Good morning, Term Sheet readers.
NEW FUND: Forerunner Ventures, an early-stage venture capital firm focused on commerce, raised $360 million for its fourth fund. That’s almost triple the size of its last $122 fund raised in 2016. The firm will continue to invest in early-stage “broadly defined,” Forerunner founder Kristen Green told Fast Company. “If I were to describe the sweet spot, I would say early stage, broadly defined: Seed, A, some B [rounds]. Before, with the fund a third of this size, it was harder to do,” she said.
In a matter of eight years, Green has turned Forerunner into one of the most successful early stage funds in Silicon Valley. It is the only VC firm to have invested in both Dollar Shave Club and Jet.com, which both had exits of more than $1 billion in 2016. Some of Forerunner’s other portfolio companies include Birchbox, Bonobos, Glossier, Hotel Tonight, Warby Parker, and Outdoor Voices.
Term Sheet interviewed Forerunner founder Kristen Green in February about the evolution of commerce, developing cult-like brand loyalty, and Amazon’s effect on the industry. From our Q&A:
Product is really ubiquitous. The nuances of product are often in the eyes of the beholder — we can debate whether you like an Apple phone or a Google phone better. There will be people on either side. So you don’t even have a chance if you can’t deliver an incredible product. But that’s not the win — that’s just table stakes.
We want to spend our time with companies reaching large audiences and having big impact. The thing to compete on, at the end of the day, is delivering a great experience. And a great experience today is honoring the information your customers are willing to give you. It must be personalized to the consumer, and that’s where data plays a huge role.
- 71% of the more than 500 U.S. executives surveyed see corporate earnings improving in the coming months.
- 51% say they plan to pursue acquisitions in the coming months, outpacing the 46% who said the same in April.
- 99% of U.S. executives said they are primarily focused on U.S. M&A opportunities, rather than cross-border opportunities.
- Merger fever is highest in media and entertainment, where 89% of respondents intend to pursue acquisitions in the next 12 months, and mining and metals, where 75% intend to pursue acquisitions.
ENDLESS AMOUNTS OF $$$: If anyone was wondering, the Vision Fund is likely not the most ambitious fund we’ll see. Just last month, Masayoshi Son told Bloomberg that he wants to raise a new $100 billion fund every two or three years.
And Saudi Arabia will be waiting. The country’s Public Investment Fund (PIF) plans to make another $45 billion investment in Son’s second Vision Fund. PIF is expecting a $170 billion windfall over the next three to four years.
Let us never forget how Son convinced Mohammed bin Salman, the Crown Prince of Saudi Arabia, to invest the $45 billion for his initial fund. Here’s an excerpt from Son’s interview with David Rubenstein:
Rubenstein: “You had a meeting with the man who was the deputy prince of Saudi Arabia, who’s now the prince of Saudi Arabia. You went in, and in one hour, you convinced him to invest $45 billion.”
Son: “No, no. That’s not true. 45 minutes, $45 billion — one billion dollars per minute.” 🔥
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• Varjo Technologies, a Finland-based startup that has developed a virtual reality headset capable of “human-eye resolution,” raised $31 million in Series B funding. Atomico led the round, and was joined by investors including Next47, EQT Ventures and Lifeline Ventures.
• Klarna, a Sweden-based payments startup that helps online shoppers arrange for financing at the point of sale, raised $20 million from H&M.
• Lambda School, a San Ramon, Calif.-based computer science academy that trains students to become software engineers, raised $14 million in Series A funding. GV led the round, and was joined by investors including Stripe.
• Fusion Coolant Systems, a Canton, Mich.-based provider of advanced coolant and lubrication systems, raised $8 million in Series C funding. Material Impact and Michigan Capital Advisors led the round, and was joined by investors including MINTS- Michigan Investment in New Technology Startups, Amherst Fund and Invest Michigan.
• Deliverr, a San Francisco-based company that helps businesses offer rapid delivery experiences to their customers, raised $7.1 million Series A funding. 8VC led the round.
• AlterG, a Fremont, Calif.-based manufacturer of rehabilitation and therapy equipment, raised $6 million in a funding. Investors include Sorehsa AG, Leerink Revelation Partners, Partner Ventures, and Versant Ventures.
• RankScience, a San Francisco-based developer of an A/B testing platform for SEO, raised $1.8 million in funding. Initialized Capital led the round, and was joined by investors including Adam D’Angelo, Michael Seibel, BoxGroup, Liquid2 Ventures, FundersClub, and Jenny 8 Lee.
• Stringr, a New York-based marketplace that allows media organizations to buy video footage from amateur and professional videographers, raised $1 million in funding. Investors include The Associated Press, Advection Growth Capital, McClatchy, and G5 Capital.
HEALTH AND LIFE SCIENCES DEALS
• Front Range Biosciences, a Lafayette, Colo.-based cannabis biotech company, raised $10 million in Series A funding. Investors include Phyto Partners, WelCan Capital, Salveo Capital, Cornerstone Opportunity Partners, Sand Hill Angels, Harvard Business School Alumni Angels of New York, New York Angels and Altitude Investment Management.
PRIVATE EQUITY DEALS
• Bomgar, which is backed by Francisco Partners, acquired BeyondTrust, a Phoenix, Ariz.-based cybersecurity solutions provider. Financial terms weren't disclosed.
• Spire Capital Partners made an investment in O2B Kids Early Education, a provider of early education services for children in the Southeast. Financial terms weren't disclosed.
• Montage Partners made an investment in Puroflux Corporation, a Simi Valley, Calif.-based manufacturer of commercial and industrial water filtration systems. Financial terms weren't disclosed.
• Perforce Software, which is backed by Clearlake Capital Group, agreed to acquire Perfecto Mobile, a Burlington, Mass.-based company focused on cloud-based automated mobile and web application test software solutions. Financial terms weren't disclosed.
• LendingTree Inc agreed to acquire QuoteWizard.com, a Seattle-based insurance comparison marketplace, for $370.2 million.
• RLJ Equity Partners acquired a majority interest in Crossfuze, an Elwood, Utah-based provider of consulting, design, and implementation services, from Palladian Capital Partners. Financial terms of the transaction were not disclosed.
• Circle agreed to acquire SeedInvest, a New York-based equity crowdfunding platform. Financial terms weren't disclosed. SeedInvest had raised approximately $11.4 million in venture funding from Scot Ventures, Archer Gray, Archangel, Avenue A Ventures, Great Oaks Venture Capital, and Jumpstart New Jersey Angel Network.
FIRMS + FUNDS
• Mosaic Ventures, a London-based venture capital firm, raised $150 million for its second fund.
• Kraft Heinz formed Evolv Ventures, a Chicago-based venture fund focused on food tech companies. Kraft Heinz has committed up to $100 million to Evolv.
• Jay Freund joined The Stratford-Cambridge Group as a managing director.