WE-DESIGN
Good morning, Term Sheet readers.
MEDITATING ON WALL STREET: I honestly can’t get enough of this story. Last year, UBS decided that its wealth management office overlooking the Hudson River needed a face lift. So the bank hired WeWork for some fresh ideas. WeWork presented a very WeWork-esque vision: “You need a juice bar, meditation room and a lot more greenery.” Don’t we all?
From the story:
Dave Fano, WeWork’s chief growth officer, said more financial institutions are starting to embrace a different aesthetic—with details like trailing curtains of plants and low-slung lounge chairs—instead of traditional marble lobbies. “I don’t want to stereotype too much, but I think stones and dark wood and things like that, some of that is going away,” Fano said. “There aren’t that many plants in the current UBS.”
Wall Street is looking for ways to shed its ivory tower image and lure talent away from other industries. Naratil said younger employees at UBS expect a more communal atmosphere. “I don’t want to say it’s a generational thing, but I do think that as we’re getting a higher and higher percentage of our workforce that is millennial, they’re asking a few more questions,” he said.
WeWork, which could be valued at up to $35 billion or $40 billion, established a design and office management service called Powered By We last year. It appears that the idea is to help the company reduce its reliance on expensive and long-term leases by re-designing space that its customers already use.
The overhaul of UBS's New Jersey office is its biggest design deal yet. Powered by We generated $13.7 million in revenue last year after $12.7 million in construction costs, according to Bloomberg. It’s worth keeping an eye on WeWork’s expansion from flexible office space to startups to its increasingly cozier relationship with corporate clients.
STATE OF THE MARKETS: Silicon Valley Bank released its latest State of the Markets report, and here are some of the key takeaways:
Tech’s dominance: A decade of robust consumer and business spending has helped tech lock down the top five slots as the most valuable U.S. companies (Apple, Amazon, Alphabet, Microsoft, and Facebook). However, the tech sector is susceptible to larger swings than the overall market.
Exit conditions: The backlog of companies looking to access liquidity with an IPO found low valuations in 2016 and high volatility in the beginning of 2018. But heading into the summer of 2018, IPOs are looking more attractive.
Emerging sectors: Consumer expectations are shifting and retail continues to migrate away from brick and mortar. As e-commerce giants expand their logistics capabilities to cover both domestic and international markets, startup investors are committing capital to the next generation.
MORE MONEY: Francisco Partners and GPI Capital co-led a $500 million secondary investment in LegalZoom, a Glendale, Calif.-based provider of legal solutions for small businesses and families. PE firm Permira will remain the largest shareholder, Bryant Stibel will retain its entire ownership stake, and Kleiner Perkins and Institutional Venture Partners will retain the majority of their ownership stakes in LegalZoom. IVP and Kleiner Perkins invested in LegalZoom in 2011, and the Permira funds and Bryant Stibel invested in 2014. Permira stands to return 5x its investment on the partial sale of its stake, according to a person familiar with the deal.
THE LATEST FROM FORTUNE...
• Banking Giants Including Citigroup and Barclays Sign Up for a Trial Blockchain Project (by Lucinda Shen)
• Here's What Most Worries J.P. Morgan CEO Jamie Dimon About the U.S. Economy (by Hallie Detrick)
• MoviePass Is Down Again. This Time Is It Done for Good? (by Glenn Fleishman)
• Starbucks Pairs Up With Alibaba in China to Deliver Coffee (by Erin Corbett)
VENTURE DEALS
• Gusto, a San Francisco-based payroll, benefits and HR technology platform for small businesses, raised $140 million in Series C funding. Investors include T. Rowe Price Associates, Y Combinator Continuity Fund, General Catalyst, MSD Capital (Michael Dell), Dragoneer Investment Group, CapitalG, Kleiner Perkins, Emergence Capital, and 137 Ventures.
• Freshworks, a San Bruno-based developer of customer engagement software, raised $100 million in funding at a $1.5 billion valuation. Accel and Sequoia co-led the round, and were joined by investors including CapitalG.
• Optoro, a Washington D.C.-based provider of returns optimization software, raised $75 million in funding. Franklin Templeton led the round, and was joined by investors including Revolution Growth, Generation Investment Management, and Tenfore Holdings.
• Skyline AI, an Israel-based developer of an artificial intelligence based forecasting platform for the commercial real estate market, raised $18 million in a Series A funding. Sequoia Capital and TLV Partners co-led the round, and were joined by investors including JLL Spark, a division of JLL (NYSE: JLL).
• AntWorks, a Singapore-based artificial intelligence and intelligent automation products and solutions company, raised $15 million in Series A funding, from SBI Investment Co. Ltd., a subsidiary of SBI Holdings, Inc.
• Cloud9 Technologies, a New York-based financial communications provider, raised $14 million in Series B funding. Investors include Barclays, JPMorgan and NEX Group.
