Good morning, Term Sheet readers.
BITCOIN POPS: Jamie Dimon is somewhere shaking his head and cringing right now. Bitcoin exploded last night. The digital currency broke $7,000 per coin for the first time. (For context: it cost $2,000 in May.) Oh, and if that’s not enough, Amazon just bought three cryptocurrency-related domains, and no one knows why. Brace yourselves because this wild ride is far from over.
HOLD THE CHAMPAGNE: HelloFresh, the Germany-based meal kit company, made its market debut, and it wasn’t horrible. In fact, it gained as much as 4% on the first day of public trading, which valued the business at more than double Blue Apron. So things are looking up for HelloFresh, but don’t get too excited. Here are a few reasons it shouldn’t pop the champagne just yet:
• Deep-pocketed rivals: The shadow of Amazon is always looming. Shortly after Blue Apron went public, its shares plummeted largely because of investor concern around Amazon’s purchase of Whole Foods. HelloFresh faces the same pressure from deep-pocketed rivals such as Amazon and Albertsons (which recently acquired meal kit startup Plated).
• Marketing expenses: HelloFresh will need to keep spending aggressively on marketing to win customers. Although the company has minimized its losses, its marketing costs are still 25% of its expenses. A larger challenge than winning customers? Retaining them. An Emory University marketing professor estimates that just 17% of HelloFresh customers are still using the service after six months. In other words, the company will have to pay up to attract new customers so it can replace the ones who jump ship.
• Meal kit fatigue: While consumers are initially excited about meal kit delivery, they seem to be losing their appetite once the novelty of the service wears off. Remember, you still have to stand in the kitchen and actually cook the meal….it takes time & patience, which are two qualities rarely found in our short-attention span world.
THE LATEST FROM FORTUNE...
• Elon Musk: Why Tesla fired 700 employees (by Kirsten Korosec)
• The SEC is cracking down on celebrity ICOs (by Jeff John Roberts)
• I’m a former FBI agent. Here’s how I think Mueller flipped Papadopoulos (by Joe Navarro)
• Uber is LinkedIn’s top company to watch in 2017 (by Emily Price)
• SouChe, a China-based retail and finance platform for the automotive industry, raised $333 million in Series E funding. Alibaba led the round, and was joined by investors including Warburg Pincus, Primavera Capital and CMB International.
• TransferWise, a U.K.-based provider of international money transfer services, raised $280 million in funding. Investors include Old Mutual Global Investors, IVP, Sapphire Ventures, Mitsui & Co, and World Innovation Lab. Read more at Fortune.
• Xiaozhu.com, a China-based house-sharing platform, raised $120 million in funding. Yunfeng Capital led the round, and was joined by investors including Joy Capital, Morningside Ventures and Capital Today.
• InVision, a New York City-based product design platform, raised $100 million in Series E funding. Investors include Battery Ventures, Accel, Tiger Global Management, Firstmark, ICONIQ Capital, Spark Capital and Geodesic.
• GetYourGuide, a Germany-based online booking platform for travel activities, raised $75 million in Series D funding. Battery Ventures led the round, and was joined by investors including KKR, Spark Capital, Highland Europe, Sunstone Capital and Nokia Growth Partners.
• Ayla Networks, a Sunnyvale, Calif.-based Internet of Things platform-as-a-service company, raised $60 million in Series D funding. Run Liang Tai Fund and Sunsea Telecommunications Co. Ltd led the round.
• Instart Logic, a Palo Alto, Calif.-based company focusing on cloud, web and mobile application performance, raised $30 million in funding. ST Telemedia led the round.
• MariaDB Corporation, a Finland-based open source database, raised $27 million in funding. Alibaba Group led the round, and was joined by investors Intel Capital, California Technology Ventures, Tesi, SmartFin Capital and Open Ocean.
