Term Sheet — Tuesday, September 12
Good morning, Term Sheet readers.
EQUIFAX SAGA: OK, this is my favorite story of the day. After the Equifax security breach left more than 143 million Americans vulnerable, one founder took matters into his own hands. Joshua Browder, who has been called “The Robin Hood of the Internet,” created a chatbot called DoNotPay that lets people sue Equifax for up to $25,000 without a lawyer. (It’s the same bot that has helped people fight more than 375K parking tickets in NYC, Seattle, and the U.K. #priorities).
There’s been chatter that blockchain technology, specifically smart contracts, will replace lawyers, but DoNotPay demonstrates it doesn’t have to be so complicated to cut out the middleman. In one day, Browder literally replaced your lawyer with an incredibly simplistic chatbot. ¯\_(ツ)_/¯ “It’s really such a low-hanging fruit. All you have to do is figure out how these documents are constructed and then use technology to automate them,” Browder said in January.
On the bright side, at least we’re getting some cool innovation out of the whole mess.
DEEP POCKETS: Sovereign investors are not playing around. Sovereign wealth funds (SWFs), which run more $6.59 trillion in assets, are on the hunt for unicorns.
Since 2012, the number of SWF-funded tech deals has grown by 38% and now represents 27% of total deal flow. In other words, the taboo around taking money from SWFs has largely gone away. Sovereigns were long criticized for their inexperience in high-growth scaling and lack of expertise in the tech sector, but now most of them are considered to be on par with some of the leading traditional global VC funds. Crazy what a few years and a few (very large) SoftBank Vision Fund checks can do.
SOFI CEO OUT: Well, that was fast. Following allegations of sexual misconduct at SoFi, Michael Cagney will be stepping down from his position as CEO. In a memo to the staff, he said, "the combination of HR-related litigation and negative press have become a distraction from the company’s core mission.”
THANKS: As always, thank you for all the feedback that’s continued to pour in since I took on Term Sheet. So far, I’ve heard that you’d like to keep the top portion of Term Sheet short & sweet. My questions for you are: Do you want more commentary? Or do you prefer for the blurbs to stay news-focused with my comments interspersed throughout? Just out here living & learning. Appreciate you guys.
THE LATEST FROM FORTUNE...
• The diamond industry is obsessed with the blockchain (by Jeff John Roberts)
• REI boss shows how to be a CEO in the Age of Trump (by Claire Zillman)
• This former chemical company went ‘green’—and its stock took off (by Erika Fry)
• This place lets you pay your taxes in Bitcoin (by David Meyer)
• What a $2.7 million Mercedes looks like (by Kirsten Korosec)
• Zoox, a Menlo Park, Calif.-based self-driving car startup, is reportedly in talks to raise at least $1 billion from SoftBank, according to Axios. The deal could value the company at between $3 billion and $4 billion. Read more.
• Lesara, a Berlin-based online fashion and lifestyle retailer, raised $40 million in funding. Investors were not disclosed.
• SendinBlue, a France-based digital marketing suite for small businesses, raised $36 million in Series A funding. Partech Ventures led the round.
• SPR Therapeutics, Inc., a Cleveland, Ohio-based medical device company, raised $25 million in Series C funding. Frontcourt Ventures led the round.
• Ieso Digital Health, a U.K.-based mental health care services provider, raised $24 million in funding. Investors include Draper Esprit and Touchstone Innovations.
• Eco-Site LLC, a Durham, N.C.-based wireless tower and infrastructure company, raised $20 million in funding. MSouth Equity Partners led the round.
• Tonbo Imaging, a Bangalore- and Palo Alto-based developer of advanced imaging and sensor systems, raised $17 million in Series B funding. WRV Capital led the round, and was joined by investors including Artiman Ventures, Qualcomm Ventures, and Edelweiss Private Equity.
• Ampt LLC, a Fort Collins, Colo.-based power conversion technology provider, raised $15 million in funding. Investors included Bohemian Investments.
• Entrepreneur First, a London-based company builder that invests in individuals “pre-team, pre-idea” to help create new technology startups, raised $12.4 million in new funding, according to TechCrunch. Greylock Partners led the round. Read more.
• SoftIron, a London-based provider of enterprise data storage, raised $7 million in funding. Earth Capital Partners led the round.
• Lenda, a San Francisco-based mortgage platform, raised $5.25 million in Series A funding. SF Capital Group led the round, and was joined by investors including CreditEase Fintech Investment Fund and Rubicon Venture Capital.
• Red Dot Payment, a Singapore-based payment gateway startup, raised $5.2 million in Series B funding. Investors include GMO Venture Partners, Wavemaker Partners, Toivo Annus, MDI Ventures, and DORR Group.
• InfoSum, a U.K.-based data security firm, raised $5 million in seed funding. Investors include Saul Klein, Mike Chalfen, and Mark Suster.
• Genvid, a New York-based game technology solutions provider, raised $2.5 million in funding. March Capital Partners led the round, and was joined by investors including OCA Ventures.
