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Term Sheet — Thursday, April 20


The following is from the latest print edition of Fortune, where I write a regular column about technology and startups called “Boom with a View.”

When a company as successful as Uber stumbles as dramatically as the startup did this year, the blame game begins. Uber’s leaders should have earlier addressed allegations of sexism and workplace harassment. Investors should have pressured management to fire HR policy violators. Certainly the board of directors should be held accountable for something.

“It’s been a tough 24 hours. I know the company is hurting,” CEO Travis Kalanick wrote to staff before announcing an independent review of the company’s workplace environment.

For years, Uber’s toxic culture was a poorly kept secret in Silicon Valley. A recent string of exposés only served to tell the rest of the world what techies already knew.

Some people tried to push for changes. “We have hit a dead end in trying to influence the company quietly from the inside,” wrote investors Mitch Kapor and Freada Kapor Klein in an open letter published in February. But many more said nothing, believing themselves powerless to make a difference at a company with a “super-voting” stock structure. (Kalanick and his cofounders essentially control Uber’s board with shares worth 10 votes to every one regular shareholder vote; he can’t easily be fired.)

Talk to anyone in the tech industry about Uber and your conversation will go something like this: “What a mess! Glad it’s not mine.” (Pause.) “But also, uh, we can do better!”

Preventing another Uber-like situation is not just the right thing to do, ethically speaking. It’s also in everyone’s best business interest. One company’s toxic culture reflects badly on an entire industry ecosystem.

The uncomfortable reality is that no single aspect of Uber’s culture—what critics call a strategy of growth at any cost, a view of human resources as a mere recruiting arm, a celebration of vague mantras including “Always be hustling” and “Be yourself”—is unique to the company. Until Uber’s recent public relations crisis, many people in Silicon Valley equated the company’s aggressive tactics with its success. (Worth $68 billion, it is the most valuable venture-backed company in the world.) Young founders admired Kalanick for his temerity.

They should heed the lessons of Uber’s plight. Many investors believe that a company’s beliefs and behaviors are set by the time it hires its 20th employee. A “cultural retrofit,” I’m told, is nearly impossible. That’s why venture capitalists increasingly prize clearly stated values, ethical decision-making, transparency among staff, and recruiters who can find diverse candidates for leadership roles.

These considerations can be an afterthought to entrepreneurs rushing to turn ideas into businesses. But facing them early is better than the alternative: building a wildly successful business that’s rotten to the core.


Deal scoop: Yesterday afternoon I reported that Marketo acquired ToutApp, a sales software company with backing from Andreessen Horowitz, Jackson Square Ventures, Founder Collective, and others. It’s part of a push from Marketo, which is backed by Vista Equity Partners, to connect its “mar-tech” software with sales software. Just like Petsmart’s acquisition of, this is a PE-backed company buying a VC-backed company. We only need one more to make a pattern… More on that here.

Speaking of: Yesterday I said I thought BC Partners’ buyout of PetSmart was the biggest LBO since the financial crisis. I thought wrong. It is among the biggest but far from the top deal: Heinz, Dell, Safeway and Keurig have it beat.

Valuation scoop: Getaround, a San Francisco car sharing startup, announced a new round of venture funding this morning: A $45 million Series C led by new investor Braemar Energy Ventures with participation from Toyota, SAIC, and existing investors Menlo Ventures and Triangle Peak Partners.

The round values the company at $176 million, according to a secondary share solicitation viewed by Fortune.

Reminder: Please “whitelist” this email address by adding it your address books to avoid losing Term Sheet to overzealous spam filters…


• Prepare for the digital health revolution.

34 leaders changing health care.

• Shonda Rhymes is into joining a corporate board.

• Google wants to know how people get sick.

• Facebook’s brainy technology.

• WeWork now offering facilities management services.


Investors flock to health care as a “safe haven.” The top VC in a race to find his own Parkinson’s cure. Lol: Larry Fink “doesn’t identify as powerful.” What’s your job? “Celebrity tech-splainer.” The latest counterpoint in the Wall Street bull vs. Fearless Girl debate. Facebook’s reality hole. No federal attorneys in place. FTC cracks down on #spon. Unicorn frap tastes like sour birthday cake and shame. The hot new food trend is literal garbage. The demise of Tilt.


Paytm, an Indian electronics payment provider, is in talks with SoftBank Group (TSE:9984) to raise between $1.2 billion to $1.5 billion at a valuation north of $7 billion, according to Reuters. Read more.

Microvast Power Systems, a subsidiary of Chinese-based battery system manufacturer Microvast, raised $400 million in funding. CITIC Securities led the round, and was joined by CDH Investment and National Venture Capital.

•  MakeSpace, a New York self-storage company, raised $30 million in funding, according to TechCrunch. Investors include 8VC, Upfront Ventures, Harmony Partners, and Summit Action. Read more.

SafeGraph, a San Francisco-based machine learning data provider, raised $16 million in Series A funding. Investors include IDG Ventures USA, Peter Thiel and Barry Sternlicht.

Yeecall, a Chinese mobile app company, raised $12 million in funding. Addor Capital led the round, and was joined by Sinovation Ventures.

Freebird, a Cambridge, Mass-based travel booking app maker, raised $5 million in funding. General Catalyst and Accomplice led the round. 

