Good morning, Term Sheet readers.
PEOPLE MOVES: Venture firm Andreessen Horowitz has promoted Connie Chan to general partner with a focus on consumer investments. Chan, a partner who joined as an analyst in 2011, is the first general partner to get promoted from within the firm. Her promotion means that Andreessen Horowitz is breaking its long-standing requirement that general partners need to have operating experience prior to joining. (Chan is also speaking on a “China Innovation” panel at Brainstorm Tech today). Read the full story here.
UBER’S TRIALS & TRIBULATIONS: Fortune’s Brainstorm Tech conference kicked off yesterday with a conversation between Fortune executive editor Adam Lashinsky and Uber CEO Dara Khosrowshahi.
Just before the interview, it was revealed that Uber is facing a federal investigation over alleged gender discrimination. “Sometimes it takes a punch in the face to see things clearly,” Khosrowshahi said. “This was one of the moments for me. This was a rough week, but it was incredibly motivating.”
Below is an excerpt of the comments he made at Fortune’s conference. (Read the full story here.)
On fixing Uber’s culture:
Shortly after taking charge at Uber, Khosrowshahi asked employees to submit ideas for a new set of corporate values. The crowdsourcing effort resulted in the company’s eight “cultural norms,” including one that states: “We do the right thing. Period.”
But changing culture is easier said than done. Uber is being investigated by the U.S. Equal Employment Opportunity Commission following a complaint about gender discrimination. That followed last week’s exit of Uber’s HR chief, Liane Hornsey, who resigned after claims that she ignored allegations of racial discrimination. Adding to the fire, on Friday, it was reported that Uber’s chief operating officer, Barney Harford, had made allegedly insensitive comments about women and minorities.
Khosrowshahi responded to the steady drip of bad news on Monday by saying: “We take very seriously anything having to do with anyone, but especially with our senior officers. We’re not going to run a process through the press, we’re going to run a process the right way.”
When asked if Harford’s job is safe, Khosrowshahi was non-committal, saying “it’s too soon” to tell.
On the planned IPO:
Khosrowshahi has been vocal about plans to take Uber public in 2019, saying that the company is in a “good position” in terms of its profitability, excluding certain expenses, and margins. However, Uber hasn’t had a chief financial officer since 2015—a glaring hole for a company planning an IPO — and a loss of nearly $4.5 billion last year.
At Brainstorm Tech on Monday, Khosrowshahi said he doesn’t think Uber needs to be profitable before going public, but that there should be a very clear path to profitability.
“I don’t want to be dependent private, public, or any markets to fund the business expansion in front of us, so I look at cash before profits,” he said, referring to being cash-flow positive, a popular measure that indicates a company’s liquid assets are increasing, allowing it to settle debts and pay expenses. “But over a period of time, it is absolutely important for the business to be profitable.”
On e-bikes and scooters:
Uber recently acquired dockless e-bike service Jump Bikes (formerly known as Social Bicycles) for a reported $200 million. The purchase lets Uber expand into an urban mobility company, a catch-all phrase for many kinds of transportation.
Khosrowshahi re-emphasized that commitment on Monday, saying that travel within cities will change radically in the next five to 10 years. “It’s a huge opportunity,” he said about e-bikes and scooters.
THE LATEST FROM FORTUNE...
• China’s E-Commerce Giants Aren’t Worried About Trade War (by Erika Fry)
• Walmart Bets On Ever Faster Delivery to Compete With Amazon (by Phil Wahba)
• Yahoo Co-Founder Jerry Yang Says He’s the Luckiest Person Alive (by Aaron Pressman)
• Amazon’s Echo Device Chief on the Risk of Alexa’s Many Rewards (by Ellen McGirt)
• Dialpad, a San Francisco-based pure-cloud business communications provider, raised $50 million in Series D funding. ICONIQ Capital led the round, and was joined by investors including Andreessen Horowitz, Amasia, Scale Venture Partners, Section 32, and Work-Bench.
• Verodin, a McLean, Va.-based software company validating the effectiveness of cybersecurity controls, raised $21 million in Series B funding. TenEleven Ventures and Bessemer Venture Partners co-led the round, and were joined by investors including Capital One Growth Ventures and Citi Ventures.
• Naadam, a New York-based luxury cashmere brand, raised $16 million in Series A funding. Vanterra Capital led the round, and was joined by investors including Torch Capital, U-Start Club, Trail Post Ventures, and Plug & Play Ventures.
• Undo, a U.K.-based developer of new software debugging technologies, raised $14 million in Series B funding. Cambridge Innovation Capital plc led the round.
