Good morning from San Francisco, Term Sheet readers.
I arrived yesterday, and it’s very clear the Bird electric scooter trend has exploded in popularity. People are riding them, hiding them, and tying them places. The company recently raised $100 million in Series B at a valuation of $300 million and snagged Arena Ventures founder Paige Craig as its head of city operations. But the company is operating in a legal gray zone.
Bird is already hitting some regulatory challenges as it hopes to expand across 50 U.S. markets by the end of 2018. In February, it had to pay $300,000 in fines for obscuring the public right of way (undocked Bird scooters were left lying across a sidewalk, blocking a doorway, or driveway) and operating without a proper commercial business license. And now, San Francisco is looking to create legislation to regulate electric scooter sharing.
Tusk Ventures is an investor in Bird, and Bradley Tusk recently told me that the bike and scooter sharing trend “could very well be the source of a lot of fights in the most number of jurisdictions in 2018.” This is one to watch.
ALIBABA STRIKES: Alibaba is buying full control of China’s biggest online delivery services startup Ele.me in a $9.5 billion deal. Alibaba and affiliate Ant Small and Micro Financial Services Group already owned about 43% of the startup. Alibaba paid all cash in the deal and has acquired all the shares formerly held by Baidu.
Last year, Ele.me’s CEO Zhang Xuhao spoke on a panel at Fortune’s Global Forum in Guangzhou, China. At the time, Xuhao said, “If you’re a winner in China, that means you can be a winner in the world.” (China is home to 730 million Internet users, it accounts for 40% of global retail e-commerce, and its mobile payment market is a whopping 11 times the size of the U.S. market.)
Ele.me holds 55% of market share in the country, while its main competitor, Meituan Waimai comes in second with 41%. Here’s where it gets complicated: Alibaba was one of the original backers of Meituan before offloading its assets to focus on Ele.me.
“As you expand in China, relationships become very complicated,” Xuhao said at the forum. “Sometimes [our rivals] are our friends, and sometimes they are our enemies. The competition is so fierce.”
HOUSEKEEPING: As a reminder, please send deals to my colleague Lucinda this week. She’s at firstname.lastname@example.org.
THE LATEST FROM FORTUNE…
• SoulCycle Is Testing Non-Cycling Classes (by Leigh Gallagher)
• Autopilot Was Active in Fatal Model X Crash (by David Morris)
• Over 5 Million Hit in Saks Fifth Avenue, Lord and Taylor Breach (by Jennifer Calfas)
• Cloudflare Announces a Faster, More Private Internet Directory (by David Z. Morris)
Kim Jong-un watches K-Pop stars. Russian billionaire with ties to Uber, Virgin Hyperloop One arrested on embezzlement charges. Mark Patricof to launch advising firm for athletes, coaches, and team executives. Netflix in advanced talks to buy EuropaCorp. China hits back with tariffs on 128 U.S. products. SoftBank launches $930 million Indian joint solar energy venture.
• Nift Network, a Cambridge, Mass.-based invite-only network for neighborhood businesses to promote themselves, raised $16.5 million in Series A funding. Investors include Spark Capital, Foundry Group, and Accomplice.
• Cobalt Robotics, a Palo Alto, Calif.-based indoor security robotics maker, raised $13 million in Series A funding. Sequoia led the round and was joined by investors including Founders Fund, Storm Ventures, Promus Ventures, and Bloomberg Beta.
• Spotted, a Boston-based celebrity data platform, raised $4 million in Series A funding. Schooner Capital led the round.
• Wild Type, a San Francisco-based meat culturing startup, raised $3.5 million in seed funding. Spark Capital led the round, and was joined by investors including Root Ventures and Mission Bay Capital. Read more.
• SWIR Vision Systems Inc., a Durham, N.C.-based camera maker, raised $1 million, according to an SEC filing.
• Deepgram, a Mountainview, Calif.-based speech analytics startup, secured funding from NVIDIA GPU Ventures. Financial terms weren’t disclosed.
PRIVATE EQUITY DEALS
• Superion, a portfolio company of Vista Equity Partners, acquired Public Safety Corporation, a Waldorf, M.D.-based provider of false alarm tracking. Financial terms weren’t disclosed.
• Alliance Source Testing, a portfolio company of Align Capital Partners, acquired Air Pollution Testing, a source emission testing firm with offices in Denver, Salt Lake City, and Anchorage. Financial terms weren’t disclosed.
• SK Lubricants, the South Korean firm, is planning an IPO of up to 1.56 trillion won ($1.48 billion) in May. Read more.
• Headhunter Group, a Cyprus-based recruitment platform in Russia, filed for an IPO of up to $250 million. The firm posted revenue of $82 million in 2017. Highworld Investments (60% pre-offering) and ELQ Investors (40% pre-offering) back the firm. Morgan Stanley, Goldman Sachs, Credit Suisse are underwriters in the deal. The firm plans to list on the Nasdaq as “HHR.” Read more.
• Nlight, a Vancouver, Wash.-based semiconductor and fiber laser maker, filed for an IPO of up to $86.3 million. The firm posted revenue of $138.6 million in 2017, and income of $1.8 million. Greenover Group (5.8% pre-offering), Wellington Management (12.1%), Menlo Ventures (21.5%), Mohr, Davidow Ventures (18.9%), and Oak Investment Partners (20%) back the firm. Stifel and Raymond James are lead underwriters in the deal. Nlight plans to list on the Nasdaq as “LASR.”
• Alzheon, a Framingham, Mass.-based biopharmaceutical firm developing Alzheimer’s disease, said it plans to raise $70 million in an offering of 5 million shares priced between $13 to $15 a piece. The firm posted loss of $5.5 million in 2017. Ally Bridge Group (17.5%) and Aptus Holdings (5.2%) back the firm. Citigroup and Piper Jaffray are joint bookrunners in the deal. The firm plans to list on the Nasdaq as “”ALZH.” Read more.
• Mapi-Pharma, a Ness Ziona, Israel-based biopharm firm, withdrew its $50 million IPO. The firm first filed in 2014. Read more.
• Virgin Hotels, along with an investor group led by Juniper Capital Partners, agreed to acquire Hard Rock Hotel & Casino, a Las Vegas-based hotel, from Brookfield Asset Management. Financial terms weren’t disclosed.
• Frontenac agreed to acquire controlling stakes in TPC Training and Jade Learning, a Chicago-based and a Raleigh, N.C.-based technical training firm, from Renovus Capital Partners. Financial terms weren’t disclosed.
• Kohlberg & Co. agreed to acquire U.S. Retirement & Benefits Partners, an Iselin, N.J.-based provider of benefits and retirement services, to Centre Partners, financial terms weren’t disclosed.
FIRMS + FUNDS
• PAI Partners, a pan-European private equity firm, raised 5 billion euro ($6.2 billion) for its PAI Europe VII fund.
• Unitus Seed Fund, a Seattle-based venture firm focused on India, raised $12.9 million for its second seed fund, according to an SEC filing.
• AngelPad, the San Francisco-based venture capital incubator, raised $35 million toward its $50 million third venture fund, according to an SEC filing.
• Emmanuel Jaclot was named executive vice president of infrastructure at Caisse de dépôt et placement du Québec, a portfolio, with over $16 billion in assets.
• David Duke was named a managing director at Kian Capital. Previously, Duke was director of business development at Edgewater Capital Partners.