OPEN MIC, FUTURE EDITION
Today I’m sharing highlights from your answers to the question, “What's your top business-related prediction for 2017?”
IPOs: Term Sheet readers predict more IPOs in 2017. Why?
• Because “funding valuations will come down.”
• Because “Dodd/Frank and tax law will change. The alimentary canal that is plugged right now will release.”
• Because “the Snap IPO will be oversubscribed and wildly successful, leading to increased confidence in public markets (read: 'irrational exuberance').”
Israel Klein of Roberti Global offered the only contrarian prediction of a “record low” number of IPOs.
MARKETS: Readers don’t expect the Trump rally to last. Why?
• Because “macro realities will prove more meaningful than Trump’s antics with individual companies and the un-fulfill-able promise of lower taxes.”
• Because “most sectors are hugely overvalued, especially in the context of the current global growth environment and continuing political uncertainty.”
• Because of “‘buy on the rumor, sell on the fact.’ The market will decline once Trump takes office.”
Gerry Langeler of OVP Venture Partners wrote: “The ‘Trump rally’ will dissipate into ‘Trump reality.’”
M&A: Readers predict increased consolidation and more exits. Why?
• Because “the bigger companies are building up their talent and tech armories to compete with established and soon-to-IPO companies.”
• Because “corporations will buy innovation.”
• Because “small and mid-cap tech and healthcare are low hanging fruit acquisition targets for repatriated monies in the next two to three years.”
• Because of “a deluge of foreign M&A led by Chinese investment/purchase of traditional US companies.”
• Because we’ll see “more large pharma M&A and asset swaps.”
• Because “Trump's regulatory policies means fewer mergers will be killed on anti-trust grounds.”
• Because “monster-sized startup M&A continues to skyrocket.”
Penry Price, VP of Marketing Solutions at LinkedIn, expects consolidation in marketing as companies elect to use fewer vendors. Tim Chen, the founder and CEO of NerdWallet, predicts acquisitions and partnerships between Wall Street and the Silicon Valley will heat up.
Plus a two very specific M&A predictions:
• “Netflix gets acquired.”
• “Sprint and SoftBank make another play for T-Mobile, and Charter Communications will engage in a bidding war for it.”
FIRMS + FUNDS: Readers expect limited partners to become more conservative and take a more active role.
• “Public equity portfolio managers will migrate from ‘growth-seeker’ to ‘asset protector’ mode.”
• “Family offices will begin filling the early stage funding gap.”
• “More LPs will set up separate vehicles to invest alongside their funds or bring more investing in-house as a whole.”
Michael David of Bridge Bank/Western Alliance Bancorp expects existing portfolios to become more concentrated, with on follow-on investments outweighing new ones, and an increased interest in “end-of-life” facilities for mature funds.
WEED: Readers predict a dealmaking boom in the marijuana industry.
• “It's a generational opportunity that’s going mainstream.”
• “The Cannabis tech M&A market will cross over into the traditional tech M&A market.”
STARTUPS: Readers predict a pullback: Industry-wide layoffs, more financial discipline, and a commercial real estate crash in San Francisco.
• “When Uber is pushed to go public after Snap, investors will realize how hard the revenue situation really is in unicorns.”
• “More emphasis on growing cash-flow optimization in mid- to late-stage venture market to protect for 'the cataclysmic event.'”
• “Early stage investors will become more conservative ('academic') about valuations, but will be more focused on 'the Consumer Discretionary Upstart du Jour.'”
CORPORATE: Readers predict transparency, bankruptcies.
• “Three or more publicly traded retailers will go out of business or file for bankruptcy.”
• “Americans will ask more and more of the companies we support to find out where they stand on certain issues. If I were an executive of a public company I would be concerned of some past decision or endorsement coming back to haunt me.”
George Corugedo of RedPoint Global predicts that “data literacy” will be the new buzzword in the boardroom. BJ Lackland of Lighter Capital predicts that access to “unbiased alternative funding” for businesses will become more important than ever.
More To Come: Thanks to everyone who sent in answers. Later this week, I’ll share your most interesting macro and technology predictions, as well as your one-word descriptions of the next four years, which were, in a word, terrific.
THE LATEST FROM FORTUNE...
• Elon Musk’s next venture.
• IPOs just had their second-worse year since 1992.
• Fighting short-termism.
• Mark Cuban, Donald Trump, and robotics.
• Apple’s record tax bill.
A clash at the top of Tata. Women now make up the majority of law school students. How Pebble fell apart. Alphabet’s AI plans, and the great AI awakening. Soylent reformulated. Snapchat plays hard-to-get. Follow the pills. The latest post-truth. The flight that drank all the booze. On the Road for kids. Odwalla’s founder is back with a nut milk business.