• TVision Insights, a Cambridge, Mass.-based developer of a facial recognition technology to analyze television viewer behavior, raised $11.5 million in funding. Accomplice and Jump Capital led the round.
• Integris Software, a Seattle-based provider of data privacy automation, raised $10 million in Series A funding. Aspect Ventures led the round, and was joined by investors including Workday Ventures, Madrona Venture Group, and Amplify Partners.
• Allego, a Needham, Mass.-based sales learning and coaching platform, raised $7.5 million in funding. General Catalyst led the round.
• Mention Me, a London-based referral marketing platform, raised $7 million. Eight Roads Ventures led the round.
• DPOrganizer, a Sweden-based data protection company, raised €3 million ($3.5 million) in Series A funding. Paladin Capital Group led the round, and was joined by investors including Industrifonden, Creades, Inbox Capital, and Soläng Invest.
• AdQuick, a Santa Monica, Calif.-based operator of a platform that helps users to buy and sell outdoor advertising services, raised $2.1 million in Series A funding. Initialized Capital led the round.
• TowerIQ, a Boston-based market neutral communication platform for the insurance industry, raised $2 million in seed funding. Hyperplane Venture Capital led the round, and was joined by investors including Vestigo Ventures and Clocktower Ventures.
• Kapwing, a video editing website, raised $1.7 million in seed funding. Kleiner Perkins led the round, and was joined by investors including Shasta Ventures, Sinai Ventures, Village Global, Shrug Capital and ZhenFund.
HEALTH AND LIFE SCIENCES DEALS
• Pliant Therapeutics Inc, a South San Francisco-based biotech firm, raised $62 million in Series B funding. Cowen Healthcare Investments led the round, and was joined by investors including Eventide Asset Management, Schroder Adveq, Menlo Ventures, SCubed Capital and Agent Capital.
• Univercells SA, a Belgium-based biotech company, raised $18.8 million in Series B funding. Global Health Investment Fund led the round.
PRIVATE EQUITY DEALS
• KKR agreed to invest $400 million in AppLovin, a Palo Alto, Calif.-based provider of an online platform for advertising and to build revenue base.
• Royal Power Solutions, which is backed by Industrial Growth Partners, acquired Horizon Die Company, an East Dundee, Ill.-based metal stamping service. Financial terms weren’t disclosed.
• Eurazeo invested $60 million in Pat McGrath Labs, a beauty & makeup brand.
• Northlane Capital Partners made an investment in Firma Clinical Research, a Chicago and Hunt Valley, Md.-based contract research organization providing services to the biopharmaceutical industry. Financial terms weren’t disclosed.
• MavenHill Capital recapitalized Universal Screen Arts Inc, a Hudson, Ohio-based direct marketing, catalog and ecommerce company. Financial terms weren’t disclosed.
• Salveo Capital acquired a minority equity interest in PathogenDx, a Scottsdale, Ariz.-based provider of DNA-based pathogen testing kits for the cannabis, botanical, food and agriculture industries. Financial terms weren’t disclosed.
• LendingTree, Inc. (NASDAQ: TREE) agreed to acquire Student Loan Hero, Inc., an Austin, Texas-based personal finance website helping student loan borrowers manage student debt, for $60 million in cash.
• Walnut Street Group, the Shanghai-based e-commerce firm behind Pinduoduo, plans to raise $1.5 billion in an IPO of 85.6 million shares priced between $16 to $19. It posted revenue of $278.1 million in 2017. Tencent (18.5% pre-offering) and Sequoia (7.4%) back the firm. Credit Suisse, Goldman Sachs, and CICC are underwriters. It plans to list on the Nasdaq as “PDD.” Read more.
• Focus Financial Partners, a New York-based wealth management firm, filed for an $100 million IPO. The firm posted revenue of $662.9 million in 2017. Goldman Sachs, BofA Merrill Lynch, and KKR are underwriters in the deal. The firm plans to list on the Nasdaq as “FOCS.” Read more.
• Berry Petroleum Corp., a Bakersfield, Calif.-based onshore oil firm, says it plans to raise $300 million in an offering of 18.8 million shares priced between $15 to $17. The firm posted revenue of $319.7 million in 2017. Goldman Sachs, Wells Fargo, and BMO Capital are underwriters. The firm plans to list on the NASDAQ as “BRY.” Read more.
• ECI Telecom, a Tel Aviv equipment maker, is seeking to raise 130 million pounds ($172 million) in an IPO on the London Stock Exchange the Calcalist financial news reports. Read more.
