Term Sheet — Thursday, September 13
A SUMMER OF PROMOTIONS
Good morning, Term Sheet readers.
Venture capital firms have had a busy year.
In January, BoxGroup promoted Nimi Katragadda to partner. In May, Bain Capital Ventures hired Sarah Smith as a general partner. This summer, Andreessen Horowitz appointed three new general partners — Katie Haun, Connie Chan, and Angela Strange — in a matter of three months.
Now, early-stage venture firm Canaan Partners is continuing the trend. Canaan has added two principals — Laura Chau and Byron Ling — to its consumer tech team. Chau was promoted internally, while Ling joins the firm after three years as an investor at Primary Venture Partners. Canaan also recently promoted Rayfe Gaspar-Asaoka to principal with a focus on deep tech.
Unlike most venture firms, Canaan’s principals lead deals, write checks, and sit on boards.
Chau just completed her MBA from Stanford and has worked at Canaan since 2014 when she first joined as an analyst. Ling was an early employee at online shopping company Gilt Groupe in 2010, received his MBA from Wharton, and joined as an investor at Primary Venture Partners. At Primary, he invested in companies including CoEdition, Mirror, and Noken.
WEWORK GOES SHOPPING: Flush with cash, coworking startup WeWork just bought a Salt Lake City-based office management software startup called Teem for $100 million. Teem had raised approximately $21.5 million in venture funding from investors including Greycroft, GE Ventures, NGP Capital, and Zetta Venture Partners.
Why is a coworking startup buying a software company, you may ask? The answer is corporate clients, of course! Teem has more than 2,800 customers, including GE, Dropbox, and Airbnb. WeWork, which began targeting big corporations in 2016, continues to aggressively move into the enterprise space hoping to woo more large companies to its network. WeWork’s 1,000 enterprise clients — including GE and Microsoft — reportedly represent 25% of its total membership base.
Just take a look at WeWork’s last acquisition. The company acquired Conductor, a content marketing platform, in March. That purchase gave WeWork access to Conductor’s large customers, including Citibank, Jet.com, CVS, and Salesforce.
As Wired put it, the beauty of WeWork's enterprise consulting business is that it has a variety of products and services (beyond just desk space) to sell. “Maybe you’re a Fortune 500 company with a corporate campus that you already own, and you have no desire to move your employees into a millennial-filled coworking space with go-get-em slogans and beer on tap. WeWork still has something to sell you.”
And that’s what matters — that WeWork can prove to you that it’s not just a real estate company masquerading as a tech company, as some have called it. No — you should think of it as “space-as-a service” data-driven tech behemoth. You’re not sold? Don’t worry, it has billions to spend to convince you of the latter.
OUT OF STEALTH: Applied Intuition, an autonomous driving simulation software developer, came out of stealth with $11.5 million in funding from investors including Andreessen Horowitz, Lux Capital, Floodgate, and John Doerr of Kleiner Perkins Caufield & Byers.
The two co-founders are Peter Ludwig & Qasar Younis (former YCombinator COO). To say VCs have high hopes for this company is an understatement. Andreessen, Floodgate, and Lux Capital all wrote blog posts calling it “the most impressive team in the world” and describing the startup as “laying the foundation for safety that ties the network of self-driving cars together.”
Here’s a good explanation on what exactly Applied Intuition does from a Bloomberg profile:
A self-driving simulator works like a video game. There’s an elaborate 3-D world, programmed with millions of different theoretical outcomes, run by tremendous computing horsepower. One plucky former Uber Technologies Inc. engineer, in fact, built a simulator for autonomous vehicles using the classic video game Grand Theft Auto. Applied Intuition’s set of software tools lets customers play out more than 100,000 different road scenarios. On Ludwig’s screen, a dashboard measured how each virtual intersection and obstacle affected the car’s speed, acceleration rate and something called “calculated longitudinal jerk,” a measure of how comfortable the ride would be for passengers.
Marc Andreessen said “the most under-hyped area of new technology right now is autonomous vehicles.” It’s certainly an area to watch. VC investment in the sector has boomed over the last five years, according to Pitchbook. VCs have reportedly invested $3.7 billion across 54 deals in the autonomous vehicle space so far in 2018.
THE LATEST FROM FORTUNE...
• Here Are the 5 Biggest Things Announced at Apple's Big iPhone Event (by Jonathan Vanian)
• Uber’s New Logo Is Just Its Name (by Grace Dobush)
• The FDA Is Taking 'Historic Action' Against What It Calls a Youth Epidemic of E-Cigarettes (by Kevin Kelleher)
• Sisense, a New York-based provider of business intelligence software, raised $80 million in funding. Insight Venture Partners led the round.
• Sysdig Inc, a San Francisco-based cloud-native intelligence company, raised $68.5 million in Series D funding. Insight Venture Partners led the round, and was joined by investors including Bain Capital Ventures and Accel.
• Datrium, a Sunnyvale, Calif.-based company focused on unified hybrid cloud computing and data management, raised $60 million in Series D funding. Samsung Catalyst Fund led the round, and was joined by investors including Icon Ventures, NEA, and Lightspeed Venture Partners.
