Random Ramblings
Workplace collaboration platform Slack yesterday made official what has been rumored for weeks: It has raised $160 million in new venture capital funding at a post-money valuation of $2.8 billion. But one big question remains: Why?
Slack raised $120 million just last October at a $1.12 billion valuation and, at the time, didn’t even need the money. Instead, it simply wanted to join the (then less) exclusive unicorn club. So why return to the well now?
Company co-founder and CEO Stewart Butterfield explains: “We’re kind of in the best environment ever to raise money and while things could always get better and we’ll wish we had waited another six months, having a couple hundred million bucks in the bank is a good hedge about what might happen in the future.”
(If this argument sounds familiar, it’s probably because I posted this last month)
Butterfield, who says Slack still hasn't tapped any of last October’s $120 million, adds that he’s not terribly concerned that a macro pullback might lead to Slack later raising new capital at a lower valuation. “There’s always some downside risk to any business deal, but we’re very capital efficient and never really need to raise money again,” he says. “This valuation helps us recruit new employees and gives a high value to our stock when contemplating acquisitions… It would have been imprudent of me not to take it when it was offered.”
Does that mean Butterfield would raise another $160 million at a larger valuation in six months? “If we could double our valuation again, I’d certainly think about it,” he says.
• Coming attractions. This morning we announced the first wave of participants for Fortune BrainstormTech, our invite-only tech confab that takes place each summer in Aspen, Colorado.
The aforementioned Mr. Butterfield is coming. So is Jeff Immelt. And Megan Smith. And Henry Kravis. And Reid Hoffman. And Egon Durban. And Anthony Noto. And (in no particular order) the CEOs of Stripe, Instacart, Flextronics, eBay, CyPhy Works, Medium, Best Buy, Pinterest, WorkDay, BirchBox, Quirky, HomeAway, Stitch Fix, Jet and Big Machine Label Group. Plus Chicago Mayor Rahm Emanuel and many, many more. Read all about it by going here.
• Correction: Yesterday I wrote that Hillary Clinton hinted at wanting to treat carried interest like capital gains. Total screw-up. Meant to say that she wants to treat it like ordinary income (which she also said during her last campaign). But it's still not going to happen, for three reasons.
• Thanks for coming: Last night, nearly 2,000 people showed up for the TUGG event in Boston (including many Term Sheet readers). I'm pleased to report that the event resulted in two great nonprofits receiving $50,000 checks: (1) Resilient Coders, a free, volunteer-based program focused on making web technology more available to kids who might not otherwise be exposed to it. (2) Bed for Every Child, a nonprofit that buys and distributes beds to low-income children who don't have an actual bed to sleep in at night.
Four other nonprofits each received $10,000 checks. Again, a big thanks to everyone involved. And if you're in another city and have interest in creating something similar (the event -- not necessarily the broader TUGG program), let me know.
• Have a great weekend... Go Celts!
THE BIG DEAL
• 58.com (NYSE: WUBA), a Chinese classifieds site, has agreed to acquire a 43.2% stake in rival Ganji.com via a cash and stock deal that values Ganji.com above $3.6 billion. Sellers reportedly would include such existing Ganji.com backers as Tiger Global Management, Sequoia Capital, The Carlyle Group, BlueRun Ventures and CITIC Capital. Ganji.com has raised over $220 million in private funding. Read more.
VENTURE CAPITAL DEALS
• Slack, a San Francisco-based enterprise collaboration company, confirmed that it has raised $160 million in new VC funding at a $2.8 billion post-money valuation. New investors on this funding round include Li Ka-shing’s Horizons Ventures, DST Global, Index Ventures, Spark Capital and Institutional Venture Partners. Return backers were Andreessen Horowitz, The Social+Capital Partnership, Google Ventures and Kleiner Perkins Caufield & Byers. Read more.
• Peloton, an at-home fitness solution for live and on-demand indoor cycling classes, has raised $30 million in Series C funding co-led by True Ventures and Tiger Global Management. www.pelotoncycle.com
• Navdy, a San Francisco-based developer of a head-up display for auto dashboards, has raised $20.3 million in new VC funding. Backers include Upfront Ventures, Formation8, Qualcomm Ventures, Promus Ventures, Eniac Ventures and Wareness.io. Read more.
• EyeEm, an online community and marketplace for photos, as raised $18 million in Series C funding. Valar Ventures led the round, and was joined by return backers Earlybird Ventures, Passion Capital, Wellington Partners, Atlantic Labs and Open Ocean Capital. Read more.
