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Term Sheet — Friday, March 3

SNAP, CRACKLE, POP

Good morning, Term Sheet readers. Today’s guest column, from Fortune writer Jen Wieczner, is a comprehensive look at the tech company on everyone’s tongues this week: Snap Inc.

Around 11 a.m. yesterday, 20 minutes before Snap stock began trading, I did something I never thought I would: I placed an order for two shares of the parent company of Snapchat, a photo-sharing app I have but rarely use. The two shares were all I could afford with the cash I had free in that (currently commission-free) brokerage account, because by then Snap had already risen from its IPO price of $17 per share to an asking price of $24.50.

Those trades have yet to be confirmed, but I was desperate to get my hands on the final IPO prospectus—which has yet to be filed with the SEC. (I’m still waiting, too.)

In that moment, it seemed like the entire world was watching with bated breath to see if Snap would really pull it off. Snapchat’s famously secretive founders even rang the opening bell at the New York Stock Exchange (even though the NYSE had nothing about it on its schedule when Snap priced its IPO the night before). The event was actually livestreamed; you can watch the 20-something Evan Spiegel and co-founder Bobby Murphy sheepishly push the button here.

Snap’s IPO by the numbers

• Snap stock soared as much as 51%, ending the day up 44%, at $24.48 per share.

• Remember, this was the first U.S. tech IPO of the year. The would-be first tech IPO of 2017, AppDynamics, was acquired by Cisco in the days leading up to its planned public market debut.

• Snap’s market cap is currently around $30 billion. It’s the biggest tech IPO since Alibaba in 2014, and the biggest American tech IPO since Facebook in 2012.

• Co-founders Evan Spiegel and Bobby Murphy are now worth at least $5.2 billion apiece. But their net worth could actually be as high as $6 billion, because their voting stock would likely be valued at a 5% to 10% premium to the nonvoting IPO shares sold to everyone else.

• Of the three analysts currently listed as covering Snap, two have sell ratings on the stock, and all of them have price targets lower than the current share price.

Snap out of it

When investors reminisce about the height of the 1990s dot-com bubble, they often reference a now-emblematic image of market euphoria, of taxi drivers turning into day traders and handing out stock tips to passengers. That’s how you know—as the saying goes—it’s time to get out.

In 2017, the picture is apparently not so different, except now, of course, instead of cabbies we have Uber drivers, and people can buy stocks on a whim with the tap of a smartphone screen. They can even pick up shares of mega-hot stock Snap, the parent company of Snapchat, on the day of its IPO.

So when Snap stock popped 44% on its first day trading on Thursday (profits and shareholder rights be damned), telltale indications of a bubble were seemingly everywhere you looked, if you were looking.

But the clearest sign of the loftiness of our current atmosphere struck me that afternoon in the form of a video, which in just seven seconds, perfectly encapsulates a microcosm of the millennial-driven unicorn zeitgeist. Posted on Twitter by the CEO of a Los Angeles startup, the brief clip features the entrepreneur in the back of an Uber. And the Uber driver tells the CEO he just bought one share of Snap for $25—on his phone, while he was driving. (When was the last time you mentioned Twitter, Uber and Snapchat in the same breath?) Watch the clip here.

You can imagine a world filled with self-driving cars where the idea of trading and driving is the least worrisome element of this scenario. And fortunately, the inefficiency of buying just a single share of a company is alleviated by the fact that the Uber driver used the brokerage startup Robinhood, which charges no trading commissions.

Still, the symbolic parallels to the dot-com era tech boom are undeniable. At a purchase price of $25 per Snap share, the Uber driver has already lost money—albeit less than $1. (Snap stock closed at $24.48 a share Thursday.) Robinhood, which has one million total users, says 43% of those who traded on Thursday bought Snap. The median age of those Snap investors: 26 years old, the same as Snap CEO Evan Spiegel.

While disappearing-photo app Snapchat may be most popular with millennials 25 and younger, it’s hard to believe that such rookie investors would be equipped to successfully trade a stock like Snap, which has the richest valuation in tech IPO history.

