IPO PREP
Good morning, Term Sheet readers.
Just a month ago, Uber CEO Dara Khosrowshahi said at Fortune’s Brainstorm Tech Conference that he plans to take Uber public in 2019, adding that the company is in a “good position” in terms of its profitability, excluding certain expenses, and margins.
However, there was one small problem — Uber hadn’t had a chief financial officer since 2015, a glaring hole for a company planning an IPO.
On Tuesday, the tech behemoth appointed Wall Street veteran Nelson Chai as CFO. Chai, who was most recently CEO of insurance provider Warranty Group, will join Uber in about a month. Warranty, a portfolio company of TPG Capital, sold for $2.5 billion last year to Assurant. TPG in turn owns a stake in Uber. Chai was also previously a President at CIT Group, a CFO at Merrill Lynch, as well as CFO at NYSE Euronext.
My colleague Lucinda Shen reports:
Nelson’s appointment is a spark for banks to begin seriously vying for a role in what will likely be among the largest IPOs in the market history. That comes even though the company, valued north of $60 billion, posted losses of $891 million in the second quarter of the year and revealed slowing revenue growth: 49% year-over-year, to $2.7 billion, compared to 67% in its first quarter.
...IN OTHER UBER NEWS: Fifty-six current and former Uber employees who filed sexual harassment claims will split approximately $1.9 million as they stand to collect an average of $33,928.57, according to Bloomberg. Additionally, those workers along with 431 other female and minority engineers covered by a 2017 class-action lawsuit will receive an average of just under $11,000 for alleged pay disparities.
EYE-POPPING RETURNS: Benchmark Capital is sitting on one of the most profitable venture funds since the dot-com boom. The fund, which raised approximately $550 million in 2011, has multiplied investors’ money ~25 times (!), before fees, according to a report in The Wall Street Journal.
Some highlights from the story:
• Benchmark’s seventh fund invested in nine companies valued at $1 billion or more. It invested in companies including Uber, Snap, WeWork, DuoSecurity, and Stitch Fix.
• The fund boasts more than $14 billion in cash and paper gains for the firm and its investors.
• Benchmark plans to stay lean and keep its next fund at the same size as previous ones, while rival firms raise mega-funds.
VENTURE DEALS
• Root Insurance, a Columbus, Ohio-based car insurance company, raised $100 million in Series D funding at a $1 billion valuation. Tiger Global Management led the round, and was joined by investors including Redpoint Ventures, Ribbit Capital, and Scale Venture Partners.
• ThinkHR, a Pleasanton, Calif.-based provider of HR knowledge software and services, raised $67.5 million in funding from Guidepost Growth Equity.
• Knewton, a New York City-based provider of adaptive learning products and technologies, raised up to $25 million in funding. TriplePoint Capital led the round, and was joined by investors including Accel, Atomico, Bessemer Venture Partners, FirstMark Capital, First Round Capital, Founders Fund and Sofina, invested an additional $5 million.
• Semmle, a San Francisco-based provider of a software engineering analytics platform, raised $21 million in Series B funding. Accel Partners led the round, and was joined by investors including Work-Bench.
• Robin Systems, a San Jose, Calif.-based company that brings hyper-converged Kubernetes technology to big data, databases and AI/ML, raised $17 million in Series B funding. USAA Ventures led the round, and was joined by investors including Hasso Plattner Ventures, Clear Ventures and DN Capital, USAA.
• OPKIX, a Costa Mesa, Calif.-based developer of consumer camera products, raised $11.8 million in funding. Investors include Ash Avildsen, Dorian van Rijsselberghe, Robbie Maddison and Joel Parkinson.
• Gecko Robotics, a Pittsburgh, Penn.-based developer and operator of robots that perform infrastructure inspections by climbing into confined and dangerous places, raised $7 million in funding. Investors include Founders Fund, Mark Cuban, The Westly Group, Justin Kan and Y Combinator.
• Braavo Capital Inc, a New York City-based provider of on-demand financing for mobile apps and games, raised $6 million in Series A funding. E.ventures led the round.
• Canvass Analytics, a Toronto-based provider of AI-enabled predictive analytics for the industrial internet of things, raised $5 million in funding. Gradient Ventures led the round, and was joined by investors including Bedrock Industries, Viaduct Ventures, Real Ventures and Barney Pell.
• Bandura, a Maryland and Missouri-based security solutions provider, raised $4 million in Series A funding. Grotech Ventures, Gula Tech Adventures, Maryland Venture Fund and Cultivation Capital led the round.
• PLNAR, a provider of augmented reality solutions, raised $3.9 million in Series A funding. ManchesterStory Group led the round, and was joined by investors including The Venture Reality Fund and Colopl Next Inc.
• Clear Software, a Zionsville, Ind.-based company that aims to simplify business software, raised funding of an undisclosed amount. Collina Ventures led the round, and was joined by investors including Charmides Capital, MK Capital and Hyde Park Venture Partners.
PRIVATE EQUITY DEALS
• Court Square Capital Partners made an investment in Integrated Prescription Management, a Fresno, Calif.-based pharmacy benefit manager. Financial terms weren't disclosed.
• Candor Midstream, a Houston-based energy company, raised $200 million in funding from EnCap Flatrock Midstream.
• Pineapple Payments, a company backed by Providence Strategic Growth, acquired Transax, a Rolling Meadows, Ill.-based payments-focused software company. Financial terms weren't disclosed.
• Velocity Solutions, a portfolio company of H.I.G. Capital LLC, acquired CourtesyConnect, a courtesy overdraft management system. Financial terms weren't disclosed.
• New Water Capital acquired Trillium Health Care Products, a maker of products for pharmaceutical companies. Financial terms weren't disclosed.
• Turnspire Capital Partners made a significant investment in LaserMasters, a manufacturer, distributor and recycler of replacement toner cartridges, related imaging supplies, and remanufactured printers. Financial terms weren't disclosed.
IPOs
• Tenzing Acquisition, a New York-based blank check company seeking a business in India, raised $55 million in an upsized IPO. The firm plans to sell 5.5 million units priced at $10 apiece. Rahul Nayar and Parag Saxena lead the firm. Maxim Group is underwriter. It plans to list on the Nasdaq as “TZACU.” Read more.
EXITS
• Methode Electronics Inc agreed to acquire Grakon, a Seattle-based maker of lighting systems and components for the transportation sector, for $420 million. The seller was Industrial Growth Partners.
• Deutschen Beteiligungs AG sold its stake in Cleanpart, a Germany-based services company for the semiconductor industry, to Mitsubishi Chemicals Corporation. Financial terms weren't disclosed.
FIRMS + FUNDS
• Capital Dynamics, a global asset manager, raised $1.2 billion for its seventh clean energy and infrastructure fund.
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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.
