Term Sheet — Wednesday, September 20
THE ROBOTS ARE COMING
Good morning, Term Sheet readers.
SOFTBANK GETS SMART: We’re almost through September, and SoftBank has yet to take its foot off the gas when it comes to making monster investments from its $93 billion Vision Fund. The tech conglomerate has backed companies including Slack, WeWork, OYO, and Fanatics just in the last two months. As Fortune’s Adam Lashinsky notes in Data Sheet, the fund is a “strange beast” whose size makes it difficult to read:
It is so massive—its investors range from a Saudi sovereign wealth fund to Apple—that small stakes are impossible and large stakes will be tough to grow. The Vision Fund’s impact is so huge that the VC industry is spending much of its time figuring out what Son is up to.
Yesterday, things took a bizarre turn when SoftBank founder and CEO Masayoshi Son provided a glimpse into what he’s “up to.” During his speech at the Appeal of Conscience Foundation, Son mentioned the Vision Fund, saying, “What is my belief and vision for this investment? I have only one belief — Singularity.”
He brought up singularity (i.e. the hypothetical moment in time when artificial intelligence surpasses human intelligence) to make the point that “smart robots” will replace most blue collar jobs.The fund is already taking an active role in that development: SoftBank recently poured $114 million in Brain Corp, a San Diego-based startup that believes “tomorrow’s robots will be intelligent autonomous machines that will take care of us.”
It will be interesting to see how Son’s belief in the Singularity guides future investments. AI is an fascinating space to watch and SoftBank could pretty much single-handedly fund the AI revolution.
TROUBLE IN TOYLAND: Toys ‘R’ Us filed for Chapter 11 bankruptcy yesterday, revealing a few disturbing details, including how the retailer lost money in each quarter for the last few years except during the holiday season. That tells you all that you need to know about the state of retail right now.
Fortune’s Lucinda Shen dug in and found yet another reason the Toys ‘R’ Us bankruptcy is a big deal (literally): It’s one of the largest retail bankruptcies of all-time, outranked only by filings from Kmart in 2002 and Federated Department Stores in 1990.
THE LATEST FROM FORTUNE...
• Judge says customers can sue over face scans (by Jeff John Roberts)
• Why top VCs are suing Donald Trump (by Kirsten Korosec)
• Before the ‘Battle of the Sexes,’ I was bested by Bobby Riggs (by Shawn Tully)
• Bitcoin price hits $4,000 even as Ray Dalio calls it a ‘bubble’ (by Lucinda Shen)
• The 7 best books of the year so far (by Andrew Nusca)
A new golden age for American workers? How Toys ‘R’ Us collapsed so quickly. The Fed’s great unwinding. A startup that helps navigate the immigration labyrinth. Bill & Melinda Gates grade the world’s health.
• Gogoro, a Taiwan-based electric scooter maker, raised $300 million in Series C funding. Investors include Temasek, Generation Investment Management, Sumitomo Corporation, and ENGIE.
• The Zebra, an Austin, Texas-based auto insurance comparison marketplace, raised $40 million in Series B funding. Accel Partners led the round.
• Power2SME, an India-based group buying site that provides inks, steel, polymers, paints and chemicals for small and medium businesses, raised $36 million in Series E funding. Investors include Inventus Capital Partners, Accel, Kalaari Capital, Nandan Nilekani and IFC.
• TigerGraph, a Redwood City, Calif.-based real-time graph analytics platform, raised $31 million in Series A funding. Investors include Qiming VC, Baidu, Ant Financial, AME Cloud, Morado Ventures, Zod Nazem, Danhua Capital and DCVC.
• CarLotz, a Richmond, Va.-based used vehicle consignment business, raised $30 million in funding, from TRP Capital Partners.
• Securonix, a Los Angeles-based provider of big data security analytics, raised $29 million in Series A funding. Volition Capital led the round, and was joined by investors including Eight Roads Ventures.
• Aqua Security, an Israel-based container security platform provider, raised $25 million in Series B funding. Lightspeed Venture Partners led the round, and was joined by investors including Microsoft Ventures, TLV Ventures and Shlomo Kramer.
