Term Sheet — Tuesday, September 18
A NEW UNICORN
Good morning, Term Sheet reader. Lots of funding news today:
EXCLUSIVE: On-demand delivery startup Postmates raised a whopping $300 million in venture funding to accelerate its growth across the country. Tiger Global led the round, and the deal values the company at approximately $1.2 billion, according to a source familiar with the situation.
Last year, the company reported more than $1 billion in gross merchandise volume (the total sales volume of food and other goods ordered on the Postmates platform). It completes more than 3 million deliveries per month, and claims it’s contribution margin-positive in 90% of the markets it operates, meaning it’s profitable on a per-order basis.
“We have a beautiful path to an IPO in 2019,” Postmates CEO Bastian Lehmann told Term Sheet.
This might all sound like good news for the newly-minted unicorn, but it certainly hasn’t been a smooth ride. In October 2016, Postmates raised a flat round and met a tough fundraising environment as investor enthusiasm for delivery startups waned. At the time, Lehmann said it was “a super, super difficult fundraise” and joked with Fortune that “flat is the new up.”
But time passed, market conditions changed, and the on-demand delivery economy began heating up again. As my colleague Adam Lashinsky recently put it — ”Delivery, of all things, has become the global investment flavor of the month.”
Now, mega-rounds are the new normal for the biggest players in the on-demand delivery space. You don’t need to look too far to understand the reasoning behind Postmates’ fresh round of funding. Its rival Doordash announced two back-to-back rounds — a $535 million investment from SoftBank, Sequoia, and GIC in March and then an additional $250 million from Coatue Management, DST Global, and several others in August. The most recent funding values DoorDash at $4 billion.
Suddenly, Postmates’ close rival gained a massive capital advantage from none other than the 800-pound gorilla, SoftBank. When asked whether he had conversations with investors from the Vision Fund, Lehmann said, “I don’t want to comment on specifics, but people know each other — specifically in the Valley. I think Softbank is a great firm, and I have nothing bad to say about them, and that’s probably as much as I’d like to comment on that.”
Meanwhile, rumors swirled that Postmates discussed a merger with DoorDash in order to fend off competitors such as Uber, GrubHub and Amazon. When asked about whether those conversations took place, Lehmann paused and said, “Everyone knows each other, and it’s normal to have conversations, but now you have a situation where all the players are very well-capitalized.”
He added that it’ll take a few years for Postmates and its competitors to “figure out how we want to position ourselves in the market going forward.”
To put my merger questions to rest, Lehmann insisted he is serious about a 2019 IPO: “Listen, I’m an immigrant, and I came to this country to launch the Postmates business. My dream is to run a publicly-traded company.”
… AND ONE MORE: Until now, Roman has marketed itself as a men’s wellness company, primarily focused on erectile dysfunction. Today, it’s dropping the “man” from its name and re-branding as Ro, “a mission-driven healthcare company.” (Roman will continue to exist as a standalone vertical under the Ro umbrella.)
Additionally, it announced $88 million in Series A funding to expand its offerings beyond erectile dysfunction. FirstMark Capital led the round, and was joined by investors including SignalFire, Initialized Capital, General Catalyst, Slow Ventures, Sinai Ventures, Torch Capital, BoxGroup, and Tusk Ventures.
It’s also debuting a new vertical called Zero, a service meant to tackle addiction, starting with helping people quit smoking. Why is an erectile dysfunction startup fighting smoking, you may wonder?
I would tell you, but Term Sheet is getting way too long, so find out the non-clickbait answer here.
THE LATEST FROM FORTUNE...
• Former GE Vice Chair Beth Comstock: Why I Turned Down Steve Jobs—Twice (by Beth Comstock)
• Visa and Mastercard Will Pay $6 Billion to End a Massive Price-Fixing Lawsuit
• The Four Best Investments We Can Make in the Global War on Poverty (by Clifton Leaf)
• Chinese-Made Air Conditioners, Food, Furniture, and Toys Part of Trump's $200 Billion Tariff List (by Glenn Fleishman)
Uber is in talks to acquire Dubai ride-Hailing firm Careem. WeWork surpasses JPMorgan as biggest occupier of Manhattan office space. Meet SpaceX’s first moon voyage customer. Merger of Cigna and Express Scripts gets approval from Justice Dept.
• Indigo Ag, a Boston-based developer of microbial products that increase crop yields, raised $250 million in Series E funding. Investors include Baillie Gifford, Investment Corporation of Dubai, the Alaska Permanent Fund, and Flagship Pioneering.
• UiPath, a New York-based enterprise robotic process automation (RPA) software company, raised $225 million in Series C funding at a valuation of $3 billion. CapitalG and Sequoia Capital co-led the round, and were joined by investors including Accel.
