On deals and dealmakers.

By Polina Marinova
September 26, 2017

FRESH FUNDING

Good morning, Term Sheet readers.

NEW $$$: Earlier this year, I interviewed Drift CEO David Cancel on Fortune’s weekly show, Founder Friday. Cancel had quietly built and successfully sold four software companies. He’s now working on a fifth. Today, Drift, his Boston-based sales platform, announced $30 million in Series B funding. General Catalyst led the round, and was joined by existing investors CRV and HubSpot. Sequoia Capital became the latest investor to back the company. I caught up with Cancel to discuss his latest fundraising. Here’s an excerpt:

Before Sequoia partner Pat Grady committed to the investment, he asked Cancel about whether he was planning to exit early before building Drift into a company that could “endure and withstand the test of time.”

“Our intrigue around David was that he’d been really successful in the past, but the open question was, ‘Is this a company he’s really building for the long-term,” Grady said.

Ultimately, Cancel managed to convince Grady that he’s committed to building a massive company. Drift will use the money from the Series B round to expand into marketing automation, open a new office in San Francisco, and hire more than 100 employees in the next year.

Earlier this year, Cancel told Fortune in a video interview that many first-time founders raise money when they don’t need it. “A lot of people try to get funding to hire someone,” he said in January. “But they already failed the first test. If you couldn’t convince one person [to join your company], you wouldn’t be able to convince a firm to give you money.”

Today, Cancel says that although Drift was well-funded before it even launched, he and his team of 15 didn’t touch the money for the first year of operation. “We acted like we were bootstrapped,” he says.

Read the entire story here.

SCOOPED UP: Managed by Q, a New York City-based on-demand office services startup, has made its first acquisition. The company acquired Hivy, a Paris-based task management office tool, for an undisclosed amount. Managed by Q has quietly raised $72.4 million in venture funding from investors including GV, Greycroft Partners, and RRE Ventures. Co-founder and CEO Dan Teran told Term Sheet that the acquisition is a significant step for the company’s international ambitions as some of Hivy’s clients have a global footprint. A recent Y Combinator graduate whose customers included Slack and SeatGeek, Hivy was looking to raise more money before Teran scooped it up. “With a global footprint and a presence in large offices on every continent, Hivy is the perfect complement to what we are building at Q on our mission to make it easy to run an office,” Teran said.

CEOs UNITE: Fortune and TIME partnered to host the 2017 CEO Initiative, a one-day event that brought together CEOs of some of the world’s most high-profile companies to exchange best practices and leadership techniques. Featured guests included JP Morgan’s Jamie Dimon, Pepsi’s Indra Nooyi, and Chobani’s Hamdi Ulukaya. The conference’s hot question was: “Is capitalism in crisis?” Quite a hefty issue to discuss in one day. As Alan Murray said in CEO Daily this morning:

“Capitalism may the best system for creating prosperity that mankind has yet invented, but there was a clear feeling among the CEOs in attendance that the system has to do a better job of spreading its benefits and proving its social value.”

You can read more coverage from the event here.

BREAKING: Speaking of CEOs, news just broke that the chief executive of Equifax is stepping down following a massive data breach. Things move fast.


THE LATEST FROM FORTUNE...

• Bass Pro just completed a $4 billion deal to buy Cabela’s (by Hallie Detrick)

• There’s no shame in losing to a machine (by Garry Kasparov)

• 3 steps Uber is taking toward changing its culture (by Kirsten Korosec)

• Justin Trudeau: Make NAFTA more feminist (by Claire Zillman)

• Inside China’s endurance sports empire (by Phil Wahba)

• Ohio Governor John Kasich talks CEOs, Amazon, and education (by Jonathan Vanian)

…AND ELSEWHERE

Deloitte hit by cyber-attack revealing clients’ secret emails. Longtime SoFi tech exec is stepping down. DNA startups are attracting more and more cash from venture funds. Anthony Weiner sentenced to 21 months in prison.


VENTURE DEALS

Tempus, a Chicago-based technology company building an operating system to battle cancer, raised $70 million in Series C funding, according to TechCrunch. Investors include Revolution Growth and NEA. Read more.

