Very sorry for re-sending yesterday's edition. Let's try this again...
• Tiger in the hen house: There were two major developments yesterday in the world of ride-hailing.
First, Uber is in the midst of raising $2.1 billion in Series G funding at a whopping $62.5 billion pre-money valuation. For context, that’s higher than the market cap of General Motors, and it was done at fairly standard terms (1x liquidation preference, no ratchets -- view stock certs here). Second, four Uber rivals from around the globe have signed a “strategic partnership” through which they’ll work together on both technology and services. The new partners are Lyft (U.S.), Didi Kuaidi (China), GrabTaxi (SouthEast Asia) and Ola (India).
In other words, it’s now Uber vs. the world. Which is why it’s so surprising that Uber’s new financing round is being co-led by Tiger Global, which previously invested in Didi Kuaidi, GrabTaxi, Ola and Lyft (that last one is indirect, as Lyft raised money from Didi Kuaidi). Keep your enemies so close that they’re on your cap table?
Sources familiar with the situation say that Tiger is committing more to Uber in this round than it invested in any of the other three companies, which helped make Uber more comfortable with its inclusion. For Tiger, it was less about hedging and more about a platform coverage (i.e., there can be multiple winners, particularly as some of the companies expand beyond consumer transportation). Moreover, the two sides worked out an information-sharing plan that would avoid either one from being put in an awkward position (which, presumably, means very little information will actually be shared).
The deal also reflects how much of Uber’s growth seems to be outside of the U.S., despite regulatory challenges and homegrown rivals. For example, five of its ten largest global markets are in China, where a company spokesperson claims it has between a 25% and 30% market share of all completed private car trips. In India, Uber claims around a 40% market share.
From a fundraising perspective, that international growth means:
- Uber feels more confident about its competitive position, so is willing to take on an investor like Tiger Global. This is a far cry from last year, when Uber CEO Travis Kalanick openly bragged to Vanity Fair about trying to disrupt Lyft’s fundraising efforts.
- Uber wants to maintain momentum — including adding new markets — but needs new outside capital to do so. But because it already has raised so much money from so many big investors, it can no longer be quite so choosy when it comes to new shareholders.
Uber has not yet closed the new financing round, nor does it have verbal commitments for the entire $2.1 billion. Expect that it will follow the same process we’ve seen in the past, where it holds a quick first close in order to set the terms — in this case with Tiger and T. Rowe Price — and then works to fill out the remaining book.
• Thanks are due to... Erin Griffith, for helping on the above item.
• Winter is here: When discussing unicorn companies, a lot of venture capitalists and reporters have used the phrase "winter is coming." It's an obvious homage to Game of Thrones, but perhaps we should now be considering it a bit more relevant to our own, non-fictional calendars.
Based on today's positive jobs report -- accentuated by upwards Sept. and Oct. revisions -- it seems certain the the Fed will raise interest rates during its December meeting. You know, it's first meeting of the new winter. And if rates climb, it will only serve to put more pressure on later-stage financing rounds, given that certain crossover investors may not be quite so desperate for alternative market yield. It's not quite like flipping a switch, but it matters.
• Speaking of rates: Two interesting tweets that caught my eye this morning. First was from CNBC's Brian Sullivan, who wrote: "No one on Wall Street under the age of 31 has run money or traded under a Fed rate hike." The other was from Reuters' Jamie McGeever, who pointed out that the last time the Fed raised rates was one month before Twitter was launched.
• Recommended reading: First Round Capital has published its State of Startups report, which is based on a survey of more than 500 VC-backed entrepreneurs. Among its findings is that founders believe that negotiating power is shifting from founders to entrepreneurs:
"We asked founders who they think has held the power in negotiating deals over the past few years. 63% said entrepreneurs have enjoyed the upper hand compared to 37% who said investors had the power. Then we asked what they think this dynamic will look like over the next few years. The balance shifted significantly, with only 46% saying entrepreneurs will have more power and 54% saying investors will take the lead."
First Round also suggested that there is a gender split when it comes to how founders view the negotiating power dynamic. Check it all out by going here.
• Think bigger: Leaving aside the structure, it's a bit curious that everyone keeps writing about how Mark Zuckerberg and wife Priscilla Chan will be giving away/donating/investing their "$45 billion" fortune over the course of their lifetimes. Does that mean everyone expects Facebook's stock price to remain static for the next 50-60 years?
• Have a great weekend. Go Pats!
THE BIG DEAL
• Avon Products (NYSE: AVP) reportedly is in talks to sell its North American business to Cerberus Capital Management. As part of the deal, Cerberus also would acquire a minority equity stake in Avon Products, and receive two board seats.
But activist investor Barington Capital, which holds a 3% stake in Avon, tells Fortune that it will help lead activist opposition --to a Cerberus investment at "fire sale" prices, raising the possibility of a proxy fight. Avon has a current market cap of around $1.7 billion. Read more.
VENTURE CAPITAL DEALS
• ZeroFOX, a Baltimore-based cybersecurity startup, has raised $27 million in Series B funding. Highland Capital Partners led the round, and was joined by return backers New Enterprise Associates, Genacast Ventures and Core Capital. Read more.
• Reverb, a Chicago-based online music equipment exchange, has raised $25 million in new VC funding led by Summit Partners. Read more.
