On deals and dealmakers.
DAYS OF CHANGE
Happy Friday, Term Sheet readers.
Aaron Schildkrout, Uber’s head of driver product, came to the office a few weeks ago for a Q&A. It was right after Dara Khosrowshahi had been appointed CEO, and we had a pretty frank conversation about a company trying to undo months of damage from PR missteps including a video of its former chief, Travis Kalanick, berating a driver (he later apologized) and a passenger boycott promoted on social media.
In an effort to woo drivers, Uber launched an initiative called, 180 Days of Change — a campaign that aims to make “meaningful changes and improvements” to the driving experience. The most notable change came when Uber released its in-app tipping option in July after resisting it for a number of years. Other changes include a shorter cancellation window, driver injury protection insurance, and increasing driver’s takehome pay for UberPool trips.
Previously, Schildkrout founded a dating app, meditated “full time” for two years, and taught at a charter school. Now he spends his time addressing driver complaints around earnings, stress, support, and communications.
Below are the highlights of our conversation:
FORTUNE: Uber is left picking up the pieces after a tumultuous 10 months. In June, you launched 180 Days of Change. What was the genesis of this campaign?
SCHILDKROUT: Around the turn of the year, we talked to thousands of drivers in various forms — one on one, in groups, through surveys — to get a deeper understanding of how we were doing. What we found was, frankly, we weren’t doing that well. There was a deep need for change. Based on that research, we kicked off 180 Days of Change.
Can you give me an example of the type of feedback you received?
SCHILDKROUT: When we talked to drivers, we found again and again some very clear themes. Drivers didn’t feel like we were listening enough. Drivers didn’t feel like the support was there. Drivers weren’t satisfied with a number of key aspects to their earnings. There were parts of our platform where we offered flexibility, but we weren’t fully delivering on that promise.
In your time at Uber, what is one product initiative that you worked on that didn’t pan out as planned?
SCHILDKROUT: UberPool has always been in some ways an emblem of what ridesharing is all about. Using every single available seat in every car in order to reduce congestion, reduce the prices of moving around a city, really make transportation in a city as smooth as possible.
But when you ask drivers about UberPool, you get a very consistent extremely negative response, and there are reasons for that. We really hadn’t invested in the driver side of the Pool experience. Passengers love the low price, they love the efficiency, but for drivers, it’s actually a lot of work and often quite stressful. So we’ve got some interesting ideas of how we can fix that and improve in that area.
Uber operated without a CEO for several months. What was the staff’s reaction when it was announced that Khosrowshahi was selected for the role?
SCHILDKROUT: Some things I’ve noticed early on is that this is a person who seems to be truly about team. This is a person who knows how to compete, how to run a business, and how to think about the future. That ambition and that sense of wanting to build something great is exciting and very much in line with Uber’s DNA. I think after he joined there was pretty universal excitement and a strong hope of where we’re headed as a company.
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• Stellar Labs, a Palo Alto, Calif.-based private aviation tech company, raised $26.3 million in Series A funding. Investors include Global Jet Capital, Columbia Equity Partners, and Expa.
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• UrbanSitter, a San Francisco-based an online operator of a childcare marketplace, raised $17 million in Series C funding. Advance Venture Partners led the round, and was joined by investors including Canaan Partners, Aspect Ventures, DBL Investors, Shatter Fund, First Round Capital, Menlo Ventures and Rustic Canyon Partners.
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HEALTH AND LIFE SCIENCES DEALS
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• Bioarray Genetics, a Farmington, Conn.-based personalized medicine startup, raised $4 million in Series B funding. Investors include Quark Venture and GF Securities.
PRIVATE EQUITY DEALS
• Enhanced Healthcare Partners made an investment of an undisclosed amount in SCA Pharmaceuticals, a Little Rock, Ark.-based company which specializing in preparing sterile pharmaceuticals for hospitals, pharmacies and healthcare facilities. Financial terms weren’t disclosed.
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• Switch Inc, a Las Vegas, Nev.-based data center provider raised $531 million in an offering of 31.3 million shares at $17, above its previously stated range of $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.”
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• Navient acquired Earnest, a San Francisco-based lender that uses data science to re-build financial services, for $155 million in cash, according to The Wall Street Journal. Earnest had raised approximately $320 in cash and debt from investors including Accomplice, Andreessen Horowitz, Atlas Ventures, Battery Ventures, and FJ Labs. Read more.
• Clearview Capital sold its majority interest in St. Croix Hospice, an Oakdale, Minn.-based hospice programs provider, to an affiliate of The Vistria Group. Financial terms weren’t disclosed.
FIRMS + FUNDS
• Catherine Ulrich joined FirstMark Capital as a partner.
• Gryphon Investors named Wes W. Lucas as a partner. Previously, Lucas was at SIRVA.
• Bow River Capital Partners hired Drew Lacey as a senior associate and Robert Fortier and Clay Fox as associates.
• Tribeca Venture Partners hired Anna Whiteman as a senior associate and Nitya Rajendran as an associate.