• OneWeb, an Arlington, Va.-based company developing a network of satellites to provide affordable Internet access, raised $1.2 billion. SoftBank Group Corp. (TSE:9984) contributed $1 billion, with the remaining $200 million coming from existing investors. Read more at Fortune.
• Careem, a Dubai-based ride-hailing company, raised $350 million in new funding. Rakuten and Saudi Telecom Co. led the investment round, which values Careem at more than $1 billion. Read more at Fortune.
• Lumus, an Israeli developer of augmented reality wearable displays, raised $30 million in funding. Investors include HTC and Quanta Computer.
• NoBroker, a Bangalore-based real estate marketplace, raised $7 million in new funding, according to TechCrunch. KTB Ventures led the round, with participation from existing backers SAIF Partners, Beenext, and Digital Garage. Read more.
• VictorOps, a Boulder, Colo.-based maker of real-time IT incident management software, raised an additional $2.8 million in Series B funding from undisclosed investors, which brings the round to $15 million.
• Erco Energía SAS, a Colombian engineering, procurement and construction firm, raised an undisclosed amount of funding from FCP Innovacion and Innova Capital Partners.
PRIVATE EQUITY DEALS
• Lightyear Capital has agreed to sell RidgeWorth Holdings, the holding company for asset manager RidgeWorth Capital Management, to Virtus Investment Partners (NasdaqGS:VRTS) for $472 million .
• Exponent Private Equity has acquired Leisure Pass, a London-based city attraction sightseeing company, from Primary Capital. Financial terms were not disclosed.
• Littlejohn & Co., a Greenwich, Conn.-based private equity firm, has agreed to acquire Brown Jordan International, a St. Augustine, Fla.-based manufacturer of indoor and outdoor furniture. Financial terms were not disclosed.
• Odyssey Investment Partners, a New York City-based private equity firm, has invested an undisclosed amount in Addison Group, a Chicago-based professional staffing firm.
• Confie, a Huntington Beach, Calif.-based personal and commercial insurance provider backed by ARBY Partners, has acquired Oasis Insurance, a Mesa, Ariz.-based provider of non-standard auto insurance in Arizona. Financial terms were not disclosed.
• Fairfax Financial Holdings (TSX:FFH) has agreed to buy Allied World Assurance Company Holdings AG (NYSE:AWH) for $4.9 billion in cash and equity, according to Reuters. At $54 per share ($10 in cash and $44 in Fairfax stock), the offer represents an 18% premium on Allied World’s close on Friday. Read more.
• Braas Monier Building Group (DB:BMSA) has agreed to be taken over by rival Standard Industries, a Parsippany, N.J.-based manufacturer of roofing products for €1.1 billion ($1.15 billion), according to Reuters. Read more.
• Xura, Inc., a Wakefield, Mass.-based provider of digital communications services owned by Siris Capital, has agreed to buy Mitel Mobility, a mobile division owned by Mitel Networks Corp. (NasdaqGS:MITL) and Ranzure Network, a Richardson, Texas-based wireless service provider. Financial terms were not disclosed, but reports value the deal at around $385 million.
• MassRoots (OTCPK:MSRT), a technology platforms for the cannabis industry, has agreed to acquire Whaxy, a cannabis-focused social network, for $100,000 in cash and 2.9 million shares of MassRoots’ common stock.
• Trivago (NasdaqGS:TRVG) shares rose nearly 11 percent in the company’s public debut on Friday. The company had priced 26.1 million depositary shares at $11, below its expected range of $13 to $15.
• Svenska Cellulosa AB (OM:SCA B) has agreed to buy BSN Medical, a developer of products for wound care, compression therapy and orthopedics, for €2.74 billion euros ($2.9 billion) from EQT Partners AB, a Stockholm-based private equity and venture capital firm.
• Thundersoft (SZSE:300496) has acquired Rightware, a Finnish automotive software company, for €64 million ($68 million). Rightware raised $9.45 million from investors including Nexit Ventures and Inventure Oy.
• Great Point Partners, a Greenwich, Conn.-based private equity firm, has sold its stake in Professional Physical Therapy, a Uniondale, N.Y.-based provider of physical therapy and rehabilitation services, to Thomas H. Lee Partners.
FIRMS + FUNDS
• CenterGate Capital Partners raised $350 million for its first fund, which will focus on lower mid-market companies in North America.
• High Growth Robotics launched the British Robotics Seed Fund, which will invest in U.K.-based robotics startups. The fund’s target is $2.5 million (£2 million). Sapphire Capital Partners will help manage the fund.
• Sebastian Peck is now managing director at InMotion, Jaguar Land Rover’s mobility business and corporate venture capital arm. Previously, Peck was chief financial officer of Health Bridge, a London-based healthcare startup.
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