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Term Sheet — Wednesday, March 29


There are lots of factors that went into creating the “Age of Unicorns” – the unusual abundance of highly valued private companies — but startups avoiding the public markets is the biggest one. In lieu of an IPO, startups strived for the billion-dollar valuation. It gave them all the same benefits of an IPO (except a financial return) — external validation for customers, employees, the media, and future investors — without the hassles of quarterly reporting.

For that reason, I’ve always thought the official end of the unicorn era would happen when the biggest, most valuable, most high profile and most quintessential billion-dollar startups, Airbnb and Uber, finally went public. According to Silicon Valley gossip, those two IPOs aren’t likely to happen till 2018.

In the meantime, there are other signs that our time in the enchanted forest (©Matt Levine) is coming to an end. To whit: Bloomberg has declared that Silicon Valley startups now favor IPOs over deals. Why? Because many acquirers aren’t willing to pony up enough cash to support their high valuations. In some cases, the buyers don’t want to own money-losers. (It’s one thing to take a goodwill impairment on a buyout, a VC told me last night, it’s another to cover your new subsidiary’s losses at the same time.)

In other words, IPOs are cool again, but they’re especially cool for companies with no other option. Bloomberg reports that AppNexus did a dual-track IPO/sale process; deal talks broke down over price and now it’s going public. Likewise, Okta tried to sell and the deal fell apart; now it’s going public. Same goes for three other startups – Plex Systems, MapR and Forescout.  Likewise, Cloudera is on deck to go public. Pinterest is “on the path” to IPO. And according to reports this morning, so is BuzzFeed.

To understand what a reversal that is, look at how prominent CEOs viewed IPOs over the last few years:

Uber CEO Travis Kalanick: “We are going to IPO as late as humanly possible. It’ll be one day before my employees and significant others come to my office with pitchforks and torches. We will IPO the day before that. “

Palantir CEO Alex Karp: “The minute companies go public, they are less competitive. … You need a lot of creative, wacky people that maybe Wall Street won’t understand. They might say the wrong thing all the way through an interview. You really want your people to be focused on solving the problem, not on cashing in.”

And course there is Facebook CEO Mark Zuckerberg, who for years was “very outspoken” about companies staying private for as long as possible. (He has since reversed that stance, saying Facebook’s IPO made the company stronger.)

It got to the point where prominent VCs like Bill Gurley, Bill Maris and Fred Wilson were openly chiding their portfolio companies to grow up and go public. Selfishly, as a reporter who is tired of relying on leaks to understand the financial performance and business models of these companies, I agree with them. Now we’re getting what we wished for.

The question will be whether public market investors feel the same way about high valuations and cash burn as potential acquirers do. If the demand for Snap is any indication, the answer is a resounding “no.” But in addition to being a unicorn, Snap was also a special snowflake. Other money-losing startups without the same name recognition, buzz, and cool factor may not get the same treatment.


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Employee burnout is becoming a huge problem in the U.S. When CEOs don’t win awards, they make more acquisitions. Sears CEO Eddie Lampert cashes in as stores cash out. Facebook app now indistinguishable from Snap. Lyft is “woke.” Deutsche Bank doesn’t know what to do with $300 million in Trump debt. Sam Altman: The future of humanity is to “merge” with technology.  Machines pick stocks at Blackrock. The latest acquisition targets: Indie beauty brands.


Rigetti Computing, a Berkeley, Calif. quantum computing startup, raised $64 million in funding. Investors include Andreessen Horowitz and Vy Capital.

Inocucor Technologies, a Montreal manufacturer of sustainable biological crop inputs, raised C$38.8 million ($29 million) in Series B funding. TPG Alternative and Renewable Technologies led the round.

MasterClass, a San Francisco provider of online classes taught by instructors such as Aaron Sorkin, Serena Williams, and Frank Gehry, raised $35 million in Series C funding. IVP led the round, and was joined by GSV Acceleration, Sam Lessin, New Enterprise Associates, Javelin Venture Partners, Bloomberg Beta, Advancit Capital, Novel TMT, Yan-David Erlich, and Matthew Rutler.

MapD, a San Francisco big data analysis company, raised $25 million in Series B funding. New Enterprise Associates led the round, and was joined by Nvidia (Nasdaq:NVDA), Vanedge Capital, and Verizon Ventures. Read more at Fortune.

Icertis, a Bellevue, Wash.-based provider of enterprise contract management software, raised $25 million in Series C funding. B Capital Group led the group, and was joined by Ignition Partners, Greycroft,, and Eight Roads Ventures.

Freightos, a Hong Kong-based logistics technology company, raised $25 million in Series B funding. GE Ventures led the round.

Sussex Wire, a Radnor, Pa. manufacturer of cold-formed metal parts and components, raised $12 million from NewSpring Capital.

ControlUp, a Sunnyvale, Calif. analytics and management platform, raised $10 million in Series B funding. K1 Capital and Jerusalem Venture Partners led the round.

Licious, an Indian startup that sells meat products online, raised $10 million in Series B funding, according to the Economic Times. Investors include Mayfield India and 3one4 Capital. Read more.

RightHand Robotics, a Somerville, Mass. robotic order-picking systems manufacturer, raised $8 million in Series A funding. Investors include Playground Global, Matrix Partners, Seven Seas Partners, and Dream Incubator.