• Clearside Biomedical Inc., an Alpharetta, Ga.-based developer of therapies to treat blinding diseases of the eye, has raised $20 million in Series C funding. New investors included Aju IB Investment, Cormorant Asset Management, Perceptive Advisors and Rock Springs Capital Management. www.clearsidebio.com
• Enlibrium, a San Diego-based developer of “drugs based on the anti-cancer activity of metformin,” has raised $15 million in Series A funding. Avalon Ventures and TPG Biotech co-led the round, and were joined by Correlation Ventures and Osage University Partners.
• CommercialTribe, a Denver-based provider of sales enablement solutions, has raised $6 million in new VC funding from Boulder Ventures, Grotech Ventures, and Access Venture Partners. www.commercialtribe.com
• Contessa Health Inc., a Nashville, Tenn.-based creator and manager of home hospitalization programs, has raised $3.5 million in Series A funding from BlueCross BlueShield Venture Partners, Sandbox Advantage Fund and Martin Ventures. www.contessahealth.com
• Staffly Inc., a San Francisco-based on-demand vetted staffing platform for retailers, has raised $1.25 million in new seed funding. ff Venture Capital led the round, and was joined by Three Fish Capital, WS Ventures and return backer LionBird. www.staffly.com
PRIVATE EQUITY DEALS
• Bargain Hunt Superstores, a La Vergne, Tenn.-based extreme value retail chain, has secured an undisclosed amount of growth equity funding from Thomas H. Lee Partners. www.bargainhunt.com
• D’Orazio Capital Partners has acquired the parent company of Red Head Brass, a Shreve, Ohio-based manufacturer of couplings and fittings for the domestic firefighting market, from Guard Hill Holdings. No financial terms were disclosed. www.redheadbrass.com
• Food Lover’s Market, a South Africa-based independent food retail group, has raised $54 million in equity funding from Actis. www.fruitandvegcity.co.za
• The Frontenac Company has sponsored a recapitalization of La Tavola Fine Linen Rental, a Napa, Calif.-based provider of ultra-specialty linens. No financial terms were disclosed. The company also named Jeff Black, former CEO of Classic Party Rentals, as chief executive. www.latavolalinen.com
• Genstar Capital and Aquiline Capital Partners have completed their previously-announced acquisition of Ascensus Inc., a Dresher, Penn.-based provider of retirement and college savings plans, from J.C. Flowers & Co. No financial terms were disclosed. www.ascensus.com
• Genstar Capital has acquired PDR Network LLC, a Montvale, N.J.-based provider of information for health professionals (including the Physician’s Desk Reference), from Lee Equity Partners. No financial terms were disclosed. www.PDRnetwork.com
• Keystone Capital has acquired Cherry Hill Holdings Inc., a Marlton, N.J.-based provider of special event digital photography services to shopping mall operators, from Eureka Growth Capital. No financial terms were disclosed. www.cherryhillphoto.com
• Tyco (NTSE: TYC) has agreed to sell its fire detection and protection business in Australia to Evergreen Capital. No financial terms were disclosed. www.tyco.com
• Zycko Ltd., a UK-based distributor of IT solutions, has secured an undisclosed amount of funding from Rigby Private Equity. www.zycko.com
• Univision, a New York-based Spanish language broadcaster, has decided not to proceed with its IPO in 2015, according to the WSJ. The company had filed its S-1 back in July, and now is hoping to price sometime in early 2016. Univision was acquired in early 2007 by a private equity consortium that included Madison Dearborn Partners, Providence Equity Partners, TPG Capital and Thomas H. Lee Partners. Also participating were the Canada Pension Plan Investment Board and AlpInvest. Read more.
• JLL (NYSE: JLL) has agreed to acquire Corrigo Inc., a Tualatin, Ore.-based provider of cloud-based facility management solutions. No financial terms were disclosed. Corrigo had raised over $20 million in VC funding from firms like Sierra Ventures, Amicus Capital, Asset Management Ventures, Sycamore Ventures and Staenberg Venture Partners. www.corrigo.com
• Motorola Solutions (NYSE: MSI) has agreed to acquire Airwave, a UK-based operator of a public safety network, for approximately $1.2 billion from Macquarie Group. Read more.
• American Homes 4 Rent (NYSE: AMH) has agreed to acquired American Residential Properties (NYSE: ARPI) for $1.5 billion, or $19.01 per share in stock (8.7% premium over Wednesday’s closing price. The combined home rental company would own than 47,000 properties in the U.S. Read more.
• BTG Pactual is seeking a buyer for Swiss private banking group BSI, just three months after acquiring it for $1.28 billion from Italy’s Assicurazioni Generali SpA. Read more.
Nokia has completed its previously-announced €2.55 billion sale of digital mapping business Here to a consortium that includes German automakers Audi, BMW Group and Daimler. The original August announcement had a €2.8 billion price-tag, "subject to certain purchase price adjustments." Read more.
FIRMS & FUNDS
• Saw Mill Capital, a Briarcliff Manor, N.Y.-based middle-market private equity firm, is raising upwards of $300 million for its next fund, according to a regulatory filing. www.sawmillcapital.com
MOVING IN, UP, ON & OUT
• Greg Ehret has joined PineBridge Investments as CEO, effective January 25. He previously was president of State Street Global Advisors. PineBridge interim CEO Stephen Fitzgerald will continue to serve as the firm’s deputy chairman. www.pinebridge.com
• Norwest Venture Partners has promoted both Casper de Clercq and Ryan Harris to general partner. It also promoted Ran Ding, Jared Hyatt, Conrad Shang and Ed Yip to vice president. www.nvp.com
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