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Term Sheet — Tuesday, March 8

Tuesday Talk-Back

The sun is shining, the IPO market is stalled and I’m at 30,000 feet on my way to San Francisco. In other words, it’s time for some Tuesday Talk-Back:

• First up are a couple of emails related to yesterday’s note on DoorDash. In short, you all thought my partial defense of company CEO Tony Xu’s “down round” comments were absurd.

Allesandro: “The DoorDash question discussion is quite silly. If I’m an existing investor in the company, the value of my existing shares decreases and hence this is a down round. It’s like claiming that my fund’s NAV increased due to a capital call. What matters is the TVPI, not the absolute value.”

Justin: “Either way, the lower price is still a down round based on the pre-money (should be the basis of down rounds). There is a line between amount raised and price-per-share to affect the post-money and provide an up/flat/down round based on post-money. You also have to take into consideration the additional shares that are put into the stack at the lower pps… If the new pps for this current C round was at a ~20% discount (rather than 15.68%), then you could be looking at a “flat” round based on the post-money. In the longer run, they can figure it out when they run a waterfall at various exit prices (which I am sure they have done), then they can decide what to call the round.”

Stuart on the Atherotech situation: “Regions’ behavior in this case is basically a function of increased regulation through the years. Non-regulated lenders such as Madison Capital have the flexibility to double-down on a bad loan for the sake of providing necessary liquidity which could ultimately save the company. Regulated banks such as Regions can’t really do this. Regulators then hammer them for throwing good (depositor) money after bad. Since the late 80’s, it’s been pretty standard for commercial banks to immediately liquidate bad assets under any circumstances, regardless of whether they believe a Company can be saved, because regulators still tend to take a black-and-white view of everything, thus prohibiting such a subjective decision by the bank in a work-out. Similarly, banks won’t convert their debt to equity anymore, because equity is too risky. Regions could be found at fault for seeking liquidation when it wasn’t feasible (key asset licensed from University of Alabama). However, in today’s banking environment they didn’t really have another choice.”

Stanley: “Regions might have been the hit man, but they were hired by the private equity firm that did a dividend recap.”

• Herminio: “Do you know what valuation method Fidelity uses for their [private company] investments?” Nope. They don’t say.

• Tony: “TimeHoo…Priceless.  Keep up the great work Dan. Humor and solid analysis is why I love the TermSheet.”

Marco: “TimeHoo? Could you be any more juvenile? Not the sort of thing I’d expect from the Fortune brand.”

• 60k and counting… Every time I add another thousand Twitter followers, I ask you to join the others so we can chat/debate/joke throughout the day. Follow me @danprimack.


• Toshiba Corp. (Tokyo: 6502) is expected to pick a preferred bidder for its healthcare unit on Wednesday, according to Reuters. Remaining suitors include Canon Inc., Fujifilm and a joint bid from Permira and Konica Minolta. Read more.


• Tizona Therapeutics Inc., a South San Francisco-based immunotherapy startup focused on cancer and autoimmune diseases, has raised $43 million in Series B funding. Abingworth and Canaan Partners co-led the round, and were joined by Lightstone Ventures and return backers MPM Capital, Amgen Ventures, Astellas Venture Management and InterWest Partners.

• AlphaSense, a San Francisco-based search engine for financial professionals, has raised $33 million in growth equity financing from Tribeca Venture Partners, Triangle Peak Partners and Quantum Strategic Partners.

• Capella Bioscience Ltd., a UK-based developer of monoclonal antibody medicines, has raised £11 million in Series A funding. Backers include Advent Life Sciences, Medicxi Ventures, and Osage University Partners.

• United Wind, a Brooklyn-based provider of distributed wind energy solutions, has raised $8 million in Series B funding co-led by Statoil Energy Ventures and Forum Equity Partners.

• Tiqets, an Amsterdam-based mobile ticketing platform for tourists, has raised $4 million in Series A funding led by Capital Mills.

• Wunder Capital, a Boulder, Colo.-based online lending platform focused on large-scale solar projects, has raised $3.6 million in Series A funding. Backers include Techstars Ventures, Fenway Summer and Fintech Collective.

• AreaMetrics, a Seattle-based consumer analytics platform for brick-and-mortar retailers, has raised $2 million in seed funding. Startup Capital Ventures and Quest Venture Partners co-led the round, and was joined by Seraph Group and Social Starts.

• Disruptive Multimedia, an SMS commerce startup founded by rapper and music producer Ryan Leslie, has raised $1.5 million in seed funding from backers like Betaworks and Ben Horowitz. Read more.

• Burst, a Boston-based mobile video platform, has raised an undisclosed amount of equity funding from the venture arm of Sinclair Broadcast Group (Nasdaq: SBGI) and Horizon Media.


