MEGA-MONEY
Happy Friday, Term Sheet readers.
MONSTER FUND: More details have emerged on Sequoia Capital’s new mega-fund. So far, investors have committed approximately $6 billion to the firm’s third global fund, according to the WSJ. Most of the capital thus far has been raised from new investors, and Sequoia is expected to turn to existing investors next. The WSJ reports that the firm could expect as much as $2 billion for the new fund.
With Sequoia Global Growth Fund III, the firm aims to buck the hot venture market trend of aggressive management fees set by managers of some megafunds. Rather than charging 2% of the fund’s total capital commitment, Sequoia has told investors the management fee will be 1% based only on the smaller stages of “called capital” drawn from the investors, one of the people said.
As we’ve noted before, VC firms are raising larger and larger funds, pumping capital into venture-backed companies at the various stages, and likely inflating already-inflated tech valuations.
MONSTER FUNDING: VIPKid, a China-based company that links North American tutors with Chinese children, is nearing a deal to raise about $500 million in funding at a valuation of more than $3 billion, according to Bloomberg. This deal could make it the world’s largest online education startup. Tutoring services are becoming a big business in China thanks to a growing middle-class and a job market that values English-language proficiency.
I first noticed this trend when I spoke with GGV Capital managing partner Hans Tung in December. He told me that he expects more education companies to get funded in 2018. “Consumers have a huge demand for better service yet the quality and the spread of teachers is very uneven in China,” Tung said. “So through distance learning and mobile Internet, that problem will be solved over time.”
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VENTURE DEALS
• Dosh, an Austin, Texas-based cash reward platform, raised $44 million in Series A funding at a $240 million valuation. Investors include Goodwater Capital, and PayPal.
• Traackr, a San Francisco-based influencer relationship management platform, raised $9 million in Series B funding. Workhorse Capital led the round, and was joined by investors including You & Mr Jones.
• Wellness Lifestyles, a Canada-based owner and operator of primary healthcare facilities and wellness centers, raised $7 million in funding. Horizons Ventures led the round.
• TradeDepot, a Nigeria-based SaaS platform for FMCG distribution in Africa. Partech Ventures led the round.
HEALTH AND LIFE SCIENCES DEALS
• Innovent Biologics, a China-based biotech company, raised $90 million in Series E funding. Investors include Capital Group Private Markets, Cormorant Asset Management, Rock Springs Capital, Ally Bridge Group, Temasek, Hillhouse, Legend Capital, Lilly Asia Venture and Taikang Insurance.
PRIVATE EQUITY DEALS
• Victory Park Capital invested $45 million in United Automobile Holdings, a Miami Gardens-based provider of low-cost insurance products to the non-standard automobile insurance market.
• Gainline Capital Partners made an investment in Integrated Energy Services Corporation, a provider of grid relationship management software and demand response services to commercial electricity customers. Financial terms weren't disclosed.
• GALA Kerzen, which is backed by Equistone Partners Europe, acquired Korona Candles S.A, a Poland-based manufacturer of “private label” candle products. Financial terms weren't disclosed.
OTHER DEALS
• Teradyne acquired MiR, a Denmark-based robotics company, for $148 million, with $124 million on the table after meeting performance goals.
• NICE (NASDAQ: NICE) agreed to acquire Mattersight, a Chicago-based provider of cloud-based analytics for customer service organizations for $2.70 per share.
IPOs
• Ping An Good Doctor, the online healthcare platform, raised $1.12 billion in an IPO at the top end of its range. Read more.
• Origin Bancorp, a Ruston La.-based financial firm, plans to raise $123.8 million in an IPO of 3.64 million shares priced between $33 to $34. Pine Brook Road Associates (9.24% pre-offering) and Castle Creek Capital (8.31%) back the firm.Stephens, Raymond James, Sandler O’Neill, and Keefe Bruyette & Woods are underwriters in the deal. Read more.
• Baycom Corp, a Walnut Creek, Calif.-based banking firm, plans to raise $50 million in an IPO of 2.27 million shares priced between $21 to $23. The firm posted assets of $1.2 billion in 2017. FIG Partners and D.A. Davidson & Co. are underwriters in the deal. The firm plans to list on the Nasdaq as “BCML.” Read more.
• STX Entertainment, a Burbank, Calif-based entertainment production firm, filed for an IPO in Hong Kong. The firm posted revenue of $202.6 million in the 12 months ending Sept. 2017. TPG, Hony Capital, PCCW Media, Liberty Global, and Tencent back the firm. Goldman Sachs and J.P. Morgan are underwriters in the deal. Read more.
• Air Busan, the South Korean budget airlines, has picked advisers for an IPO. Mirae Asset Daewoo and NH Investment & Securities are set to advise the IPO. Asiana Airlines backs the firm. Read more.
• Sonos, the Santa Barbara, Calif.-based speaker maker, filed confidentially for an IPO slated for June or July, Bloomberg reports citing sources. The company is seeking a valuation of between $2.5 billion to $3 billion. Read more.
EXITS
• Square agreed to acquire Weebly, a San Francisco-based website creation platform, for $365 million in cash and stock. Weebly had raised approximately $35.7 million in venture funding from investors including Sequoia Capital, Tencent Holdings, Baseline Ventures, Floodgate, and SV Angel.
• KPS Capital Partners agreed to sell Electrical Components International, a manufacturer of wire harnesses and leads, subassemblies, and other value-added assemblies, to Cerberus Capital Management. Financial terms weren't disclosed, but a source close to the situation said KPS will be making a more than 3x return on the sale.
• HgCapital Trust plc sold Radius, a Boston-based corporate service provider of international incorporations, trust, fiduciary, and fund administration services, to Vistra Group. Financial terms weren’t disclosed.
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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.
