THE YEAR OF THE MEGA-ROUND
Good morning, Term Sheet readers.
We’ve got three bombshell funding rounds today. Slack, the workplace chat platform, snagged $427 million in funding at a $7.1 billion valuation. Dragoneer Investment Group and General Atlantic led the funding, along with others, including T. Rowe Price Associates, investment firm Baillie Gifford, Sands Capital, and previous investors.
The company last raised money in September when it said it landed $250 million, with SoftBank’s Vision Fund contributing the bulk of the capital.
My colleague Jonathan Vanian reports that Slack’s growing popularity hasn’t gone unnoticed. Microsoft recently updated its corporate filings with the SEC to list Slack as one of its several competitors along with Apple, Cisco, Facebook, and Google.
Also based in San Francisco, carsharing platform Getaround raised a whopping $300 million in Series D funding. SoftBank led the round, and was joined by investors including Toyota Motor Corporation.
And finally, mobile bulk shopping startup Boxed raised $111 million in funding. Japan’s Aeon Co led the round and was joined by investors including Alpha Square Group, CDIB Capital, Gabriel Naouri and existing investors.
These funding rounds are indicative of a larger trend that’s ripping through the ecosystem. Last month set an an all-time record for the number of $100 million+ venture deals struck in a single month, according to Crunchbase. I’ve written extensively on how excess capital is widening the funding gap.
Erin Griffith, former Term Sheet author who is now at The New York Times, wrote a comprehensive piece on the notion that mega-rounds — $100 million or more — used to be a rarity. Now, they’re pretty commonplace. In the article, Bill Gurley says, “If your competitor is going to raise $150 million and you want to be conservative and only raise $20 million, you’re going to get run over.”
And that’s the theme these days — capital as a differentiator. In today’s world, even a really well-funded startup company will have trouble competing when it’s up against a rival backed by a mega-fund.
SoftBank, which has invested in both Slack and Getaround, poses the following question to CEOs before its investment professionals write a check from their mammoth $100 billion Vision Fund: If money was not a constraint, what would you do differently in the next five to 10 years?
The reality is that there’s a lot of money out there — and if you don’t take it, your competitor will.
100 FASTEST-GROWING COMPANIES: Fortune released its annual list of the 100 fastest-growing companies today. It’s a measure of revenue, profit, and stock return. On average, the companies on this list delivered a 27% return to shareholders over the past three years, outperforming the S&P 500 index (12%). Nearly one-third of the 100 entrants are tech companies, and the top 10 include Facebook, Nvidia, and Amazon. See the full list here.
CONFERENCE ALERT: Fortune’s newest conference, Brainstorm Reinvent, an event devoted to exploring corporate transformation, will take place in Chicago on Sept. 24-25, in partnership with McKinsey & Company. Some of the speakers include Slack CEO Stewart Butterfield, Weight Watchers CEO Mindy Grossman, and United Technologies CEO Greg Hayes. Get more details here.
VENTURE DEALS
• One Medical, a New York-based operator of primary care practices, is in talks to raise more than $200 million in funding from the Carlyle Group, according to the Wall Street Journal. The firm also aims to buy an additional $100 million worth of shares from existing investors. Read more.
• Previse, a London-based developer of AI-based invoice payment solution, raised $7 million in Series A funding. Investors include Augmentum Fintech PLC, Bessemer Venture Partners, and Hambro Perks.
• TomboyX, a Seattle-based gender-neutral underwear company, raised $4.3 million in Series A, funding. Investors include TAU, Redbadge Pacific and SBI Investments Korea.
PRIVATE EQUITY DEALS
• Saxet III Minerals, a Houston-based oil and gas company, raised $100 million in funding from Post Oak Energy Capital LP.
• Sverica Capital Management acquired a majority interest in Gener8, a Sunnyvale, Calif.-based manufacturer of life science instrumentation and clinical devices. Financial terms weren't disclosed.
• General Atlantic made an investment in European Wax Center, an Aventura, Fla.-based beauty lifestyle brand franchise. Financial terms weren't disclosed.
• Scania Growth Capital invested SEK 35 million (~$3.8 million) in Corebon AB, a Sweden-based carbon fiber startup.
• Washington Equity Partners acquired Accu-Tube Corporation, a manufacturer of highly engineered small-diameter stainless steel tubing. Financial terms weren't disclosed.
• Rizing, a portfolio company of One Equity Partners, acquired 3D Results, a Libertyville, Ill.-based professional services firm. Financial terms weren't disclosed.
• Winchester Interconnect Corporation, a portfolio company of Snow Phipps Group, acquired W- Technology Inc, a Houston, Texas-based developer of rotatable and molded connectors, precision-machined components, and specialized cable assemblies. Financial terms weren't disclosed.
OTHER DEALS
•Tyson Foods Inc. agreed to acquire Keystone Foods, a West Chester, Penn.-based food services company, for $2.16 billion in cash. Read more at Fortune.
• TPG Capital is considering investing in Jet Airways Ltd (BSE:532617) but is not close to finalizing a deal, according to Reuters. Read more.
IPOs
• Churchill Capital, a New York-based blank check company focused on the predictive data analytics market, plans to raise $400 million in an offering of 40 million units priced at $10 apiece. Jerre Stead, former CEO of IHS, and Michael Klein, managing partner at M. Klein and Company, are cofounders. Citigroup is the underwriter. It plans to list on the NYSE. Read more.
• Entasis Therapeutics, a Waltham, Mass.-based developer of treatments for multi-drug resistant bacteria, filed to raise up to $86 million in an IPO. It did not post a revenue for 2017, and posted loss of $29.9 million. AstraZeneca (21.6% pre-offering), Clarus Ventures (14.7%), and Novo Holdings (13.7%) back the company. It plans to list on the Nasdaq as “ETTX.” Read more.
• Ant Financial, the Alibaba-backed financial giant, has pushed backed the timing of its IPO, the Financial Times reports citing sources. A listing is unlikely before the end of 2019, the same sources said. Read more.
• Tianqi Lithium, China’s largest lithium producer, is reportedly seeking to raise $1 billion in a Hong Kong IPO, Reuters reports. It has picked Morgan Stanley and CLSA for a listing. Read more.
• Cepsa, the Spanish energy company, is expected to launch an IPO as early as September, Reuters reports citing sources. The deal could value the business at 10 billion euros, or $11.4 billion. Read more.
• Stone Pagmentos, the Brazilian card processor, has reportedly hired Goldman Sachs, Citigroup and J.P. Morgan Chase as lead managers for a potential offering in New York City, Reuters reports citing sources. Read more.
EXITS
• Volpi Capital agreed to make a “significant” investment in CycloMedia Technology, a Netherlands-based provider of geospatial imagery-data and data analytics. The seller was Avedon Capital Partners. Financial terms weren't disclosed.
PEOPLE
• Mario R. Masrieh rejoined Gridiron Capital as a vice president.
• David Berry and Blake Jones joined Blue Sage Capital as associates.
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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.