• BlueVine, a Redwood City, Calif.-based provider of flexible working capital financing to small and medium-sized businesses, raised $12 million in funding. Investors include M12 and the venture arm of Nationwide.
• Molson Construction Equipment, a U.K.-based distributor of capital equipment, raised £6.3 million ($8.3 million) in funding from BGF.
• Labelbox, a company that builds artificial intelligence training data labeling software, raised $3.9 million in seed funding. Kleiner Perkins led the round, and was joined by investors including First Round and Google’s Gradient Ventures.
• Xwing, a San Francisco-based autonomous aviation company, raised $4 million in seed funding. Eniac Ventures led the round, and was joined by investors including Array Ventures.
PRIVATE EQUITY DEALS
• NexPhase Capital made an investment in Brandt Information Services, a provider of Software-as-a-Service recreational licensing solutions. Financial terms weren't disclosed.
• GenNx360 Capital Partners acquired Precision Aviation Group Inc, an Atlanta-based provider of maintenance, repair and overhaul and supply chain solutions for fixed and rotary-wing aircrafts. Financial terms weren't disclosed.
• Trigo, a company backed by Ardian, acquired Supply Chain Services International, a Peoria, Ill.-based provider of supply chain and quality management solutions for the off-highway vehicles market. Financial terms weren't disclosed.
• Premier Research, a portfolio company of Metalmark Capital, acquired Regulatory Professionals Inc, a Newark, Calif.-based provider of regulatory expertise and solutions to biotechnology, pharmaceutical and medical device companies. Financial terms weren't disclosed.
• Revelstoke Capital Partners made an investment in DataLink Fund Solutions, a provider of integrated population health management applications. Financial terms weren't disclosed.
• Synoptek, a portfolio company of Sverica Capital Management, acquired Indusa, an Oakbrook Terrace, Ill.-based technology company focused on end-to-end enterprise software solutions and services. Financial terms weren't disclosed.
OTHER DEALS
• Advanced Energy Industries, Inc. (NASDAQ: AEIS) agreed to acquire LumaSense, a Santa Clara, Calif.-based designer and manufacturer of photonic based measurement and monitoring solutions, for approximately $85 million.
• Entrust Datacard made an investment in CensorNet, a U.K.-based cloud security company. It also acquired SMS Passcode, a Denmark-based provider of an adaptive multi-factor authentication platform. Financial terms weren't disclosed.
IPOs
• TKK Symphony Acquisition, a Hong Kong-based blank check company seeking a consumer focused business, filed for a $200 million IPO. Former TPG partner Sing Wang is CEO. EarlyBirdCapital is underwriter. It plans to list on the Nasdaq as “TKKSU.” Read more.
EXITS
• Lovell Minnick Partners agreed to acquire National Auto Care Corporation, a Westerville, Ohio-based provider of automotive protection products, from Trivest Partners.
• KKR agreed to buy Discovery Midstream, a Dallas, Texas-based natural gas and oil gathering and natural gas processing services company, for about $1.2 billion. TPG Growth is the seller.
• Resurgens Technology Partners agreed to acquire InvestorForce, a provider of investment analytics and reporting solutions for the global institutional investment industry. The seller was MSCI Inc. Financial terms weren't disclosed.
• Takeaway.com (ENXTAM:TKWY) will buy 10bis, an Israel-based online ordering company, from TA Associates and founder Tamir Carmel for 135 million euros ($157 million) in cash. Read more.
• KKR sold its minority stake in Saba, a Spain-based industrial operator of urban mobility solutions, to Criteria Caixa. Financial terms weren't disclosed.
• Genstar Capital agreed to sell Accruent, an Austin, Texas-based provider of physical resource management solutions, to Fortive Corporation for $2 billion.
• The Riverside Company agreed to sell its investment in Blue Microphones, a Westlake Village, Calif.-based manufacturer of microphones and headphones, to Logitech (NASDAQ: LOGI).
• Industrial Opportunity Partners acquired SignResource, a Maywood, Calif.-based manufacturer of signage and identity solutions. It formed a new holding company, SRR Holdings, Inc, which owns SignResource and Royston LLC, an existing IOP portfolio company. SignResource and Royston will collaborate but remain independently operated businesses under SRR Holdings. Financial terms weren't disclosed.
FIRMS + FUNDS
• Blue Lake Capital, a China-based venture capital firm, raised $138.9 million for its second fund, according to an SEC filing. The target is $200 million.
PEOPLE
• Khobi Brooklyn joined Atomic as a partner.
• Andrew Nguyen joined Yellow Wood Partners as a vice president.
SHARE TODAY'S TERM SHEET
View this email in your browser.
Polina Marinova produces Term Sheet, and Lucinda Shen compiles the IPO news. Send deal announcements to Polina here and IPO news to Lucinda here.
