Tivity Health, a Franklin, Tenn.-based provider of fitness and health improvement programs, is considering a potential sale after receiving takeover interest from private equity firms, according to Reuters. Read more.
Emaar Properties, a Dubai-based company that built the world’s tallest tower, plans to launch the IPO of its real estate development business in by November, according to Emaar chairman Mohamed Alabbar as reported by Reuters. Emaar said earlier this week that it would offer about 30% of that business. The IPO will be the largest on the Dubai markets in two and a half years, when Emaar Properties listed its shopping mall and retail subsidiary, Emaar Malls. That business was valued at $10.27 billion, or 37.7 billion dirhams, according to Reuters.
• WeWork,a New York-based co-working startup, acquired Fieldlens, a New York-based mobile communication system for the construction industry. Financial terms weren’t disclosed. Fieldlens raised more than $12 million in venture funding from investors including Borealis Ventures, SoftBank Capital, Lerer Hippeau Ventures, Moderne Ventures, and Primary Venture Partners. Read more.
• PAI Partners is in talks to sell its majority stake in DomusVi, an operator of nursing homes with offices in Spain, France, and China, to Intermediate Capital Group and Sagesse Retraite Santé. Financial terms weren’t disclosed.
• Uber is in advanced talks to acquire much of the engineering team from Luxe Valet, a San Francisco-based on-demand parking and valet service provider, according to The Wall Street Journal. Luxe raised more than $75 million in venture funding from Acecap, BoxGroup, Data Collective, Eniac Ventures, Foundation Capital, Hertz, Venrock, and GV. Read more.
FIRMS + FUNDS
• Blackstone Group, a New York-based investment firm, raised €7.8 billion ($8.7 billion) for its Blackstone Real Estate Partners Europe V, a real estate fund that focuses on property-related transactions in Europe.
• Adelis Equity Partners, a Sweden-based private equity firm, raised $595.8 million for its second buyout fund, Adelis Equity Partners Fund II.
• Castle Creek Capital Partners, a Rancho Santa Fe, Calif.-based alternative asset management firm, raised more than $267 million for its sixth fund.
• The Geekdom Fund, a San Antonio, Texas-based venture capital fund, raised $20 million for a second venture fund.
• Christer Wiberg, Taus Wolfsberg and Christer Johansson joined Alvarez & Marsal as managing directors.
• Dylan Morris joined CRV as a general partner. Previously, Morris was at Innovation Endeavors and Integrated Plasmonics.
• Scott Leffler joined Gemspring Capital as a senior associate. Previously, Leffler was at Cerberus Capital Management.