Term Sheet — Monday, September 25
ELON MUSK STRIKES AGAIN
Good morning, Term Sheet readers.
ELECTRIC BURNS: What better way to start your morning than with a fresh Elon Musk jab? Over the weekend, Mercedes-Benz announced it plans to invest $1 billion in Alabama to produce electric vehicles. The investment will go toward expansion of its existing plant as well as toward building a new 1-million-square-foot battery factory. The move positions the luxury brand for a head-to-head face off with Tesla. A Sanford Bernstein analyst told investors that Mercedes is convinced it can match Tesla battery costs and ramp up production faster. To which Tesla CEO Elon Musk responded, “That's not a lot of money for a giant like Daimler/Mercedes. Wish they'd do more. Off by a zero.” 🔥
UBER’S SOFT SIDE: Across the ocean, Uber began its morning with an apology to British regulators after the ride-hailing startup lost its London license. “It‘s...true that we’ve got things wrong along the way. On behalf of everyone at Uber globally, I apologise for the mistakes we’ve made,” CEO Dara Khosrowshahi wrote in an open letter. “We will appeal the decision on behalf of millions of Londoners, but we do so with the knowledge that we must also change.” This conciliatory tone, which sits in sharp contrast to ex-CEO Travis Kalanick’s ruthless style, is definitely a new approach for the company.
Why the pleading? London reportedly accounts for about 5% of Uber’s user base. Losing the city could threaten the company’s chances of getting closer to profitability. As Fortune’s David Z. Morris writes:
"Khosrowshahi got the CEO nod in part because he isn’t Kalanick, and repairing the company's reputation is his broadest mandate. Now his softer approach will be put to the test – though the company is also diving back into the Kalanick-era playbook, including by marshalling public pressure on regulators.”
THE MEN OF SILICON VALLEY: A New York Times article details the uprising of men’s rights advocates as part of a “backlash against the women in technology” movement. The story goes on to quote Jon Parsons, a lawyer representing two men who sued Yahoo for gender discrimination last year. He says:
"No eyebrows are going to rise if a woman heads up fashion. But we're talking about women staffing positions — things like autos — where it cannot be explained other than manipulation."
(Note: General Motors CEO Mary Barra ranked as No. 1 on Fortune’s Most Powerful Women list for the third year in a row.) I’ve been thinking about this a lot lately, especially after I attended an event for Ellen Pao’s book launch hosted by startup Managed by Q last Wednesday. Speaking about her experiences in the VC world, Pao said she is heartened to see women and men addressing the gender discrimination they see in the industry:
“That has changed how people perceive the subsequent stories. I hope the press does not forget this moment in time where people are actually open to hearing these stories & believing the people telling them. And I hope they don’t forget that we need huge dramatic change in the tech industry.”
Here’s what I struggle with: While it’s true that more people are speaking against sexism in Silicon Valley -- like high-profile entrepreneurs like ex-Twitter CEO Dick Costolo -- the New York Times article is a reminder that a “fringe element of men” remain actively against change. What would happen if the men quoted in the article sat down for a conversation with people like Pao, who are fighting for a more inclusive Silicon Valley? That’s a panel I would gladly moderate.
*NEW SERIES*: After getting a lot of feedback from Term Sheet readers, I’ve decided to start a new weekly series, called “5 Questions With a Dealmaker.” The Q&A will feature a different investor each Wednesday, and the first one launches with Bessemer Venture Partners’ Byron Deeter. We talk about everything from what he looks for in an investment to his thoughts on the blockchain to his biggest regret (passing on Tesla in 2006). Let me know who you’d like to see featured, and I’ll try to make it happen.
THE LATEST FROM FORTUNE...
• Futurist Ray Kurzweil isn’t worried about technology stealing your job (by Michal Lev-Ram)
• Here’s what happened the last time Donald Trump fought the NFL (by David Z. Morris)
• What it was like to be on the court at the Battle of the Sexes (by Kathleen Kemper)
• How to invest in whiskey (by Laura Entis)
• DispatchHealth, a Denver, Colo.-based on-demand healthcare services provider, raised $30.8 million in funding. Alta Partners and Questa Capital led the round.
• Yi+, a Beijing-based artificial intelligence startup, raised $15 million in Series B funding. Haitong Securities led the round, and was joined by investors including BRJ Group and the Bank of Beijing.
• ViralGains, a Boston-based video ad journey platform for marketers, raised $10 million in Series B funding. First Analysis led the round.
• Synthace, a U.K.-based bioengineering startup, raised £7.3 million ($9.8 million) in Series A funding. Investors include White Cloud Capital, Amadeus Capital Partners, Eleven Two Capital, Sofinnova Partners, SOSV and Bioeconomy Capital. Read more.
• FEops, a Belgium-based personalized computer modeling solutions provider for structural heart interventions, raised 6 million euros ($7.1 million) in funding. Valiance led the round, and was joined by investors including Capricorn and PMV.