ProsperWorks, a San Francisco-based CRM for G Suite, raised $53 million in Series C funding. Norwest Venture Partners led the round, and was joined by investors including GV, Industry Ventures, Next World Capital, Storm Ventures and True Ventures.

Efinix, a provider of programmable product platforms and technology, raised $9.5 million in funding. Xilinx and Hong Kong X Technology Fund led the round, and were joined by investors including Samsung Ventures Investment Corporation, Hong Kong Inno Capital, and Brizan Investments.

Accelo, a San Francisco-based provider of service operations automation solutions, raised $9 million in Series A funding. Level Equity led the round, and was joined by investors including Fathom Capital and Blackbird Ventures.

Koho, a Canada-based financial services platform, raised $8 million in funding from Portag3 Ventures.

Fairphone, a Netherlands-based mobile device maker, raised €6.5 million ($7.7 million), according to TechCrunch. Investors include Pymwymic Impact Investing Cooperative and DOEN Participaties. Read more.

Jopwell, a New York-based diversity recruiting startup, raised $7.5 million in Series A funding. Cue Ball Capital led the round, and was joined by investors including Kapor Capital, Y Combinator, Omidyar Network, Valar Ventures, SJF Ventures, Blue Ivy Ventures and Teneo Ventures.

Nanoport, a Sunnyvale, Calif.-based mobile technology company, raised $7 million in funding. Horizons Ventures led the round.

Transit, a Canada-based transportation app, raised $5 million in funding, according to TechCrunch. Accel Partners led the round, and was joined by investors including Real Ventures, Accomplice, and BDC. Read more.

Lively, a San Francisco-based HSA platform provider, raised $4.2 million in funding, according to TechCrunch. Investors include Transmedia Capital, Streamlined Ventures, Y Combinator, SV Angel, Kevin Durant and The Durant Company. Read more.

Picniic, an operating system for the family home, raised $2 million in funding. Investors include Telenor.

The Inside, a direct-to-consumer home decor brand, raised $1.5 million in seed funding from Forerunner Ventures.


HEALTH AND LIFE SCIENCES DEALS

Eligo Bioscience, a France-based biotech company developing precision drugs to prevent and treat microbiome-associated diseases, raised $20 million in Series A funding. Khosla Ventures led the round, and was joined by existing investor Seventure Partners.

Fusion Pharmaceuticals, a Canada-based clinical-stage biopharmaceutical company, raised $21 million in Series A funding. Investors include Adams Street Partners, Seroba Life Sciences and Varian Medical Systems Inc.


PRIVATE EQUITY DEALS

CVC Capital Partners and other private equity owners are exploring options for Alvogen, a Pine Brook, N.J.-based generic drug manufacturer, including a sale, which could be valued at about $4 billion, according to Bloomberg. Read more.

Salt Creek Capital acquired Corporate Caterers, a Miami-based national franchisor catering company. Financial terms weren’t disclosed.

Exponent acquired a majority stake in Bullitt Group, a U.K.-based designer and manufacturer of mobile phones and consumer electronic products, according to The Financial Times. Financial terms weren’t disclosed. Read more.

MSI Capital Partners and Aavin Equity Partners recapitalized Green Diamond Sand Products, a Riddle, Ore.-based industrial minerals manufacturer. Financial terms weren’t disclosed.

Black Bay Energy Capital recapitalized SCS Technologies, a Big Spring, Texas-based provider of critical liquid production measurement equipment, controls and automation solutions. Financial terms weren’t disclosed.

Francisco Partners made “a significant growth equity investment” in Availity, a real-time health information network. Financial terms weren’t disclosed.


OTHER DEALS

Stahlgruber, a Germany-based car parts retailer, has selected second-round bidders for the company as bankers prepare debt packages for a deal that could value it at more than 1.2 billion euros ($1.4 billion), according to The New York Times. Read more.

Temasek will acquire a minority stake in CAA, a provider of entertainment and sports agency services, according to The New York Times. TPG Capital will remain the agency’s biggest shareholder. Read more.

