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Term Sheet — Tuesday, May 29

May 29, 2018, 1:28 PM UTC

SOULED OUT

Good morning, Term Sheet readers.

Plenty happened over the long weekend. Here’s what you may have missed.

SOULCYCLE PULLS IPO: “Market conditions” strike again. Fitness studio SoulCycle has formally requested to withdraw its long-delayed IPO, citing “market conditions.” But the company has had plenty of time to go public. SoulCycle initially filed in 2015, hoping to raise at least $100 million (a placeholder figure) to pay off debt and open new studios.

As my colleague Verne Kopytoff notes, there’s a bigger story here than what’s going on in the market. In fact, the withdrawal appears to have more to do with SoulCycle than the broader market, which appears to have a huge appetite for IPOs at the moment. So what else is playing into the decision to put the public offering plans on ice?

One year after SoulCycle filed for an IPO, it paused the process and underwent a shakeup in its executive ranks. Two of its co-founders both left to pursue “other projects.” The third left earlier to found rival Flywheel.

SoulCycle CEO Melanie Whelan also requested fees paid in connection with the IPO be credited for future use — suggesting the company may try again in the future. I’m curious to see what its plans are as SoulCycle is no longer the only dominant player in the game. Rival fitness startup Peloton is reportedly preparing to go public later this year.

NEW FUND ALERT: Former TechCrunch co-editor Alexia Bonatsos has unveiled a new venture firm called Dream Machine. She’s targeting $25 million for what she describes as “an opportunistic seed fund interested in AI, voice, AR, VR, IoT, and blockchain.”

Bonatsos has made seven investments already, including ones in TruStory, Omni, and Fable Studios. TruStory is a platform that helps validate claims that people make online, whether in a blog post, white paper, website or social media post. The company aims to “bring authenticity back into the digital and decentralized world.” In other words, it can help potential investors better navigate a world rife with ICO scams.

Through her new fund, Bonatsos has also participated in one token sale, and will likely be making more investments in the cryptocurrency/blockchain space. Bonatsos once tweeted, “Women, consider crypto. Otherwise the men are going to get all the wealth, again.”

SEAN PARKER SPEAKS: In the wake of Spotify’s debut as a public company, Fortune sat down with one of its earliest boosters, Sean Parker. Here’s one particularly interesting tidbit:

Q: Apart from finally solving the whole music-sharing thing, you seem rather excited and proud of something that most people have never heard of—and something that’s, frankly, hard to imagine a VC in a Silicon Valley pitch meeting getting excited about: an obscure provision in the new federal tax legislation. What’s the Investing in Opportunity Act, and why did you push so hard for it?

PARKER: The simple notion is, If someone has unrealized capital gains, they can roll the money over into a fund that will go to find investment opportunities in certain distressed areas [or “opportunity zones”] across the country. And any tax liability from that investment is deferred. If the investment is held long enough, there is a step up in basis. The savings on the tax rate [which adjusts based on the investment holding period] is a relatively modest incentive. The real incentive is that any gains you make in that vehicle, after holding an investment for at least 10 years, are tax-free.

Read the full Q&A here.

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VENTURE DEALS

Notarize, a Boston-based digital notary startup, raised $20 million in funding. Investors include Realogy and Lennar.

YellowPepper, a Miami, Fla.-based provider of mobile banking and payments, raised $12.5 million in Series D funding. Visa led the round.

Acko, an India-based online insurance startup, raised $12 million in funding. Amazon led the round.

Waggl, a Sausalito, Calif.-based provider of employee engagement solutions, raised $7 million in Series A funding. First Analysis led the round.

Flock, a London-based startup that has created a data-driven insurance product for drones, raised £2.25 million ($3 million) in seed funding. Anthemis led the round, and was joined by investors including Plug and Play, Seed and Speed, and Downing Ventures.

Riminder, a France-based AI assistant that automates talent assessment, raised $2.3 million in funding. Investors include Xavier Niel, Jean-Baptiste Rudelle, Romain Niccoli, Franck Le Ouay, Dominique Vidal, Thibaud Elzière and Fred Potter.

PRIVATE EQUITY DEALS

Battery Ventures made a “significant investment” in Learnosity, a Dublin-based education technology firm.

BookJane, a Toronto-based platform connecting senior home facilities and families with networks of caregivers for on-demand care, received an investment from Pacific Reach. Financial terms weren't disclosed.

Kimbell Royalty Partners will acquire mineral and royalty interests managed in partnership with Haymaker Resources. The acquisition of the interests is part of a larger transaction through which Kimbell has agreed to acquire certain subsidiaries of both Haymaker Resources, LP (owned by KKR and Haymaker management) and Haymaker Minerals and Royalties LLC (owned by Haymaker management and other investors). The total combined transaction value is $404 million.