• Yellow, a Brazil-based startup focused on micro-mobility services across Latin America, raised $63 million in Series A funding. GGV Capital led the round, and was joined by investors including monashees, Grishin Robotics, Base10 Partners and Class 5.
• StockX, a Detroit-based platform for buying and selling consumer goods, raised $44 million in Series B funding. GV (formerly Google Ventures) and Battery Ventures co-led the round.
• HyperGrid, a San Jose, Calif.-based provider of an intelligence cloud management platform, raised $25 million in Series C funding. HighBar Partners and Atlantic Bridge Capital led the round, and was joined by investors including Acero Capital.
• Solid Power, a Louisville, Colo.-based maker of batteries, raised $20 million in Series A funding. Investors include Hyundai CRADLE, Samsung Venture Investment Corp., Sanoh Industrial Co., Solvay Ventures and A123 Systems.
• Job Today, a U.K.-based mobile hiring app, raised $16 million in funding. The investor was 14W.
• Reprieve Cardiovascular, a Milford, Mass.-based medical device company focused on patients suffering from acute decompensated heart failure, raised $7 million in funding. Investors include Abiomed Inc.
• Secure Code Warrior, an Australia-based secure application development platform provider, raised $3.5 million in funding. Paladin Capital Group led the round, and was joined by investors including AirTree Ventures.
• Technori, a Chicago-based active startup platform, raised funding of an undisclosed amount. DV Partners led the round.
HEALTH AND LIFE SCIENCES DEALS
• Epic Sciences Inc, a San Diego-based developer of solutions to personalize and advance cancer treatment and management, raised $52 million in Series E funding. Blue Ox Healthcare Partners LLC led the round.
• ExoCoBio Inc, a South Korea-based exosome startup, raised approximately $27 million in Series B funding. Investors include Seven Tree Equity Partners, Csquared Global Asset Management, TS Investment Partners, K2 Investment, Intervest, KDB Capital, Atinum Investment, GU Equity Partners and Quantum Ventures Korea.
PRIVATE EQUITY DEALS
• Al Fire, a portfolio company of Audax Private Equity, acquired FireProTec, a Colchester, Vermont-based provider of clean agent, kitchen equipment and fire extinguisher servicing. Financial terms weren't disclosed.
• Union Capital acquired Albie’s Foods Inc, a Gaylord, Mich.-based provider of homemade-quality convenience foods for the food service and retail industries. Financial terms weren't disclosed.
• Swander Pace Capital acquired Fine Choice Foods, a distributor of fresh and frozen Asian-flavored appetizers to retail and foodservice channels in Canada and the U.S. Financial terms weren't disclosed.
• Falcon Investment Advisors invested in Basic Fun!, a Southampton, Penn.-based toy and novelties company. Financial terms weren't disclosed.
• EPIC, which is backed by Oak Hill Capital Partners, acquired Vanbridge LLC, a New York-based specialty insurance intermediary. Financial terms weren't disclosed.
• iHeartMedia agreed to acquire Stuff Media, LLC, a publisher of podcast content, which includes the HowStuffWorks podcasting business as well as a slate of premium podcast content. Financial terms weren't disclosed.
• 111, a Shanghai-based online retail drugstore, said it plans to raise $99 million in an IPO of 7.1 million ADS priced at $14, the low end of its range. It posted revenue of $145 million and loss of $37.7 million. J.P. Morgan, Citi, and CICC are underwriters. It plans to list on the NYSE as “YI.” Read more.
• X Financial, a Shenzhen, China-based peer-to-peer lending platform, says it plans to raise $110 million in an IPO of 11 million ADS priced between $9 to $11. It posted revenue of $270.1 million in 2017 and income of $51.3 million. Deutsche Bank and Morgan Stanley are underwriters. It plans to list on the NYSE as “XYF.” Read more.
• Meituan Dianping, the Chinese online food delivery-to-ticketing services platform, raised $4.2 billion in a Hong Kong IPO priced at the top end of its range, Reuters reports citing sources. Read more.
• Carlyle Group agreed to buy a majority of Sedgwick, a Memphis, Tenn.-based developer of a cloud-based platform that provides technology-enabled claims and productivity management solutions, in a deal valued at about $6.7 billion. KKR, which bought its majority stake in Sedgwick for $2.4 billion, will fully exit its position.
• Adobe Systems Inc is in negotiations to buy Marketo Inc, a San Mateo, Calif.-based cloud-based marketing software company, according to Reuters. Vista Equity Partners Management took Marketo private two years ago for $1.8 billion. Read more.
• Bomgar agreed to acquire BeyondTrust, a developer of privileged account management and vulnerability management software, from an affiliate of Veritas Capital. Financial terms weren't disclosed.
FIRMS + FUNDS
• InfraVia Capital Partners, a France-based investment firm specializing in infrastructure investments, raised more than 2 billion euros ($2.3 billion) for its fourth European fund.
• Vivo Capital, a Palo Alto, Calif.-based healthcare investment firm, raised $532 million for its opportunity fund.
• Great Point Partners, a Greenwich, Conn.-based private equity firm, raised more than $116 million for its third fund, according to an SEC filing. The target is $250 million.