THE CRYSTAL BALL
Happy Friday, Term Sheet readers.
Thank you to everyone who responded to the question: “What’s your top business-related prediction for 2018?” (Yes, even the person whose prediction was that “almost all the predictions will be wrong.”)
To my great dismay, no one made a prediction about when we’ll be driving our Teslas on Mars, but there were still some really good ones for 2018.
Here are the highlights:
CRYPTOCURRENCY: Term Sheet readers predict the crypto-craze will end badly.
• “Bitcoin will blow up in spectacular fashion.” — Frank
• “Tulip mania-style bubble burst for Bitcoin.” — Kenneth
• “Cryptocurrency peak and crash.” — Stewart
• “The BTC price will collapse below $5,000.” — John Graham-Cumming, Cloudflare CTO
• “There is a real likelihood that bitcoin will crash and lose 80% of its value, as it's done in the past, and ordinary citizens will get hurt. I anticipate that the SEC will increase regulation or make ICOs illegal in the future creating issues for startups funded using this method.” — Chris Hughes, vice president at Revolution Growth
And one, lone Bitcoin bull...
• “2018 will be a very important year for Bitcoin, in which a landmark event will occur that will further legitimize the cryptocurrency (likely driven by the policies of large financial institutions). I think you will see Bitcoin’s value stabilize (relatively) as a result of this, and the currency will become an increasingly relevant part of the average consumer’s life, while the use of ICOs and Bitcoin in the corporate world will only continue to increase.” — Gregory
M&A: Readers predict increased consolidation and down rounds.
• “In 2018, companies will continue to give cash back to investors as PE continues to crowd acquisition. De-regulation will drive consolidation and (hopefully) we'll dust off our trusty friend Sherman [Act] to revitalize competition.” — Tom
• “25-40% of the current Unicorns will do an IPO or another round of private fundraising at what is essentially a down round. — Frank
• “In the push towards ubiquitous omni-channel distribution, Amazon will acquire both a big box department store as well a shopping center REIT. WeWork will look to acquire a major, publicly-traded real estate brokerage firm. Sequoia-backed Clutter, the on-demand self-storage company, will acquire on a major traditional self-storage real estate company.” — Brendan Wallace, co-founder & managing partner of Fifth Wall Ventures.
• “A major ad agency buying a management consultancy — up until now it has been the other way around: BCG buying ad agencies.”— Samuel
• “The ‘Great Divestment’ will continue in earnest in 2018, as companies realize that bigger is no longer better. Taking their cue from complexity reduction at GE and others, companies large and small (and even those newly merged) will finally acknowledge that not all revenue is good revenue and will shed business units, product segments and geographies that are lagging.” — Stephen Wilson, co-author of “Growth in the Age of Complexity"
STARTUPS: Readers make predictions on funding levels and (more) crypto-related ventures.
• “2018 will see the continued shift from the lean startup to the heavy startup; companies that from their start will definitely need meaningful investments to dominate their global markets as Uber, WeWork and Airbnb have shown.” — Ben Narasin, venture partner at NEA
• “AgTech investing spiked in 2017 driven primarily by a surge in Series B or later investments. The space has not yet peaked, as early-stage investors who have not yet gotten their slice of the pie target Series A rounds in 2018.” — Ross Baird, president of Village Capital
• The large glut of companies being funded at the seed level and then left without suitor for a Series A round will diminish back to pre-2011 levels.” — Dayna Grayson, partner at NEA
• There will be more cryptocurrency-related startup funding than all other sectors in 2018. — Brendan
VOICE: Readers expect a surge in popularity of voice interfaces.
• “2018 will be the year the voice trend becomes undeniable. As people increasingly trade typing for talking, we’ll see more companies invest in developing for voice interfaces. Most focus on Amazon’s Alexa due to its head-start in the consumer marketplace. And like the first iPhone opened up new possibilities for mobile beyond anyone’s imagination, voice platforms present a similar opportunity for brands. — Gregg Johnson, CEO of Invoca
• “As voice interfaces like Alexa grow in adoption and eat into traditional tap tap computing, we'll see a wealth of tools to help makers create (a la Photoshop), collaborate (a la InVision), and publish (a la Dribbble) audio-based experiences.” — Ryan
• “Voice (Amazon Alexa, Google Home, Apple Homepod, etc) will play a bigger role in discovery, sales and communication.” — Kevin
• "2018 will be the ‘Year of Voice,’ as Alexa, Google Home and Siri not only get much better but reach critical mass. It will be the Wild West for a while, and as marketers begin to build new experiences for these devices, there are things that they must take into consideration like: privacy, divulging personal information, and timing.” — Mike Herrick, SVP of Product & Engineering at Urban Airship
Send more predictions my way at @polina_marinova.
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• Impossible Foods Will Debut Its Plant-Based Burger in Asia in 2018 (by Beth Kowitt)
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• Why Roy Moore Might Not Be Able to Afford a Recount (by Alana Abramson)
2017 is a down year for U.S. take-private buyouts. Elliot preps for potential fight with Hess, seeking CEO Ouster. Pimco goes small to go big. Inside China’s vast new experiment in social ranking. Y Combinator is zeroing in on bigger, breakaway companies with a new growth-stage program.
• Splice, a New York-based music creation and collaboration platform, raised $35 million in a Series B funding. DFJ Growth led the round, and was joined by investors including True Ventures, Union Square Ventures, and Flybridge.