Dyal Capital Partners, Goldman Sachs Asset Management, and Landmark Partners have made a strategic minority investment in Clearlake Capital Group, a Santa Monica, Calif.-based private equity and alternative asset investment firm. Financial terms weren't disclosed. This entry has been updated.

OTHER DEALS

Alibaba Group Holding Ltd led a consortium of investors to buy about 10% of ZTO Express (Cayman) Inc (NYSE:ZTO) for $1.38 billion. Read more.

IPOs

Viva Energy Australia, the offshoot of Shell and Vitol, may seek an IPO of A$5 billion ($3.8 billion), Reuters reports citing sources. Vitol would be the seller. Read more.

NIO, a Shanghai-based electric car startup backed by Tencent, filed confidentially for an U.S. IPO that could raise up to $2 billion, Bloomberg reports citing sources. Tencent backs the firm. Read more.

Contemporary Amperex Technology, the world’s biggest electric-vehicle battery maker, lowered its IPO expectations, saying it plans to raise 5.46 billion yuan ($853 million), valuing the firm at $8.5 billion. That’s down from a prior potential valuation of $20 billion. Read more.

 iDreamSky, the Shenzhen-based mobile game maker behind “Temple Run,” filed confidentially to relist in Hong Kong. The firm previously was listed on the Nasdaq. The deal could raise $300 million. Read more.

Eidos Therapeutics, a San Francisco-based biopharmaceutical firm focused on diseases caused by transthyretin or amyloidosis, filed for a $115 million IPO. It has yet to post revenue. BridgeBio Pharma (62.7%) backs the firm. J.P. Morgan and BofA Merrill Lynch are underwriters in the deal. The firm plans to list on the Nasdaq as “EIDX.” Read more.

Avrobio, a Cambridge, Mass.-based clinical stage gene therapy firm focused on rare diseases, filed for a $86.2 million IPO. The firm has yet to post a revenue. Atlas Venture (26.6%), Clarus Life Sciences (16.6%), and SV Life Science (15.3%) back the firm. Morgan Stanley, Cowen, Wells Fargo, and Wedbush are underwriters. The firm plans to list on the Nasdaq as “AVRO.” Read more.

Gradus, Bulgaria’s leading poultry producer, filed for an $86 million IPO on the Sofia bourse. Read more.

I3 Verticals, a Nashville, Tenn.-based payments software firm, filed for an $85 million IPO. The firm posted revenue of $293 million in the 12 months ending March. Front Street Equities, Harbert Management, and Capital Alignment Partners back the firm. Cowen, Raymond James, and KeyBanc are underwriters in the deal. It plans to list on the Nasdaq as “IIIV.” Read more.

M17, a Taipei-based live-streaming firm, plans to raise $83 million in an IPO of 7.51 million ADSs, priced between $10 to $12. The firm posted revenue of $90.1 million in 2017. Vertex Asia Fund (12.1%), Infinity Ventures (9.1%), and KTB Asia Fund (5.7%) back the firm. Citigroup and Deutsche Bank Securities are underwriters in the deal. The firm plans to list on the NYSE as “YQ.” Read more.

Iterum Therapeutics, a Dublin-based firm for drug-resistant bacterial infections, priced its IPO at $80 million in an upsized offering of 6.15 million shares priced at $13, below its previously stated $14 to $16 range. The firm posted revenue of $508,000 in 2017. Advent Life Sciences (8.1% pre-offering), Arix Bioscience Holdings (8.9%), and Canaan (15.7%) back the firm. Leerink Partners and RBC Capital Markets are underwriters in the deal. It plans to list on the Nasdaq as “ITRM.” Read more.

Carbon Natural Gas Company, a Denver-based oil and natural gas producer, filed for a $75 million IPO. The firm posted revenue of $117.4 million in 2017. Yorktown Energy Partners (69.6% pre-offering) and Arbiter Capital Management (8.5%) back the firm. RBC Capital Markets is underwriter in the deal. The firm plans to list on the Nasdaq as “CRBO.” Read more.

EXITS

Fenway Partners acquired Iconic Group, an Atlanta-based provider of photography services at university and college graduations in the U.S. The sellers were Raymond James Capital and Friend Skoler & Co. Financial terms weren't disclosed.

KKR will acquire BMC Software, a Houston-based software solutions provider for the digital enterprise. The sellers include Bain Capital Private Equity and Golden Gate Capital together with GIC, Insight Venture Partners and Elliott Management. Financial terms weren't disclosed.

FIRMS + FUNDS

Pivotal China, a China-based venture capital firm raised $150 million for its inaugural fund, Pivotal bioVenture Partners China USD Fund I.

PEOPLE

Emily Calkins was promoted to senior associate at Mainsail Partners.

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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.