The Hot IPO You Might Have Overlooked: Term Sheet

CONSUMERIZE THE ENTERPRISE

While we all gave our undivided attention to flashy IPOs like Uber and Lyft, many overlooked the public market debut of cloud-based cybersecurity company CrowdStrike. You’ve probably heard of it without realizing — CrowdStrike was the company that discovered the Democratic National Committee breach by Russia amid the U.S. presidential election.

My colleague Robert Hackett and I met with CrowdStrike CEO George Kurtz the day after his company’s IPO. It had been a big day for Kurtz and his team after the stock surged and made it the second most valuable U.S.-based cybersecurity company on the public markets today (only $19.5 billion Palo Alto Networks tops it.)

Hackett notes that the most interesting thing about Kurtz is his doggedness. “Here was a man dead-set: Cloud at all costs. Platform or nothing. IPO or bust. Kurtz has been describing his business as ‘the Salesforce of cybersecurity’ since I first met him in 2015, and that’s precisely how he described it when I caught up with him after his company’s ravenously received initial public offering in the middle of the week.”

And there’s a reason Kurtz uses the Salesforce comparison. When we met with him, he said something that resonated: “The companies that bring a consumerized experience to the enterprise will win.” Read more.

‘IRR GOALS:’ This chart was making the rounds on Twitter this weekend showing aggregated fund performance sorted by fund manager. Union Square Ventures showed nearly 60% internal rate of return (IRR) across eight funds.

The tweets were endless. Alexis Ohanian with: “Respect. @fredwilson and team with IRR goals.” Paul Graham with “Union Square Ventures proves that in the venture business, nice guys don't finish last. In fact rather the opposite.” And Paul Kedrosky with: “Incredible venture performance numbers as of 12/31/18 from Union Square, not that it should come as a surprise.”

Wilson commented to say he has never seen his firm’s fund performance aggregated into a single number. “We don't look at it that way at USV,” he said. And added, “To be clear, we look at each fund separately. Not as an aggregated entity. I can see why LPs would look at performance aggregated by manager, but we don't.”

Regardless, it's interesting to see fund performance in this format. Looks like Summit Partners has also fared well.

GOLDMAN SACHS STRATEGY SHAKE-UP: Goldman Sachs is upping its private equity ante by building a mini-Blackstone Group internally, according to The WSJ. The firm is reportedly pulling together four separate units that invest in private companies, creating new unit and planning a fundraising blitz. Why? Under the leadership of CEO David Solomon, Goldman is trying to grow the kind of steady, income-generating business that investors like. The unit is likely to have approximately $140 billion in assets, according to the WSJ. Read more.

THIS JUST IN: Sotheby’s auction house is being taken private for $57 per share in a cash deal valued at $3.7 billion. The buyer is BidFair USA, an entity wholly owned by media and telecom entrepreneur as well as art collector, Patrick Drahi. Sotheby's will return to private ownership after 31 years as a public company traded on the New York Stock Exchange.

VENTURE DEALS

• Collective Health, a San Francisco-based employer health benefits company, raised $205 million in Series E funding. SoftBank led the round, and was joined by investors including DFJ Growth, PSP Investments, Founders Fund, GV, Maverick Ventures, NEA, and Sun Life.

• PayFit, a France-basedHR solution, will raise $79 million (€70 million) in funding, according to TechCrunch. Investors include Eurazeo and Bpifrance. Read more.

• Edge Case Research, a Pittsburgh, Penn.-based AI safety startup, raised $7 million in funding. Chris Urmson and ANSYS led the round, and were joined by investors including Lockheed Martin Ventures, Liberty Mutual Strategic Ventures, Trucks VC and Blue Tree Allied Angels.

• Drive Motors, a San Francisco-based provider of digital commerce for auto retailers and brands, raised $5 million in funding. Investors include Peter Thiel, IDOM Inc and Ally Ventures. Also, Drive Motors has changed its name to Modal.