• EEVO, a Brooklyn-based provider of tools for the creation of interactive virtual reality content, raised $1.3 million in seed funding. Investors include Eagle Advisors, FundersClub, and 37 Angels.
• Cadmus Group, a Waltham, Mass.-based technical and strategic consultancy, raised funding of an undisclosed amount from Enlightenment Capital.
• Pegasus Solar, a San Jose, Calif.-based designer and manufacturer of rooftop mounting systems for solar installations, raised funding of an undisclosed amount. Ecosystem Integrity Fund led the round, and was joined by investors including Okapi Capital, Howard Wenger, and Mike Miskovsky.
HEALTH AND LIFE SCIENCES DEALS
• 23andMe, a Mountain View, Calif.-based personal genetics company, raised a previously announced $250 million round in funding. Sequoia Capital led the round, and was joined by investors including Euclidean Capital, Altimeter Capital, the Wallenberg Foundation, Fidelity Management & Research Company, and Casdin Capital.
• SpecificiT Pharma Inc, a Montreal-based developer of personalized hematological cancer immunotherapies, raised seed funding of an undisclosed amount. Investors include AmorChem, Sanderling Ventures and Accel-Rx Health Sciences Accelerator.
PRIVATE EQUITY DEALS
• Stone Point Capital agreed to acquire a minority stake in Applied Systems, a University Park, Ill.-based provider of cloud-based software that powers the business of insurance. Financial terms weren’t disclosed.
• Levine Leichtman Capital Partners acquired Capsa, a Portland, Ore.-based provider of mobile workstations, medication management products and pharmacy automation solutions for healthcare settings. Financial terms weren’t disclosed.
• Genstar Capital recapitalized Apex Fund Services and the subsequent acquisition of Equinoxe Alternative Investment Services. Financial terms weren’t disclosed.
• Earthlite LLC, which is backed by Branford Castle Partners, acquired Continuum Footspas LLC, a New Berlin, Wisc.-based maker of pedicure chairs. Financial terms weren’t disclosed.
• Silverfleet Capital agreed to buy Pumpenfabrik Wangen GmbH, a Germany-based screw pump maker. Financial terms weren’t disclosed.
• Bullhorn, a portfolio company of Vista Equity Partners, acquired Connexys, a Netherlands-based provider of recruitment solutions for mainland Europe. Financial terms weren’t disclosed.
• Vivint, the home security company, is reportedly considering a dual-track process, according to Fox Business. A deal could value the company at over $3 billion. Blackstone backs the company.
• Cabot Credit Management, a U.K.-based debt collection firm, has reportedly delayed its $1.3 billion IPO after a resignation from its board. The company is backed by Encore Capital Group. Reuters.
• Secoo Holdings, a Beijing-based online luxury retailer, has set the terms of its IPO of American Depositary Share. The company said it plans to raise 8.5 million shares at a range of $11.50 to $13.50, raising about $106 million. In 2016, the company lost $94.5 million on revenue of $382.6 million.Secoo is backed by IDG Ventures(24.5% pre-offering) Ping An Insurance(9.2%) China Capital Media (11.7%), and Ventech China(7.2%). Jefferies and BNP Paribas have been named joint bookrunners in the deal,. Secoo plans to list on the Nasdaq as “SECO.”
• BP Midstream Partners, the U.K.-based petroleum company, has filed for an IPO to raise up to $100 million. BP was said to be considering an IPO for its some of its assets, including crude oil, natural gas, and refined product pipelines located in the Midwest and on the U.S. Gulf Coast. In 2016, it booked revenue of $103 million and earnings of $45.9 million. Citi, Goldman Sachs, Morgan Stanley, Barclays, Credit Suisse, J.P. Morgan, and UBS are joint bookrunners in the deal. The company plans to list on NYSE as “BPMP.”
• Canuelas Mill, a Buenos Aires, Argentina-based food company, filed for an IPO of ADSs raising up to $100 million. In 2016, the company posted sales of $2 billion on earnings on $53 million. J.P. Morgan and UBS are joint global coordinators in the deal, with HSBC and Itau BBA as joint bookrunners. The company plans to list on the NYSE as “MOLC.”
• Rackspace agreed to acquire Datapipe, a Jersey City, N.J.-based manager of multi-platform hybrid IT, according to TechCrunch. Financial terms weren’t disclosed. Datapipe raised more than $310 million in venture funding from investors including Goldman Sachs, Caterpillar, CIT Group, and GE Capital.
• Clessidra agreed to sell Acetum, an Italy based maker of balsamic glazes and wine and apple vinegars, to Associated British Foods. Financial terms weren’t disclosed.
FIRMS + FUNDS
• Gridiron Capital promoted Kevin Jackson to senior managing director.
• Matrix Capital Markets Group promoted Vance Saunders to managing director and principal, John J. Underwood to managing director, and Carlton C. Zesch to senior analyst. Martin C. P. McElroy, Jr. and Kyle B. Tipping joined as analysts.
• D.A. Davidson & Co. hired Joe Schimmelpfennig, Jeff Ng and Eric Rindahl as managing directors and Dan Friedman as a director.
• Michael McStay joined McDermott Will & Emery as a partner.