• BigPanda, a Palo Alto, Calif.-based and Tel Aviv-based provider of algorithmic service operations solutions for enterprise IT, raised $23 million in funding. Greenfield Partners led the round, and was joined by investors including Sequoia Capital, Battery Ventures and Mayfield.
• Shippo, a San Francisco-based provider of shipping solutions for business, raised $20 million in Series B funding. Bessemer Venture Partners led the funding, and was joined by investors including Union Square Ventures, SoftTech VC, VersionOne Ventures and 500 Startups.
• Glint, a Redwood City, Calif.-based employee engagement platform, raised $20 million in Series D funding round. Investors include Bessemer Venture Partners, Meritech Capital Partners, Norwest Venture Partners, and Shasta Ventures.
• Optimus Ride, a MIT spinoff company developing self-driving technology, raised $18 million in Series A funding. Greycroft Partners led the round, and was joined by investors including Emerson Collective, Fraser McCombs Capital and Joi Ito.
• BondIT, an Israel-based fintech company, raised $14.25 million in funding from Fosun Group.
• AppZen, a Sunnyvale, Calif.-based provider of artificial intelligence solutions for back office automation, raised $13 million in Series A funding. Redpoint Ventures led the round, and was joined by investors including Resolute Ventures.
• 3YOURMIND, a Germany-based provider of software solutions for additive manufacturing, raised $12 million in Series A funding. Unternehmertum Venture Capital Partners led the round, and was joined by investors including TRUMPF Venture.
• TourRadar, an Austria-based multi-day tour marketplace, raised $10 million in Series B funding. Endeit Capital led the round, and was joined by existing investors including Cherry Ventures and Hoxton Ventures.
• Reaction Commerce, a Santa Monica, Calif.-based open source ecommerce platform aimed at online retailers, raised $8.5 million in Series A funding. GV led the round, and was joined by investors including CrossCut Ventures, Double M Partners, and Female Founders Fund.
• CrossEngage, a Berlin-based marketing technology company, raised 5 million euros ($5.8 million) in funding. Vorwerk Ventures and Earlybird Venture Capital led the round.
• Snatch, a U.K.-based developer of an augmented reality game raised £4.4 million ($5.8 million) in seed funding, according to TechCrunch. Initial Capital led the round, and was joined by investors including First Minute Capital, CrunchFund, Simon Equity Partners, Cassius Family Fund, Hanson Asset Management, Velocity Technology Fund and Silicon Valley Bank.
• Lunar Wireless, a Detroit-based mobile data plan company with no monthly fees, raised $4.1 million in funding. 8VC led the round.
• Beauty Bakerie, a San Diego, Calif.-based cosmetics brand, raised $3 million in seed funding. Unilever Ventures led the round, and was joined by investors including 645 Ventures and Blue Consumer Capital.
• 4505 Chicharrones, a San Francisco-based premium pork rind company, raised funding of an undisclosed amount from CircleUp Growth Partners.
• Alpine Start Foods, an instant coffee brand, raised funding of an undisclosed amount from Slow Ventures.
PRIVATE EQUITY DEALS
• Platinum Dermatology Partners, which is backed by Sterling Partners, acquired Howsden Dermatology, a Garland, Texas-based provider of medical and surgical dermatological care. Financial terms weren’t disclosed.
• Woodlawn Partners acquired Truesdell Corp, a Tempe, Ariz.-based provider of restoration, strengthening, protection and maintenance of concrete structures. Financial terms weren’t disclosed.
• Primus Capital made an investment of an undisclosed amount in fusionZONE Automotive, a Palisades, Calif.-based provider of digital marketing technologies for car dealers and OEMs.
• AC&A Enterprises, LLC, a portfolio company of AE Industrial Partners, LLC, acquired Applied Composites Engineering, Inc, an Indianapolis-based company specializing in advanced composites engineering and manufacturing for aerospace and defense applications. Financial terms weren’t disclosed.