• Novi Money, a San Francisco-based company focused on improving financial literacy, raised $3 million in seed funding. Investors include Runa Capital, Lightspeed, Doberman Forward, Freedom Financial Network, M ventures, SGH Capital, Republic.co and Vectr.

• NeedsList, a Philadelphia-based online platform that matches products and services to communities in need, raised $1 million in funding. Investors include Amplio Ventures and Marigold Capital join the Omidyar Network, Next Wave Impact, Silicon Valley Social Ventures and the Kuo Sharper Fund.

HEALTH AND LIFE SCIENCES DEALS

• Saga Diagnostics AB, a Sweden-based precision oncology genomics testing company, raised $4.2 million in funding. Hadean Ventures led the round.

PRIVATE EQUITY DEALS

• Parker Building Supplies, a portfolio company of Cairngorm Capital Partners, acquired Sussex Turnery and Moulding Co Ltd, a U.K.-based builders’ merchant and wholesale timber processing and distribution business. Financial terms weren't disclosed.

• Unifrax, backed by Clearlake Capital Group, acquired Stellar Materials LLC, a maker of specialty chemistries and materials. Financial terms weren't disclosed.

• Morgan Stanley Capital Partners acquired Ovation Fertility, a Los Angeles-based provider of in-vitro fertilization laboratory services, from WindRose Health Investors. Financial terms weren't disclosed.

• Nordic Capital agreed to acquire a majority stake of ArisGlobal, a Coral Gables, Fla.-based life sciences software company, in a deal that values the company at $700 million including debt, according to The Wall Street Journal. Read more.

OTHER DEALS

• Pfizer Inc. (NYSE: PFE) agreed to acquire Array BioPharma Inc. (NASDAQ: ARRY) for approximately $11.4 billion.

IPOs

• BridgeBio Pharma, a company that identifies and advances transformative medicines to treat patients who suffer from Mendelian diseases, plans to raise $225 million in an IPO of 15 million shares priced between $14 to $16. It has yet to post a revenue and posted losses of $144 million in 2018. KKR and Viking back the firm. J.P. Morgan, Goldman Sachs, Jefferies, SVB Leerink, KKR, Piper Jaffray, Mizuho Securities, BMO Capital Markets, and Raymond James are underwriters. It plans to list on the Nasdaq as “BBIO.” Read more.

• Global Fashion Group, an emerging markets online fashion retailer, plans to raise as much as 395 million euros ($444 million) in a Frankfurt IPO, per Reuters. Rocket Internet and Kinnevik back the firm. Read more.

• The RealReal, a U.S.-based luxury reseller, plans to raise $270 million in an IPO of 15 million shares priced between $17 to $19. The firm posted revenue of $207.4 million and loss of $75.8 million. The firm is is backed by Perella Weinberg Partners (11% pre-offering), Canaan Partners (13%) and Great Hill Partners (14.7%). It plans to list on the Nasdaq as “REAL.” Read more.

• Adaptive Biotechnologies, a Seattle-based maker of an immunosequencing platform for diagnosing diseases, plans to raise $200 million in an IPO of 12.5 million shares priced between $15 to $17. It posted revenue of $55.7 million and loss of $46.4 million in 2018. Viking Global (36% pre-offering) and Matrix Capital (16.4%) back the firm. Goldman Sachs, J.P. Morgan, BofA Merrill Lynch, Cowen, Guggenheim Securities, William Blair, and BTIG are underwriters. It plans to list on the Nasdaq as “ADPT.” Read more.

• Uniphar, an Irish wholesale pharmaceutical firm, plans to raise 150 million euros ($167 million) in an IPO in London and Dublin, Reuters reports. Read more.

EXITS

• Ares Management Corp and OMERS Private Equity agreed to sell National Veterinary Associates, an Agoura Hills, Calif.-based veterinary and pet care services organization, to JAB Investors. Financial terms weren't disclosed.

• OpenGate Capital sold Omniplast, a provider of piping systems, to a group of investors including Reedcapital, Luigi M. Chiaraviglio and Swiss Merchant Corporation. Financial terms weren't disclosed.