In 2014, Fortune’s Adam Lashinsky wrote of being convinced that we were in the midst of a tech bubble when the company Arista Networks called him—a full-time journalist—to directly offer him a slice of its impending IPO. Now, almost three years later, tech stocks are at all-time highs, Arista Networks stock has nearly tripled from its IPO price, and Lashinsky doesn’t own any of it.

So even when evidence of frothiness mounts to the point where you’re not sure if your head or the bubble will burst first, things have a way of getting even frothier. But lest we forget, we already know how this will end—we’ve seen it happen before.

(By the way: If you see signs of a tech bubble, or if Snap’s IPO made you even more bullish, tell me about it. Reach me on Twitter@jenwieczner, on email at jen.wieczner@fortune.com— or yes, on Snapchat @callmevx—or the old-fashioned way: 212.522.2026.)

To snap it up: IPO aftermath There was cheering. There was gloating. There was regret, by certain venture capitalists who missed their chance to invest in Snapchat in its early days, and didn’t share in the winnings on the big day.

Then the backlash began, with protesters picketing Snap’s headquarters in Los Angeles’ Silicon Beach claiming the company is ruining Venice Beach. (Sound familiar?) The protest even has a slogan for the company: “Snaprat.”

Meanwhile up in Mountain View, near Google’s headquarters (a target of similarly motivated protests a few years ago), one high school made a 1600x return on a $15,000 investment in Snapchat’s seed round.

The big question: Will Snap’s unprecedented decision to sell only nonvoting shares in its IPO lead other companies to do the same? Thomas Ivey, a partner at law firm Skadden who is based in Silicon Valley, tells me: “It’s definitely a function of how Snap is perceived—not every company could get away with this. There’s a handful of unicorns that could pull this off, but by no means should this be viewed as every company that wants to do an IPO should be considering this type of structure, because there will be people who won’t like it… It’s not even going to be close to 50% of IPOs that will have a structure like this.” In other words, for companies with billion-dollar valuations, it can’t hurt to try, if they can still drum up demand for their shares—as Snap did. —Jen Wieczner

THE LATEST FROM FORTUNE…

• Why Snap’s IPO was a $1.1 billion disaster for the company. (And why it was actually a success.)

• The VCs selling their shares in Snap. (And the media giant that’s investing.)

• Samsung chief’s ‘trial of the century’ starts next week.

• Barnes & Noble blames Adele for worsening sales.

• Hootsuite’s CEO is sorry he told a reporter to call a sex hotline.

…AND ELSEWHERE

How Evan Spiegel is feeling. The firm that bought Snap at 98 cents a share. 5-Hour Energy’s founder wants to make the world a healthier place. The Oscars as proof we’re living in the Matrix. How to steal a river.

VENTURE DEALS

UCAR, a Chinese car service that competes with Didi, raised RMB 4.6 billion ($670 million) in funding from four investors including UnionPay, according to TechCrunch. The company plans to close the funding round at more than $1 billion. Read more.

Paytm E-Commerce, an Indian online marketplace owned by One97 Communications, raised $200 million from Alibaba (NYSE:BABA) and SAIF Partners, according to Reuters. Read more.

C3 IoT, a Redwood City, Calif.-based developer of enterprise software, raised an undisclosed amount in Series E funding at a $1.4 billion pre-money valuation. Breyer Capital led the round, and was joined by TPG, Sutter Hill, Wildcat Venture Partners, Pat House, and Thomas Siebel.

Examity, a Needham, Mass. provider of proctoring and identify verification for online testing, raised $21 million in funding from University Ventures.

Upstart, a San Carlos, Calif. online lending platform, raised $32.5 million in funding. Rakuten led the round, and was joined by Third Point Ventures, Khosla Ventures, and First Round Capital.

Nearpod, a Hallandale, Fla. provider of a learning platform for classrooms, raised $21 million in Series B funding. Insight Venture Partners led the round.