Cera, a London provider of technology-enabled homecare services for seniors, raised an additional £1.4 million ($1.8 million) in seed funding, closing the round at £2.7 million ($3.5 million). Credo Ventures led the round, and was joined by Kima Ventures.

Invertex, an Israeli fashion-tech company, raised $2 million in seed funding. VC OurCrowd led the round, and was joined by Permoda and angel investors.

RotoQL, a New York daily fantasy sports data and analytics company, raised $1.2 million in seed  funding. Boston Seed Capital and Saahil Sud led the round, with participation from DraftKings CEO Jason Robins.

Axel Springer SE (DB:SPR) invested an undisclosed amount in Uber, a San Francisco-based ride-hailing company. Read more.


ZappRx, a Cambridge, Mass. app for managing drug prescriptions, raised $25 million in Series B funding. Qiming US Healthcare Fund led the round, and was joined by SR One and GV.

Solv, a service for booking same-day doctor’s appointments, raised $6.25 million in Series A funding. Benchmark Capital led the round. Read more at Fortune.

Jaanuu, an El Segundo, Calif. medical apparel brand, raised $5 million in funding. Investors include Sipadan Capital, Innovation Global Capital, BAM Ventures, Potenza Capital, and M3 Ventures.


Main Post Partners acquired a 23% stake in Kuiu, a Los Angeles-based hunting gear company, for $50 million. Read more at Fortune.

Ciox Health, a portfolio company of New Mountain Capital, acquired ArroHealth, an Hauppauge, N.Y.-based provider of chart retrieval and risk adjustment services for health plans and provider groups. Financial terms weren’t disclosed.

Excelligence Learning Corporation, a Monterey, Calif. provider of educational products for early childhood and elementary teachers and parents, acquired Frog Street Press, a Crandall, Texas publisher of early childhood educational teaching materials. Excelligence Learning Corporation is backed by Brentwood Associates.

Hastings Equity Partners acquired Specialty Welding and Turnarounds, a Gonzales, La.-based provider of welding and other turnaround services for refinery, petrochemical and industrial customers. Financial terms weren’t disclosed.

Candescent Partners recapitalized Southeastern Spine Institute, a Mount Pleasant, S.C. medical practice specializing in spine care. Financial terms weren’t disclosed.

MédiS, which is backed by Actis, acquired Winthrop Pharma Senegal, a Senegal-based pharmaceuticals manufacturer, from Sanofi (ENXTPA:SAN). Financial terms weren’t disclosed.


Bitauto (NYSE:BITA) raised $1 billion from Tencent Holdings (SEHK:700), Baidu (Nasdaq:BIDU) and (Nasdaq:JD). Read more at Fortune.

Sawai Pharmaceutical (TSE:4555) agreed to acquire Denver, Colo.-based pharmaceutical company Upsher-Smith Laboratories’ generic drug unit for $1.05 billion, according to Reuters. Read more.

The Rohatyn Group acquired a majority stake in Eco Minera, an Argentina-based mining service company. No financial terms were disclosed.

AirAsia (KLSE:AIRASIA) acquired a 50% stake in Malaysia-based trip-booking platform Touristly. The deal was valued at MYR 11.5 million ($2.6 million).


Bunzl PLC acquired M.L. Kishigo Manufacturing Company, a Santa-Ana, Calif.-based provider of safety work wear. The seller was Solis Capital Partners. No financial terms were disclosed.

NewSpring Capital sold National Legal Services, a provider of legal document-preparation services, to Keais Records Service.

Whitebridge Pet Brands, which is owned by Frontenac, acquired Arthur Dogswell, a Los Angeles maker of treats and foods for dogs and cats. Sellers included TSG Consumer Partners. Financial terms weren’t disclosed.

Optimizely, a San Francisco-based provider of A/B testing services, acquired Experiment Engine, an Austin, Texas platform for managing A/B testing. Experiment Engine raised $1 million in venture funding from backers including Corsa Ventures, Founder Collective, and the Mercury Fund.

REV Group acquired Midwest Automotive Designs, an Elkhart, Indiana-based provider of custom sprinter conversion vans. Financial terms weren’t disclosed. Sellers include Petra Capital Partners, Merion Investment Partners and Pegasus Capital Group.

Audax Private Equity agreed to acquire Impact Facility Services, a Dallas-based fire safety inspection services provider. Financial terms weren’t announced. The seller was Caltius Equity Partners.

Falcon Capital Partners sold PharmaMetrics, a Fort Washington, Pa. provider of data management and analytics services for the pharmaceutical industry, to IntegriChain.


Mubadala Capital, an arm of Abu Dhabi’s state fund Mubadala, raised $1.5 billion for a new private equity fund, according to Reuters. Ardian backed the fund, as part of its agreement to invest $2.5 billion in private equity funds managed by Mubadala Capital.

Combine, a new venture firm founded by Soleio Cuervo and Adam Michela, raised $10.9 million for its inaugural fund, according to an SEC filing. No funding target was listed.

Nauta Capital, a Barcelona, Spain-based venture firm, raised $170 million for its latest fund.


Aron Grossman joined Gemspring Capital as a principal. Previously, Grossman was a principal at Rho Capital.

Amber Caska joined fintech startup Portfolia as a co-founder and COO. Previously she led Eric Schmidt’s family office Hillspire and was treasurer of Paul Allen’s investment office, Vulcan Inc.


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Term Sheet is produced by Laura Entis. Submit deal items here