TAKING A HIATUS
Good morning, Term Sheet readers.
FIRM NEWS: Term Sheet has learned that Arena Ventures, the Los Angeles-based early-stage venture capital firm, is pausing seed investing “until the seed market corrects.” Arena managing partner Paige Craig sent out a private letter to LPs laying out concerns about the seed market — overvalued seed companies, excessive capital supply, and imbalanced market forces.
In other words, the seed stage has become increasingly crowded, competitive, and expensive. VCs are raising larger funds, writing bigger checks, and inflating already-inflated startup valuations. Put simply, it’s getting expensive to invest in companies whose seed rounds are really the equivalent of Series A rounds.
It’s unclear if this is the sole reason for the pause or just how long it will last considering that the two principals (Frank Shih and TJ Hennessy) at the four-person firm have left. Shih’s LinkedIn page lists him as a partner at Arc Labs, and Hennessy is said to be looking for a new opportunity.
Asked whether he would be working on something else during the hiatus, Craig said “No, we’re full time on Arena.” The firm will continue to invest in its existing portfolio companies and plans to launch a new fund with a new early stage strategy. (A pivot to crypto perhaps?)
Arena had closed $37 million to invest in software-focused businesses based in Los Angeles, San Francisco, and New York City. Investments ranged from $500,000 to $1 million. Arena’s portfolio includes companies such as ClassPass, Plated, Reserve, and Laurel & Wolf.
I will update this story as we learn more.
CONFIDENCE: Term Sheet has teamed up with Semaphore on its 10th annual confidence survey of private equity and venture capital professionals. In the past, hundreds of you have chimed in with your confidence levels for the year ahead. I encourage you all to take the survey here. The results will be published here early next month. Thanks in advance.
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• MoneyLion, a New York-based digital personal finance platform, raised $42 million in Series B funding. Edison Partners led the round.
• Quartet, a New York-based technology company bridging physical and mental healthcare, raised $40 million in Series C funding. F-Prime Capital Partners and Polaris Partners led the round, and were joined by investors including Oak HC/FT and GV(formerly Google Ventures), and Deerfield Management.
• AImotive, a Mountain View, Calif.-based full-stack autonomous vehicle technology company, raised $38 million in Series C funding. B Capital Group and Prime Ventures led the round, and was joined by investors including Cisco Investments, Samsung Catalyst Fund, and Series A and B investors Robert Bosch Venture Capital, Inventure, Draper Associates and Day One Capital.
• NextCapital, a Chicago, Ill.-based provider of a software solution to manage investment portfolios, raised $30 million in Series C funding. Oak HC/FT led the round. Investors including Manulife Financial, Transamerica Ventures, Vermont Seed Capital Fund and Route 66 Ventures also participated,
• Lovepop, a Boston-based maker of 3D paper pop up greeting cards, raised $12.5 million in funding. Highland Capital Partners led the round, and was joined by investors including Accomplice, Niraj Shah and Bob White.
• CLARA analytics, a Santa Clara, Calif.-based artificial intelligence and data science company, raised $11.5 million in Series A funding. Oak HC/FT led the round.
• Iron Ox, a San Francisco, Calif.-based developer of robots for crop harvesting, raised $3 million in seed funding. Eniac Ventures led the round, and was joined by investors including Amplify Partners.
• Stardog Union, an Arlington, Va.-based provider of enterprise knowledge graph technology, raised an additional $3 million in funding. Tenfore Holdings led the round.
• Dahmakan, a Malaysia-based food delivery startup, raised $2.6 million in funding, according to TechCrunch. Investors include Y Combinator, Texas Atlantic Capital, and Atami Capital.
HEALTH AND LIFE SCIENCES DEALS
• BioNTech, a Germany-based developer of immunological medicines, raised $270 million in funding, according to Reuters. Investors include Redmile Group, Janus Henderson Investors, Invus, and Fidelity. Read more.
• Scholar Rock, a Cambridge, Mass.-based biotechnology company, raised $47 million in Series C funding. Invus led the round, and was joined by investors including Redmile Group, Polaris Partners, Timothy Springer, ARCH Venture Partners, EcoR1 Capital, The Kraft Group, Fidelity Management and Research Company and Cormorant Asset Management.