• Jumo, a company that offers loans to the unbanked in Africa, raised $52 million in funding. Goldman Sachs led the round, and was joined by investors including Proparco, Finnfund, Vostok Emerging Finance, Gemcorp Capital, and LeapFrog Investments.
• WHILL, a San Carlos, Calif.-based developer of personal mobility devices, raised $45 million in Series C funding. Investors include SBI Investment, Daiwa Securities Group, WHIZ Partners, INCJ, Eight Road Ventures, MSIVC, Nippon Venture Capital, DG Incubation and Mizuho Capital.
• Ola, an India-based ride-hailing company, raised $50 million at a valuation of about $4.3 billion. Investors include Sailing Capital and the China-Eurasian Economic Cooperation Fund.
• LendInvest, a U.K.-based online platform for property finance and investing, raised about $39.5 million in Series C funding. Investors include Atomico, GP Bullhound and Tiger Management.
• Blippar, a London-based developer of augmented reality and computer vision technology, raised $37 million in funding. Candy Ventures and Qualcomm Ventures co-led the round.
• Quantum Metric, a provider of real-time intelligent digital experience analytics, raised $25 million Series A funding. Insight Venture Partners led the round.
• Miach Orthopaedics Inc, a Boston-based developer of bio-engineered surgical implants for connective tissue repair, raised $22.5 million in Series A funding. Amzak Health Investors LLC and DSM Venturing co-led the round, and were joined by investors including NFL Players Association.
• Divido, a consumer finance platform that lets customers take out credit at the point of purchase, raised $15 million in Series A funding. Dawn Capital led the round, and was joined by investors including DN Capital, Mastercard, and American Express Ventures.
• Apprentice.io, a New Jersey-based conversational augmented reality and artificial intelligence platform, raised $8 million in Series A funding. Pritzker Group Venture Capital led the round, and was joined by investors including Silverton Partners, Hemi Ventures, The Venture Reality Fund, and GFR Fund.
• Xact Robotics, an Israel-based provider of robotics navigation and steering solutions for percutaneous image-guided procedure, raised $5 million in Series C funding. The investors were not named.
• Domicile, a Seattle-based accommodation service for corporate housing and travel departments. CrossCut Ventures led the round, and was joined by investors including Madrona Venture Group.
• SayKara, a Seattle-based AI voice assistant for physicians, raised $5 million in funding. SpringRock Ventures led the round, and was joined by investors including Madrona Venture Group, NewYork-Presbyterian Hospital, and Elevate Innovation Partners.
• Sigstr, an Indianapolis-based SaaS platform for employee email signature marketing and relationship intelligence, raised $4 million in funding. Edison Partners led the round.
• Scythe, a Arlington, Va.-based provider of an advanced attack simulation platform, raised $3 million in funding. Ron Gula of Gula Tech Adventures co-led the round, and were joined by investors including Evolution Equity, Paladin Capital Group, Stony Lonesome Group and SaaS Ventures.
• TWAICE Technologies, a Munich-based provider of battery analytics software for electric vehicles, raised $1.4 million in seed funding. Unternehmertum Venture Capital Partners led the round, and was joined by Speedinvest.
• Dispatch, a Boston-based logistics company, raised funding of an undisclosed amount. Investors include Vista Equity Partners and GrandBanks Capital.
PRIVATE EQUITY DEALS
• CoolSys, a portfolio company of Audax Private Equity, acquired Ron’s Refrigeration & HVAC LLC, a Wisc.-based provider of refrigeration and HVAC engineering, service and installation. Financial terms weren't disclosed.
• WestView Capital Partners made an investment in The Phia Group, a Braintree, Mass.-based provider of outsourced cost containment and payment integrity solutions to healthcare payers. Financial terms weren't disclosed.
• Ardian acquired a minority stake in IWD, a merchandising software publisher. Financial terms weren't disclosed.
• Supernus Pharmaceuticals Inc agreed to acquire Biscayne Neurotherapeutics, a Miami-based developer of treatment for epilepsy, for up to $183 million. Biscayne had raised approximately $3 million in venture funding from investors including Quark Venture, GF Securities and Mesa Verde Venture Partners.
• Snow Phipps Group LLC acquired BlackHawk Industrial Distribution Inc, a Broken Arrow, Okla.-based industrial distributor of cutting tools, abrasives, and MRO products, from Brazos Private Equity Partners LLC. Financial terms weren't disclosed.
FIRMS + FUNDS
• Paine Schwartz Partners LLC named Steve Bierschenk as a managing director on the investment team.
• Mountaingate Capital named Molly Fitzpatrick as vice president. Previously, she was at The Halifax Group.