• Minio, a Palo Alto, Calif.-based provider of open source object storage for cloud-native and containerized applications, raised $20 million in Series A funding. Dell Technologies Capital, General Catalyst Partners and Nexus Venture Partners led the round, and was joined by investors including Intel Capital, AME Cloud and Steve Singh.
• TenFour, a Morristown, New Jersey-based IT infrastructure firm, raised $18 million in funding. NewSpring was the lead investor.
• Sp0n, a developer of a crime tracking app, raised $12 million in Series A funding. Sequoia Capital led the round.
• Le Collectionist, a Paris-based luxury villa rental provider, raised $10 million in funding. Red River West led the round, and was joined by investors including Partech Ventures and XAnge.
• 8fit, a Berlin-based health and fitness company, raised $10 million in Series A funding. Creandum and Eight Roads Ventures led the round.
• DSP Concepts Inc, a Santa Clara, Calif.-based provider of embedded audio digital signal processing solutions, raised $10 million in Series A funding. BMW i Ventures led the round, and was joined by investors including Walden International Ventures and David Tsang.
• Matroid, a Palo Alto, Calif.-based computer vision company, raised $10 million in Series A funding. New Enterprise Associates and Intel Capital led the round.
• Synthace, a London-based developer of the Antha operating system for biology, raised $9.6 million in Series A funding. Investors include White Cloud Capital, Amadeus Capital Partners, Eleven Two Capital, Sofinnova Partners, SOSV and Bioeconomy Capital.
• ClearMetal, a San Francisco-based predictive logistics company, raised $9 million in Series A funding. Prelude Ventures and Innovation Endeavors co-led the round, and were joined by investors including NEA, SAP.iO, PSA unboXed, DCLI and the founder of GT Nexus.
• Augmedics, an Israel-based developer of an augmented-reality surgical visualization system, raised $8.3 million in Series A funding. Investors include AO Invest, Israeli Innovation Authority and Terra Venture Partners.
• AlphaFlow, a San Francisco-based automated alternative investment platform for real estate, raised $4.1 million in seed funding. Resolute Ventures and Point72 Ventures led the round, and were joined by investors including Upside Partnership, Social Capital, Y Combinator, Clocktower Technology Ventures, and Red Swan Ventures.
• Front Range Biosciences, a Boulder, Colo.-based agricultural biotech company, raised $3 million in bridge funding. Investors include Phyto Partners, Salveo Capital, Sand Hill Angels, HBS Angels of NYC, NY Angels, Halley Venture Partners, Anthill Ventures, and Canopy Boulder.
• Wevo, a Boston-based artificial intelligence and crowdsourcing technology startup, raised $1.6 million in seed funding. Investors include Will Graylin Frank Moss, Tom Rutledge, and Udi Mokady.
• The Moms Co, an India-based mom and baby care consumer goods startup, raised $1 million in Series A funding. DSG Consumer Partners and Saama Capital led the round.
• Shortlist, an India-based employment tech startup, raised $1 million in seed funding. Investors include University Ventures, Samir Shah of Sattva Capital, Zephyr Acorn, FARM Ventures, and Bodley Group.
• Telcoin, a Singapore-based cryptocurrency startup, raised funding of an undisclosed amount from Batara Eto.
HEALTH AND LIFE SCIENCES DEALS
• Rodin Therapeutics, a Cambridge, Mass.-based biotech company, raised $27 million in financing. Investors include Atlas Venture, GV, Hatteras Venture Partners, Remeditex Ventures and Third Point Ventures.
• Enlivex Therapeutics Ltd, an Israel-based clinical stage immunotherapy company, raised $8 million in funding. Investors include Korea Investment Partners and Hadasit Bio Holdings Ltd.
PRIVATE EQUITY DEALS
• The Hilb Group, a portfolio company of ABRY Partners, acquired Mid-State Insurance Agency Inc, a Worcester, Mass.-based provider of property and casualty insurance and employee benefits. Financial terms weren’t disclosed.
• Covercraft, a portfolio company of Century Park Capital Partners, will buy GT Covers, a Aurora, Colorado-based maker of vehicle seat covers. Financial terms weren’t disclosed.