• DNAnexus Inc, a Mountain View, Calif.-based provider of biomedical informatics and data management, raised $58 million in funding. Foresite Capital led the round, and was joined by investors including Microsoft, GV, TPG Biotech, WuXi NextCODE, Claremont Creek Ventures and MidCap Financial.
PRIVATE EQUITY DEALS
• Kellermeyer Bergensons Services LLC, a portfolio company of GI Partners, acquired Empire Services, a New Orleans-based commercial facility maintenance company. Financial terms weren't disclosed.
• Graham Partners acquired OptConnect LLC, a Utah-based provider of wireless connectivity solutions for unattended equipment including wireless ATMs, self-service kiosks, micro-markets and digital signage. Financial terms weren't disclosed.
• NovaQuest Capital Management agreed to acquire drug developer Viamet Pharmaceuticals, a Durham, N.C.-based developer of novel antifungal agents. Financial terms weren't disclosed.
• King Engineering, which is backed by ETC Partners, acquired Criser Troutman Tanner Consulting Engineers, a North Carolina-based engineering firm. Financial terms weren't disclosed.
• PumpMan Holdings LLC, a portfolio company of Soundcore Capital Partners, acquired Federal Pumps, a Brookyn, N.Y.-based service provider for commercial, industrial, and municipal pump systems. Financial terms weren't disclosed.
• Calero Software, a portfolio company of Riverside Partners, acquired Comview Corporation, a Huntington Station, N.Y.-based specialty telecom expense management, call accounting and usage management software and services provider. Financial terms weren't disclosed.
• Northlane Capital Partners made an investment in SmartWave Technologies Corp, a maker of electronic and electromechanical systems. Financial terms weren't disclosed.
• Centre Lane Partners LLC acquired Alternative Biomedical Solutions LLC, a Dallas, Texas-based supplier of toxicology and chemistry measurement systems. Financial terms weren’t disclosed.
• J.W. Childs Associates LP acquired a majority of Honors Holdings LLC, a franchisee of Orangetheory Fitness. Financial terms weren’t disclosed.
• Midwest Wholesale Hardware, a portfolio company of High Road Capital Partners, acquired the assets of Strauss Lock Distributors, a Charlotte, N.C.-based door hardware company.
• Continental and Bosch will buy 5% stakes each in digital mapping firm HERE, according to Reuters. Financial terms weren't disclosed. Read more.
• Optiv, a Denver, Colo.-based cybersecurity services firm, withdrew its plans for an initial public offering of $200 million. KKR acquired a majority stake in the company in December.
• Central Puerto, a Buenos Aires, Argentina-based power company, filed for a $100 million IPO. BofA Merrill Lynch, J.P. Morgan and Morgan Stanley are joint bookrunners in the deal. The company plans to list on the NYSE as “CEPU.”
• Spotify, a London-based music streaming service, reportedly filed confidentially for an IPO, Axios reports citing sources. Goldman Sachs, Morgan Stanley, and Allen & Co. are said to be part of the process. Read more.
• Dalian Wanda, a Chinese internet giant, is reportedly considering an IPO of its sports assets in Hong Kong, Reuters reports citing sources. Citic Securities is said to be part of the process. Read more.
• Frontenac agreed to sell A.H. Harris Construction Supplies, a West Hartford, Conn.-based provider of specialty construction products, to HD Supply Holdings Inc. Financial terms weren't disclosed.
• Baird Capital sold RaySpec, a U.K.-based manufacturer of sensor and detector devices, to Polatechno Co. Financial terms weren’t disclosed.
• Shore Capital Partners sold the Stepping Stones Group, a Lafayette, Colo.-based provider of therapeutic behavioral health services, to Five Arrows Capital Partners. Financial terms weren’t disclosed. Shore Capital will retain a minority stake.
FIRMS + FUNDS
• LightBay Capital, a Los Angeles-based private equity firm, raised $615 million for its debut fund, Investment Partners LP.
• Corrum Capital Management, a Charlotte, N.C.-based investment firm, raised $250 million for Corrum Capital Aviation Partners, LP.
• BoxGroup promoted Nimi Katragadda to partner at BoxGroup.
• Kyle Rasbach joined Pappas Capital as a partner.
• OpenGate Capital promoted Aaron Figura to senior vice president.