Personify is acquiring Wild Apricot, a web-based management software provider. Financial terms weren’t disclosed.

Western Digital will seek an injunction to block the sale of Toshiba’s semiconductor business to a rival group. Read more at Fortune.


IPOs

iQiyi, a Chinese Netflix-style streaming company, is reportedly targeting a U.S. IPO as early as 2018. The company, which partners with Netflix and licenses shows from the U.S. company, is backed by Baidu. The company may be seeking a valuation of $10 billion. Bloomberg.

Switch Inc, a Las Vegas, Nev.-based data center provider, set the terms of its IPO, saying it plans to raise $469 million in an offering of 31.3 million shares between $14 to $16 a piece. The company reported revenue of $318.4 million and income of $31.4 million in 2016. Goldman Sachs J.P. Morgan, BMO Capital Markets, Wells Fargo, Citigroup, Credit Suisse, Jefferies, BTIG, Raymond James, Stifel, and William Blair are underwriters in the deal. Switch plans to list on the NYSE as “SWCH.” Terms of the deal have not yet been disclosed.

Merchants Bancorp, a Carmel, In.-based bank focused on FHA loans, filed for an IPO of $115 million.. The company posted assets of $3.1 billion by mid 2017. For 2016, Merchants posted revenue of $82.5 million. Sandler O’Neill + Partners, Stephens, Raymond James, and SunTrust Robinson Humphrey are joint bookrunners in the deal. The company plans to list on the Nasdaq as “MBIN.”

Rhythm Pharmaceuticals, a biotech developing obesity treatments, says it plans to raise $100 million in an offering of 6.7 million shares priced between $14 to $16 a piece. Rhythm posted loss of $29.1 million in 2016, and has yet to post a revenue. New Enterprise Associates (20.77% pre-offering), Third Rock Ventures(18.9%), MPM BioVentures (12.36%), OrbiMed Private Investments(12.13%), and Pfizer(6.6%) back the company. Morgan Stanley, Bank of America Merrill Lynch, and Cowen are underwriters in the deal. Rhythm plans to list on the Nasdaq as “RYTM.”

Royalty Flow, a Denver-based music royalties company, hopes to raise $11 million to $50 million in a Reg A+ IPO. The company is backed by Royalty Exchange Inc., and will hold up to 25% of rapper Eminem’s song catalog. Royalty Flow says copyrights on rapper Eminem’s albums totalled $5.1 million in 2016. It plans to add more musicians to its roster in the future.  Financial Times.


EXITS

Doorman, a San Francisco-based package delivery startup, will no longer be in operation in business, according to TechCrunch. The company said it was “joining forces with a larger team.” Doorman had raised more than $3 million in venture funding from investors including Motus Ventures, 500 Startups, Matrix Partners, Microventures, and VGO Ventures. Read more.

CVC Growth Fund agreed to acquire VelocityEHS, a Chicago-based provider of business environmental, health and safety regulation compliance solutions, from Actua. Financial terms weren’t disclosed.


FIRMS + FUNDS

IVP, a Menlo Park, Calif.-based venture capital and growth equity firm, raised $1.5 billion for its fund, IVP XVI. Read more at Fortune.

Trivest Partners, a Coral Gables, Fla.-based private equity and venture capital firm, raised $580.2 million for its sixth fund.

State Auto Labs Corp., the innovation arm of the State Automobile Mutual Insurance Company, formed a $25 million corporate venture fund to support entrepreneurs and innovations in the insurance industry.


PEOPLE

Elizabeth Flisser Rosman joined Cowen Investment Management as managing director and head of strategy. Previously, Rosman was at Reservoir Capital Group.

Matthew Unterlack joined SRS Acquiom as executive director. Previously, Unterlack was at QBE Insurance Group.

FirstPoint Equity named Craig Lewis as a managing director.


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Polina Marinova produces Term Sheet, and Lucinda Shen compiles the IPO news. Send deal announcements to Polina here and IPO news to Lucinda here.

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