• California Olive Ranch, a Chico, Calif.-based extra virgin olive oil maker, raised $35 million led by new institutional investor and existing investors.
• Paddle, a London-based platform for software sales, raised $12.5 million in funding. Notion led the round and was joined by investors including BGF Ventures, Kindred Capital and MacPaw.
• REVL, a San Francisco-based smart action firm, raised $6 million. Investors included Ruvento, Luma Launch, Bill Tai, James Lindenbaum, Lars Rasmussen and Y Combinator.
• Bay Labs, a San Francisco-based medical technology company, raised $5.5 million in Series A funding. Khosla Ventures led the round and was joined by investors including Data Collective, Greenbox Venture Partners, Minneapolis Heart Institute Ventures and Georges Harik.
• Zeteo Tech, a Sykesville, M.D.-based defense technology firm, raised $2 million in funding. Read more.
• 3TEN8, a San Jose, Calif.-based artificial intelligence firm, raised $2 million in Seed funding. Investors include Social Capital, Citrix and Amr Awadallah.
• Elemeno Health, an Oakland, Calif.-based digital health startup, raised $1.3 million in seed funding. Launchpad Digital Health led the round.
• Villiger, a Los Angeles app maker that helps parents connect, raised an undisclosed amount of seed funding from Mangrove Capital, Nir Zohar, president and COO of Wix, and Stephen Stokols, CEO and co-founder of FreedomPop.
HEALTH AND LIFE SCIENCES DEALS
• Jnana Therapeutics Inc. a Boston, Mass.-based firm focused on cancer, raised $50 million in Series A funding. Polaris Partners led the round.
• Relay Therapeutics, a Cambridge, Mass.-based biotech company, closed $63 million in Series B funding. BVF Partners led the round and was joined by investors including GV, Casdin Capital, EcoR1 Capital, Section 32, Third Rock Ventures and Alexandria Venture Investments.
PRIVATE EQUITY DEALS
• Quantum Energy Partners agreed to invest $489 million in FourPoint Energy, a Denver-based oil exploration and production company.
• Apollo Global Management agreed to acquire Sun Country Airlines, the largest privately-held fully independent airline in the United States.
• Goldman Sachs recapitalized Financeit Canada, a Toronto-based point-of-sale financing provider. Goldman is now a majority owner. Financial terms weren't disclosed.
• Thomas H. Lee Partners agreed to invest in Guaranteed Rate, a Chicago-based retail mortgage company. Financial terms weren't disclosed.
• St. George Logistics, a portfolio company of Wind Point Partners, acquired, Channel Distribution Corp, a Benesville, Ill.-based provider of ocean and air CFS solutions. Financial terms weren't disclosed.
• L Catterton agreed to invest in Ganni, a Danish contemporary fashion brand. Financial terms weren't disclosed.
• Feeney Brothers Utility Services, a portfolio company of CAI private equity, acquired DDS Companies, a Rochester, N.Y.-based provider of telecom services. Financial terms weren't disclosed.
• A consortium backed by private equity firm Hony Capital agreed to purchase the furniture, beauty, and sweaters business of Hong Kong’s Li & Fung for $1.1 billion. Read more.
• iCapital Network acquired the U.S. private equity access fund platform from Deutsche Bank’s Asset Management division. Financial terms weren't disclosed. [This item has been updated.]
• Intertek, a Chicago-based Total Quality Assurance provider to industries worldwide, acquired Acumen Security, a U.S.-based provider of security certification and assurance services. Financial terms weren't disclosed.
• ICF, a Fairfax, Va.-based consulting and digital services provider, acquired The Future Customer, a London-based boutique loyalty strategy and marketing company.
• BK Brasil Operação e Assessoria a Restaurantes, Brazilian operator of Burger King restaurants, priced its IPO at the high end of its range, 18 reais ($5.4), two people with knowledge of the matter told Reuters. Read more.
• Casa Systems, an Andover, Mass.-based software maker for cable providers, raised $78 million in an IPO of 6 million shares at $13 a piece. The company posted revenue of $316.1 million on income of $88.7 million in 2016. Summit Partners (52.1% pre-offering) backs the company. Morgan Stanley and Barclays are joint bookrunners in the deal. The firm plans to list on the Nasdaq as “CASA.”
• Baceline Investments agree to acquire Meadowood Retail Center, a Madison, Wis.-based neighborhood shopping mall, for $3.25 million from MLG Capital.
• Allianz Capital Partners, Macquarie, and the State Pension Fund of Finland agreed to acquire Elenia Oy, a Finnish power grid company, from Goldman Sachs Infrastructure Partners, 3i Infrastructure, and Ilmarinen.
• Andean Tower Partners acquired Torres Unidas, an South American communication towers operator, from sellers including Berkshire Partners. Financial terms weren't disclosed.
• William Blair added a new team covering aerospace, defense and government services to its staff. Managing director Gordie Vap will lead the staff, while vice presidents Andrew Kugajevsky and Josh Ollek will also be at the office.
• PWP Growth Equity hired Daniel H. Leever as an operating partner. Previously, Leever was CEO of Platform Specialty Products Corporation.
• Partners Capital promoted David Shushan and Toby Jollfrom to partner.
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Polina Marinova produces Term Sheet, and Lucinda Shen compiles the IPO news. Send deal announcements to Polina here and IPO news to Lucinda here.