• New Mountain Capital made an investment of an undisclosed amount in Cytel Inc, a Cambridge, Mass.-based provider of analytical software and services for the life sciences sector.
• Dialog Semiconductor plc acquired Silego Technology Inc, a Santa Clara, Calif.-based provider of Configurable Mixed-signal ICs. Financial terms weren’t disclosed.
• Evoqua or EWT Holdings, a Pittsburgh, Penn.-based water treatment company, raised $500 million in an IPO of 27.8 million shares(70% insider) at $18 a piece, within its range of $17 to $19. The company posted revenue $1.2 billion in the 12 months ending September 2016, with loss of $86.1 million. AEA Investors(58.5% pre-offering), British Columbia Investment Management Corporation(11.2%), Temasek Holdings(7.7%), and Pictet Private Equity Investors(9.4%) back the company. Credit Suisse and J.P. Morgan are underwriters in the deal. The company plans to list as “AQUA” on the NYSE.
• Vencore Holding, a Chantilly, Vir.-based IT services provider for the U.S. government, withdrew its $250 million IPO after merging with DXC Technology and KeyPoint Government Solutions. In 2016, the company reported income of $1 million on revenue of $1.2 billion. Goldman Sachs and Wells Fargo are lead underwriters in the deal. The company is backed by Veritas Capital. The company plans to list under “VCNR” on the NYSE.
• Funko, an Everett, Wash.-based maker of pop culture products,raised $125 million in an IPO of 10.42 million shares at $12. That’s below its previously stated offering of 13.3 million shares between $14 to $16 a piece. In 2016, the company posted revenue of $426.7 million and income of $26.9 million. Acon Investments, John P. and Trishawn P. Kipp Children’s Trust, and Fundamental Capital Partners back the company. Goldman Sachs, J.P. Morgan, BofA Merrill Lynch, Piper Jaffray and Jefferies are joint bookrunners in the deal. The firm plans to list on the Nasdaq as “FNKO.”
• Allena, a Newton, Mass.-based company developing metabolic disorder treatments, said it raised $75 million in an IPO of 5.3 million shares at $14 a piece, at the low end of its $14 to $16 range. In 2016, the company posted loss of $24.5 million. The company is backed by Frazier Healthcare(18.5% pre-offering), Third Rock Ventures (16.8%), Bessemer Venture (14.6%), Fidelity (11.8%), HBM BioCapital (10.2%), PFM LP (8.9%) and Pharmstandard International (5.4%). Credit Suisse, Jefferies, and Cowen & Company were named joint bookrunners in the deal. The company plans to list of the Nasdaq as “ALNA.”
• Spero Therapeutics, a Cambridge, Mass.-based company seeking a treatment for drug-resistant bacterial infections, raised $77 million in an IPO of 5.5 million shares at $14, the low end of its $14 to $16 range. In 2016, the company posted revenue of $335,000 and loss of $29.9 million. The company is backed by GlaxoSmithKline(17% pre-offering), Atlas Venture (16.4%), and Alphabet(13.2%). BofA Merrill Lynch, Cowen and Company, Stifel, and Oppenheimer & Co. are joint bookrunners in the deal. The company plans to list on the Nasdaq as “SPRO.”
FIRMS + FUNDS
• Crestline Investors, a Fort Worth, Texas-based investment manager, raised $1.34 billion for its third opportunity fund and related managed accounts, Opportunity Fund III.
• Frazier Healthcare Partners, a Seattle-based private equity and venture capital firm, raised $419 million for Frazier Life Sciences IX, its second dedicated life sciences fund.
• Aisling Capital, a New York-based venture capital and private equity firm, raised $280 million for its new fund.
• Brian Boyle joined Raymond James as a managing director for its consumer investment banking practice. Previously, Boyle was at PwC Corporate Finance.
• Edison Partners will promote Lenard Marcus to general partner.
• Larry Wieseneck joined Cowen Inc. as co-president, and Dan Charney was named co-president of Cowen and Company.