• UniKey, a Winter Park, Fla.-based smart lock maker, has raised $10 million in Series A funding. Backers include Asset Management Ventures, AXCIT, Broadway Angels, CBRE, ff Venture Capital, Samsung, Haas Portman and Oriza Ventures. www.unikey.com
PRIVATE EQUITY DEALS
• Apollo Global Management may assume control of UK steel trading firm Stemcor via a $2 billion debt restructuring, according to Reuters. Read more.
• Ares Management said that a fund managed by its commercial finance platform has agreed to acquire the asset-based lending portfolio of First Capital Holdings, a portfolio company of H.I.G. Capital. No financial terms were disclosed. www.aresmgmt.com
• CID Capital has sponsored a recapitalization of Fit & Fresh Inc., a Providence, R.I.-based developer of fresh food storage containers. No financial terms were disclosed. www.fit-fresh.com
• Cinven has offered to acquire the Slovenian government’s 72.75% stake in telecom company Telekom Slovenije for an undisclosed amount. Read more.
• InTech Aerospace, a Houston-based provider of aerospace maintenance, repair and overhaul services, has raised an undisclosed amount of private equity funding from Azalea Capital. www.intechaero.com
• Post Oak Energy Capital has committed to invest up to $150 million in PetroEdge Energy IV LLC, a new Houston, Texas-based oil and gas company. www.petroedge.com
• Roark Capital Group is in talks to acquire Pet Supermarket, a Sunrise, Fla.-based operator of more than 150 per supplies stores, according to an FTC filing. Read more.
• WennSoft Inc., a New Berlin, Wis.–based provider of field services software for the construction market, has raised an undisclosed amount of private equity funding from LLR Partners. www.wennsoft.com
IPOs
• Gypsum Management & Supply Inc., a Tucker, Ga.-based building materials distributor owned by AEA Investors, has picked Credit Suisse and Barclays to manage an IPO, according to Dow Jones. Read more.
• ViewRay Inc., a Cleveland-based developer of radiation therapy technology for the treatment of cancer, has withdrawn registration for an IPO that was expected to offer 4 million shares at between $12 and $14 per share. The IPO had been postponed last week. Cowen & Co. and Stifel were serving as lead underwriters. Shareholders include Aisling Capital (21.33% pre-IPO stake), Fidelity Biosciences (21.33%), OrbiMed Advisors (21.33%), Kearny Venture Partners (12.19%) and Siemens Venture Capital. www.viewray.com
• Yirendai.com, a Chinese P2P lending platform, is prepping a U.S. IPO that could raise upwards of $300 million, according to Reuters. The company is owned by CreditEase, whose shareholders include IDG Capital Partners, Morgan Stanley Private Equity Asia and Kleiner Perkins Caufield & Byers. Read more.
EXITS
• Hony Capital has sold a 23.2% stake in Hong Kong-based drugmaker CSPC Pharmaceutical Group Ltd. (HK: 1093) for a total of $1.3 billion. Read more.
OTHER DEALS
• EFactor Group Corp. (OTC BB: EFCT) has acquired RocketHub Inc., a New York-based international funding platform, for around $15 million. www.rockethub.com
• Halliburton (NYSE: HAL) has hired Bank of America and Deutsche Bank to find buyers for two businesses that could be worth upwards of $5 billion combined, according to Reuters. BofA will handle the sale of its Sperry Drilling unit, while Deutsche is charged with Halliburton’s drill bits business. Read more.
FIRMS & FUNDS
• Altimeter Capital is raising upwards of $225 million for its second private equity fund, according to a regulatory filing. www.altimetercapital.com
• Atlas Venture has raised $280 million for its first fund since its IT team split off earlier this year to raise its own fund. Boston-based Atlas is now exclusively dedicated to life sciences investing. Read more.
MOVING IN, UP, ON & OUT
• Andrew Beebe has joined Obvious Ventures as a managing director. He previously was VP of distributed generation with NextEra Energy Resources. www.obvious.com
• Sam Coates has joined WilmerHale as a partner in the law firm’s Palo Alto office, as part of its corporate, emerging company and life sciences practice groups. He previously was a partner with Cooley LLP. www.wilmerhale.com
• Noah Keys has joined AlpInvest Partners as a New York-based principal focused on secondaries and co-investments in the energy, infrastructure and natural resources sectors. He previously was an executive director in UBS Investment Bank’s global energy group. www.alpinvest.com
• Richard Lever has joined Goodwin Procter as a London-based partner in the law firm’s private equity group. He previously co-led the corporate practice at King & Wood Mallesons. www.goodwinprocter.com
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