• Crimson Hexagon, a Boston-based provider of social data analytics for enterprise decision-making, has raised $20 million in growth equity funding led by Sageview Capital.

• Immucor Inc., a Norcross, Ga.-based provider of transfusion and transplantation diagnostics, has acquired Sirona Genomics, a Mountain View, Calif.-based developer of gene sequencing typing applications. No financial terms were disclosed. Immucor is a portfolio company of TPG Capital.

• OpenGate Capital has completed its previously-announced acquisition of Bois & Materiaux, a French distributor of building materials, from Wolseley PLC (LSE: WOS). No financial terms were disclosed.


• PLX Pharma Inc., a Houston-based developer of an oral drug delivery system that is designed to increase safety and efficacy, has withdrawn its IPO registration due to “market conditions.” The company had planned to price 3.8 million shares at between $17 and $19 per share, with Maxim Group serving as sole underwriter. Shareholders include Integra Venture (6.6% pre-IPO stake) and Aurus Bios Fondo de Inversion Privado (6.3%).

• Senvion, a German wind turbine maker backed by Centerbridge Partners and Arpwood Capital, has set its Frankfurt IPO terms to 29.9 million shares being offered at between €20 and €23.50. This would give the company a market cap of between €1.3 billion and €1.53 billion. Read more.


• EnerCare (TSX: ENI) has acquired Service Experts LLC, a Richardson, Texas-based HVAC repair company, from American Capital for $340.75 million.

• FinTech Acquisition Corp. (Nasdaq: FNTC) has agreed to acquire CardConnect LLC, a King of Prussia, Penn.-based provider of payment processing solutions. Sellers include FTV Capital. FinTech Acquisition is a blank check acquisition company that raised $100 million in an early 2015 IPO.

• Frazier Healthcare Partners has hired RBC Capital Markets to find a buyer for PCI Pharma Services, a Philadelphia-based provider of outsourced packaging and clinical trial supply services to the pharma industry, according to Reuters. The deal could be valued at around $1 billion. Read more.

• Pamlico Capital has agreed to sell Clear Link Technologies LLC, a Salt Lake City-based provider of customer acquisition solutions to home services providers and insurance carriers, to Sykes Enterprises Inc. (Nasdaq: SYKE). No financial terms were disclosed.


• Atom Bank, an online bank backed by firms like BBVA and Anthemis Group, has acquired Grasp, a UK-based design and development firm. No financial terms were disclosed. Read more.

• Burberry (LSE: BRBY) has retained financial advisors to fend off a possible takeover attempt, after an unidentified investor acquired a 5% stake in the British fashion retailer. Read more.

•, a New York-based digital media company catering to millennials, has acquired Berlin-based mobile video aggregation app Hyper for an undisclosed amount. Mic has raised more than $30 million in VC funding from firms like Lightspeed Venture Partners, while Hyper was seeded by firms like Advancit Capital, Broadway Video Ventures, Lowercase Capital, Mesa Ventures and Freelands Ventures.

• Spark Therapeutics (Nasdaq: ONCE) has acquired Genable Technologies, an Ireland-based gene therapy startup, for more than $15 million in cash and stock.

• UserZoom Technologies, a San Jose, Calif.-based UX research and testing SaaS platform, has acquired YouEye, a Mountain View, Calif.-based research platform that automates in-person interviews for digital products . No financial terms were disclosed. UserZoom backers include TC Growth Partners, Trident Capital and StepStone Group. YouEye backers included Signatures Capital.

• Vale, a Brazil-listed iron ore producer, has signed an agreement whereby it gets an option to buy upwards of a 15% stake in Australian iron ore producer Fortescue (ASX: FMG). Read more.

• Veeqo, a Wales-based provider of e-commerce inventory software, has acquired ParcelBright, a London-based parcel delivery startup. No financial terms were disclosed. ParcelBright had been seeded by firms like Avonmore Developments, Howzat Partners, Talis Capital and Forward Partners. Read more.

• Vivint Solar (NYSE: VSLR) has terminated a $2.2 billion agreement to be acquired by SunEdison (NYSE: SUNE). Read more.


• 500 Startups has raised $10 million for a new seed fund focused on Vietnam-based startups. Read more.

• Main Post Partners, a San Francisco-based lower middle-market private equity firm founded by former members of Weston Presidio, has closed its debut fund with $410 million in capital commitments (including a $10m GP commit).



• Ruulke Bagijn has agreed to join AXA Investment Managers as global head of real assets private equity. She previously served as chief investment officer for private markets at Dutch pension fund PGGM. Read more.

• Carlo Calabria has agreed to join Barclays as chairman of M&A for Europe, Africa and the Middle East. He has been founding partner of CMC Capital. Read more.

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