• Tenable, a Columbia, M.D.-based cybersecurity firm, said it plans to raise $166 million in an IPO of 9.2 million shares priced between $17 to $19. It posted revenue of $187.7 million in 2017. Insight Venture Partners (35.2% pre-offering) and Accel (34.4%) back the firm. Morgan Stanley, J.P. Morgan, Allen & Company, and Deutsche Bank are underwriters.The firm plans to list on the NASDAQ as “TENB.” Read more.
• Urovant Sciences, a London-based urological diseases firm, filed for an $150 million IPO. The firm has yet to post a revenue. Viking Global backs the firm. J.P. Morgan, Jefferies, and Cowen bookrunners in the deal. It plans to list on the Nasdaq as “UROV.” Read more.
• Mesa Air Group, a Phoenix, Ariz.-based regional air carrier for a $150 million IPO. It booked $643.7 million in the year ending September. American Airlines, Corre Opportunities, and Citigroup back the company. Raymond James, BofA Merrill Lynch, Cowen, Stifel, and Imperial Capital are the joint bookrunners. It plans to list as “MESA.” Read more.
• Cango, an Shanghai-based online car marketplace, plans to raise $138 million in an offering of 12.5 million ADSs priced between $10 to $12. The firm posted $167.8 million in revenue in 2017. Warburg Pincus (18.2% pre-offering), Didi Chuxing (14.8%), and Tencent back the firm (10.7%). Morgan Stanley, BofA Merrill Lynch, and Goldman Sachs are bookrunners. It plans to list on the NYSE as “CANG.” Read more.
• Opera Limited, an Oslo, Norway-based web browser maker, plans to raise $106 million in an offering of 9.6 million shares priced between $10 to $12. The firm posted revenue of $128.9 million in 2017. Kunlun Tech (48% pre-offering) backs the firm. CICC and Citigroup are underwriters. The firm plans to list on the NASDAQ as “OPRA.” Read more.
• Endava, a London-based outsourced IT firm, plans to raise $101 million in an offering of 5.6 million ADSs priced between $17 to $19. It posted revenue of $223.6 million in the 12 months ending June 2017. Morgan Stanley, Citi, Credit Suisse, and Deutsche Bank are joint bookrunners. It plans to list on the NYSE as “DAVA.” Read more.
• Remora Royalties, an oil and natural gas royalties firm in Austin, Texas, filed for a $100 million IPO. The firm posted revenue of $36.1 million in 2017. RBC Capital Markets, Wells Fargo Securities, and UBS Investment Bank are joint bookrunners. It plans to list on the Nasdaq under the symbol “RRI.” Read more.
• Pintec Technology Holdings, a Beijing-based fintech, filed for a $70 million IPO. It posted revenue of $90.7 million in 2017. Mandra iBase (10% pre-offering), Ventech (7.5%), and Xiaomi (7.2%) back the firm. Goldman Sachs, Deutsche Bank and Citi, are joint bookrunners in the deal. It plans to list on the Nasdaq as “PT.” Read more.
• Aquestive Therapeutics, a Warren, N.J.-based central nervous system therapies maker, plans to raise $60 million in an offering of 4 million shares priced between $14 to $16. The firm posted revenue of $66.9 million in 2017. Bratton Capital Management and Genpar Monosol back the firm. BMO Capital Markets and RBC Capital Markets are underwriters. It plans to list on the Nasdaq as “AQST.” Read more.
• Eurazeo PME agreed to sell its stake in the Odealim Group, a France-based insurance brokerage firm for real estate professionals, to TA Associates. Financial terms weren’t disclosed.
• Arsenal Capital Partners sold Inhance, a Houston-based provider of fluorine-based material technologies, to Aurora Capital Partners. Financial terms weren’t disclosed.
• Equistone Partners Europe agreed to sell a majority stake in Caseking, a Germany-based supplier of PC gaming, eSports and tech products, to Gilde Buy Out Partners.
FIRMS + FUNDS
• Stonepeak Partners, a New York-based investment firm, raised $7.2 billion for Stonepeak Infrastructure Fund III.
• The Beekman Group LLC, a New York City-based private equity firm, raised $425 million for its fourth fund, Beekman Investment Partners IV.
• Crosslink Capital, Inc, a San Francisco-based private equity firm, raised $275 million for its eighth venture capital fund, Crosslink Ventures VIII.
• High Alpha, an Indianapolis-based venture studio, raised more than $100 million in funding. High Alpha Studio II, an enterprise cloud startup studio, raised $16.65 million from Emergence Capital and Foundry Group. Also, High Alpha Capital, a seed and Series A venture fund, has closed its High Alpha Capital II at $85 million.