• Synup, an India-based startup that helps marketers monitor where their brands are mentioned online, raised $6 million in Series A funding, according to TechCrunch. Vertex Ventures led the round, and was joined by investors including Prime Venture Partners. Read more.
• Inkitt, a Germany-based online platform for authors, raised $3.9 million in pre-series A funding,according to TechCrunch. Redalpine led the round, and was joined by investors including Frontline Ventures and Speedinvest. Read more.
• Analytical Space, a Cambridge, Mass.-based satellite communications services company, raised $3.5 million in seed funding. The Engine and Space Angels led the round, and were joined by investors including NXT Ventures, Flybridge Capital Partners, Shasta Ventures, Yard Ventures, Dream Incubator, and Dorm Room Fund.
• TandemHR, a Dublin-based startup that helps organizations reshape how employee performance is measured and managed, raised €2 million ($2.4 million) in seed funding. Frontline Ventures led the round, and was joined by ACT Venture Capital and Enterprise Ireland.
HEALTH AND LIFE SCIENCES DEALS
• SpringWorks Therapeutics, a company developing potential new treatments for underserved patient communities, raised $103 million in Series A funding. Investors include Bain Capital Life Sciences, Bain Capital Double Impact, OrbiMed, Pfizer, and LifeArc.
• IsoPlexis Corporation, a Branford, Conn.-based life science company, raised $13.5 million in Series B funding. Spring Mountain Capital led the round, and was joined by investors including Connecticut Innovations, North Sound Ventures, and Ironwood Capital.
PRIVATE EQUITY DEALS
• CareCentrix Inc, a Hartford, Conn.-based health benefits manager majority owned by Summit Partners, is exploring a sale that could value it at around $1 billion, including debt, according to Reuters. Read more.
• Base Logistics Group, which is backed by Waterland Private Equity Investments, acquired Healthlink Europe & International, a Netherlands-based logistics outsourcing partner for life science manufacturing companies. Financial terms weren’t disclosed.
• Ogdon Ventures acquired Westland Distributing Inc, a Confier, Colo.-based provider of manufactured housing supplies. Financial terms weren’t disclosed.
• Inflexion Private Equity acquired Xtrac, a U.K.-based designer and manufacturer of transmission systems for motorsport. Financial terms weren’t disclosed.
• Blue Wolf Capital Partners LLC made an investment of an undisclosed amount in StateServ Holdings, a provider of durable medical equipment management solutions. Financial terms weren’t disclosed.
• ABB will buy General Electric’s (NYSE:GE) industrial solutions business for $2.6 billion, according to Reuters. Read more.
• Lufthansa is reportedly bidding 200 million euros ($239 million) to buy assets from Air Berlin (XTRA:AB1) plus 100 million euros ($118 million) to meet operating costs, according to Reuters. Read more.
• Sea Ltd., a Singapore-based entertainment company, filed for an IPO of $1 billion with the SEC. The company posted revenue of $345.7 million and loss of $224.9 million in 2016. The company is backed by Tencent (39.7%) and Blue Dolphins Venture (14.7%). Goldman Sachs, Morgan Stanley, and Credit Suisse are bookrunners in the deal. It plans to list on the NYSE as “SE.”
• Sentinel Energy Services, a SPAC based out of Houston, Texas, filed for an IPO of $300 million. The company plans to sell 30 million shares at $10, and plans to buy up underperforming energy services companies. Krishna Shivram, who worked at oilfield services provider Schlumberger for 25 years, is CEO of the company. Goldman Sachs and Citi are bookrunners in the deal. The company plans to list on the Nasdaq as “STNL.”
• RISE Education, a Beijing-based education company providing English lessons, filed for an IPO of $100 million Friday. The company posted revenue of $104.9 million and earnings on $7.5 million in 2016. Bain Capital backs the company. Morgan Stanley and Credit Suisse are joint underwriters in the deal. It plans to list on the Nasdaq as “REDU.”
• Unilever agreed to buy Carver Korea, a South Korea-based cosmetics firm, for 2.27 billion euros ($2.71 billion) from Goldman Sachs, Bain Capital and the company’s founder, according to Reuters. Read more.
• SAP acquired Gigya, a Mountain View, Calif.-based customer identity management platform, for $350 million. Gigya had raised approximately $105 million in venture funding from investors including Benchmark, First Round Capital, DAG Ventures, and Intel Capital. Read more at Fortune.
• Generali Global Assistance acquired CareLinx, a San Bruno, Calif.-based tech-enabled caregiver marketplace. Financial terms weren't disclosed. CareLinx raised $5 million in venture funding from investors including Generator Ventures, Green D Ventures, StartUp Health, and Ziegler.
• Viviana Faga joined Emergence Capital as an operating partner.
• Arsenal Capital Partners named Patricia Grad as a senior managing director and head of investor relations.