Sensibill, a Toronto-based fintech company, raised $17.3 million in a Series A funding. Information Venture Partners and OpenText Enterprise Apps Fund led the round, with participation from Operative Capital, Mistral Venture Partners, and Impression Ventures.

Bobo’s Oat Bars, a Boulder, Colo. producer of baked oat bars, raised $8 million in Series A funding, according to the Denver Business Journal. Boulder Investment Group Reprise led the round, and was joined by Range Light. Read more.

Music Audience Exchange, a Dallas developer of an online platform that connects brands with musicians, raised $6 million in funding. MATH Venture Partners and KDWC Ventures led the round, with participation from G-Bar Ventures, and Gregg Latterman.

Booksy, a Warsaw-based scheduling software company for appointment-based businesses, raised £3.4 million ($4.2 million) in Series A funding. OpenOcean led the round, and was joined by several European angel investors.

Amper Music, a New York developer of an online platform for creating customized music, raised $4 million in funding.

Lucy, a San Francisco startup offering services for expectant parents, raised $2.25 million in funding. Felicis Ventures and Forerunner Ventures led the round.

HEALTH + LIFE SCIENCES DEALS

Surefire Medical, a Westminster, Colo. developer of site-specific delivery devices for the Interventional Oncology market, raised $12.8 million in Series D funding. ORI Healthcare Fund led the round.

PRIVATE EQUITY DEALS

• Orazul Energy Partners, a operator of renewable power projects owned by I Squared Capital, raised $100 million in funding from IFC and the IFC Global Infrastructure Fund.

• Industrial Growth Partners acquired IOTA Engineering, a Tuscon, Ariz. manufacturer of backup power supply equipment. Financial terms weren’t disclosed.

• Vestar Capital invested in Edward Don & Company, a Woodridge, Ill.-based distributor of foodservice equipment and supplies. Terms weren’t disclosed.

• BHMS Investments invested in Peter C. Foy & Associates Insurance Services, a Woodland Hills, Calif. insurance brokerage firm.

OTHER DEALS

• Four Holdings acquired Agent Provocateur, a London-based luxury lingerie retailer backed by 3i, from administration. Terms weren’t disclosed. Read more.

• Toshiba Corp (TSE:6502) is preparing to spin off Landis+Gyr, its Zug, Switzerland-based smart meter group, in a deal that could value the business at $2 billion, according to Reuters. Read more.

• Kraken, a San Francisco bitcoin exchange, acquired Cryptowatch, a real-time market visualization tool.

EXITS

• Carlyle Group (Nasdaq:CG) agreed to acquire Arctic Glacier Group, an packaged-ice producer backed by H.I.G. Capital, for $723 million, according to S&P Global Ratings.

• AXIO Group, an Epiris portfolio company, agreed to sell RISI, a Bedford, Mass.-based information provider for the global forest products industry, to Euromoney Institutional Investor for $125 million.

• Palo Alto Networks (NYSE:PANW) acquired LightCyber, an Israeli cybersecurity company, for $105 million. LightCyber raised around $36 million in venture funding from investors including Battery Ventures and Access Industries.

FIRMS + FUNDS

Beijing Hosen Investment Management, a Beijing-based private equity firm focused on investments in food and agribusiness, raised $440 million for its third fund, Hosen Fund III.

Sofinnova Partners, a Paris-based venture capital and private equity firm, raised €106 million ($112 million) for Sofinnova Industrial Biotech, its first industrial biotech fund, which will focus on investments in the renewable chemistry sector.

J.F. Lehman & Co, a New York-based private equity firm specializing in lower middle market acquisitions, raised $833 million for its latest fund.

• FEG Private Investors, an affiliate of Fund Evaluation Group, raised $194.5 million for its third private capital fund of funds, FEG Private Opportunities Fund III.

PEOPLE

Strattam Capital promoted Hilary Fleischer and Kyle Reesing from vice president to principal.

Greg Belanger has joined Burke Capital as a managing director of its technology consulting practice. Previously, Burke was president of Comerica Bank‘s technology and life sciences division.

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