Carbon Health, a San Francisco mobile-based connected healthcare network, raised  $6.5 million in funding. BuildersVC led the round, and was joined by Javelin Venture Partners, Two Sigma Ventures, Bullpen Capital, and angel investors.

Closetbox, a Denver, Colo.-based provider of concierge storage services, raised $5.5 million in funding.

Ripjar, a London data intelligence platform, raised £3.8 million ($4.7 million) in funding from Winton Ventures.

Smyte, a San Francisco SaaS startup helping websites stop credit card fraud, raised $4 million in Series A funding. Avalon Ventures led the round, and was joined by Baseline Ventures, Founder Collective, Harrison Metal, Upside Partnership, and Y Combinator.

Gamee, a Prague social gaming network, raised €2 million ($2.2 million) in funding. Initial Capital and Credo Ventures led the round, with participation from Index Ventures and angel investors.

HeyOrca, a St. John’s, Canada cloud-based social media agency, raised $2 million in seed funding.

Storyhunter, a Brooklyn, N.Y. talent marketplace for freelance video producers and journalists, raised $1.3 million in funding. Draper Associates led the round, and was joined by Frontier Ventures and

Emoticast, a London platform for sharing music-related emojis, raised an undisclosed amount in funding, bringing its total investment to $5 million. Investors include Sean Parker, Strangeloop Ventures,, and David Guetta.


Antiva Biosciences, a Menlo Park, Calif. biotech company developing antiviral drugs to treat HPV infections, raised $22 million in Series C funding. Investors include Brace Pharmaceuticals, NS, Osage University Partners, Alexandria Venture Investments, Canaan, and Sofinnova.

GeneQuantum Healthcare, a Chinese biotherapeutics company, raised $5.8 million in Series A funding. Oriza Seed Venture Capital led the round, and was joined by TF Capital.

Nosopharm, a French biotech company focused on researching and developing antimicrobial molecules, raised $2.6 million in funding. Investors include Auriga Partners, Kreaxi, and Alto Invest.


Carlyle Group (Nasdaq:CG)and Hellman & Friedman are considering selling a minority stake in Pharmaceutical Product Development, a Wilmington, N.C. contract research for the biotech industry, in a deal that would value the company at more than $9 billion, according to Reuters. Interested investors include Singapore’s sovereign wealth fund GIC and Abu Dhabi Investment Authority. Read more.

Cision, a Chicago-based PR company backed by GTCR that recently merged with blank-check company Capital Acquisition Corp III, acquired Bulletin Intelligence, a Reston, Va.-based provider of briefings for senior corporate and government executives. Financial terms weren’t disclosed.

Magnate Worldwide, a Carlsbad, Calif. shipping company backed by CIVC Partners and Magnate Capital Partners, acquired Premium Transportation Logistics, a Toledo, Ohio provider of logistic services. Financial terms weren’t disclosed.

TPG Capital agreed to sell its 25% stake in Strauss Coffee, a Strauss Group (TASE:STRS) subsidiary, back to the company for around $279 million.

BenefitMall, a Dallas provider of payroll and human resource services backed by HarbourVest Partners and Austin Ventures, is exploring sale, according to the Wall Street Journal. Read more.


Careem, a Dubai-based ride-hailing company, is exploring a potential sale or IPO, per Reuters. Read more.

CarGurus, a Cambridge, Mass. online platform for researching and shopping for used cars, hired Goldman Sachs and Allen & Co. to prepare for its upcoming IPO, according to Axios. Read more.


Nippon Shokubai agreed to acquire Sirrus, a Cincinnati developer of electron deficient monomers and derivatives. Sirrus raised $20 million in equity funding from backers including Braemer Energy Ventures and GM Ventures.

Canon (TSE:7751) acquired Kite, a London on-demand print tech startup, according to TechCrunch. Terms weren’t disclosed. Read more.

TPG agreed to acquire a majority stake in the Vietnam Australia International School, which operates preschool campuses in Ho Chi Minh. Exiting shareholders include Mekong Enterprise Fund and MAJ Invest.


Gauge Capital, a Southlake, Texas private equity firm, raised $500 million for its second fund, Gauge Capital II.


Howard Shore is stepping down as chief executive of Shore Capital Group. Simon Fine and David Kaye will take over as co-CEOs, while Shore will remain an executive chairman.

Zeynep Young joined Next Coast Ventures as a venture partner. Young is the former chief executive of Double Line Partners.

Matt Klinger joined Twin Bridge Capital Partners as a principal. Previously Klinger was a senior vice president at iCapital Network.

Brian Cooper joined Tengram Capital Partners as a principal. In addition, the firm promoted Kris Parks to principal and Michael Zappala to senior associate.

Antoine Papiernik is now chairman of Sofinnova Partners. He succeeds Denis Lucquin, who will remain at the firm as a managing partner.

Baceline Investments promoted Brian Capstick, Sheri Corral, Todd Laurie, Ari Michaeli, Lindsey Reevie, and Jonathan Ruby to partner.

Andrew Freeman joined H.I.G. Middle Market, the middle market affiliate of H.I.G. Capital, as a managing director. Previously Freeman was a partner at Paine & Partners.


Term Sheet is produced by Laura Entis. Submit deal items hereView this email in your browser.