• T-Mobile US Inc is exploring a takeover of Sprint Corp (NYSE:S) in an all-stock deal, according to Reuters. Sprint has a market value of about $34 billion.
• Toshiba Corp (TSE:6502) agreed to sell its prized semiconductor business to a group led by U.S. private equity firm Bain Capital LP. The deal is worth about 2 trillion yen ($18 billion), according to Reuters. Read more.
• Fortum (HLSE:FORTUM) is in advanced talks to buy German utility E.ON’s (DB:EOAN) 46.7% stake in nuclear and fossil energy group Uniper (XTRA:UN01) for 3.76 billion euros ($4.51 billion), according to Reuters. Read more.
• HubSpot acquired Motion AI, a Naperville, Ill.-based visual chatbot builders. Financial terms weren’t disclosed.
• The Meet Group will acquire Lovoo, a Germany-based dating app, for $70 million in cash, inclusive of a $5 million contingent earnout.
• PQ Group Holding,, a Malvern, Penn.-based chemicals maker, said it plans to raise $638 million in an offering of 29 million shares between $21 to $23 a piece. PQ Group Holdings posted loss of $79.7 million on sales of $1.1 billion in 2016. The company is largely backed by CCMP Capital Advisors and INEOS Investment Partnership. Morgan Stanley and Goldman Sachs are underwriters in the deal. PQ plans to list on the NYSE as “PQG.” Exact terms of the deal have yet to be disclosed.
• Despegar.com, a Latin American online travel agency, said it had priced its IPO at $26 per share, the high end of its range. The company plans to offer about 12.8 million shares (32% insiders), raising $332.8 million at the offerings midpoint. The company says it raised $411.2 million in revenue and $35.1 million in earnings in 2016.Tiger Global(57.3% pre-offering), Expedia(16.4%), and General Atlantic Partners (5.4%) back the company. Morgan Stanley and Citi are joint bookrunners in the deal. It plans to list on the NYSE as “DESP.”
• Celcuity, an early stage biotech based out of Minneapolis, Minn., priced its IPO at $9.50 a share, at the midpoint of its range. The company raised $22.8 million in an offering of 2.4 million shares.. In 2016, the company posted loss of $3.3 million, and has yet to post a profit. Globe Resources Group backs the company, as does David Dalvey of Brightstone Venture Capital. Craig-Hallum Capital Group has been named underwriter in the deal. Celcuity plans to list on the Nasdaq as “CELC.”
• Krystal Biotech, a Pittsburgh, Penn.-based therapy company focused on dermatological diseases, priced its IPO at midpoint or $10 a share. The company raised $40 million in an offering of 3.96 million shares. In 2016, Krystal posted loss of $1.2 million. The company has yet to post a revenue. The company is backed by biotech investor Krish Krishnan (34.1% pre-offering), Suma Krishnan (34.1%), and Sun Pharma (16.5%). Ladenburg Thalmann & Co. is sole bookrunner in the deal. The company plans to list as “KRYS” on the Nasdaq.
• Lion Equity Partners acquired Vivabox, a Gaithersburg, Md.-based provider of products and services for the sample and subscription box industry. The seller was Sodexo. Financial terms weren’t disclosed.
• EQT Mid Market agreed to sell BackWerk, a Germany-based bakery operator, to Valora Group. The value of the deal was about 190 million euros ($228 million).
• J.F. Lehman & Company sold Doss Aviation, a Colorado Springs, Colo.-based flight training provider, to L3 Technologies Inc. Financial terms weren’t disclosed.
FIRMS + FUNDS
• Frontier Energy Services, which is backed by Energy Spectrum Capital, formed Frontier Midstream Solutions IV. Financial terms weren’t disclosed.
• Kris Fredrickson left his role as principal at Benchmark to join Coatue Management, according to Recode.
• Hatteras Venture Partners named Andrew Witty a venture partner.
• Holly Maloney McConnell joined General Catalyst as a managing director.
• Melissa Wasser joined Financial Technology Partners as a director & head of private capital markets.
• Mathew Feldman joined The Carlyle Group as a managing director on its credit opportunities team.