PIZZA & ROBOTS
Good morning, Term Sheet readers.
Robots and pizza are what’s at the heart of SoftBank’s latest investment.
Zume, the pizza-delivery and food-logistics startup, raised $375 million in funding from Softbank, according to The Wall Street Journal. Softbank is reportedly expected to invest another $375 million in the company through a second tranche in the future. The deal would value Zume at approximately $2.25 billion, which is a big leap from from the $170 million it is valued at today.
Zume launched in 2015 as a company that uses robotics, AI, and automation to serve freshly-prepared foods. The startup owns a patent for delivery trucks that can cook food while in transit to customers. Although it began with pizza, Zume has recently broadened its vision to meal delivery as a whole by licensing its technology to restaurants looking to deploy food trucks.
So what is Softbank doing in this space? You might remember the tech behemoth led the $535 million funding round of restaurant delivery app DoorDash earlier this year. It has also backed UberEats through its investment in Uber.
Meal delivery is definitely an area of interest for the Vision Fund. Now, we eagerly await to see what Zume does with this avalanche of capital. It can’t just be spent on pizza, can it?
BLOOD MONEY: As I’ve noted before, Softbank finds itself in an awkward position because it publicly touted the fact that Saudi Arabia’s Public Investment Fund (PIF) contributed nearly half of the money for SoftBank’s $93 billion tech-focused investment fund.
The PIF’s money doesn’t stop there — it trickles down and ends up in the hands of founders that SoftBank has chosen to back. They include U.S.-based companies Uber, WeWork, and Slack.
Bloomberg recently explained that not only are those commitments now in question, but SoftBank could face “a revolt in Silicon Valley if entrepreneurs begin to think taking its cash is akin to blood money." Although there hasn’t been a revolt yet, it's certainly prompted founders to wonder whether their own investors have taken money from bad actors.
Erin Griffith, former Term Sheet author who is now at The New York Times, wrote a piece on exactly that — how some startup founders are asking their investors whether they have financial connections to a foreign government with a poor human rights record.
The efforts and calls for action are nascent. Luis von Ahn, chief executive of a language-learning app, Duolingo, said he had recently taken a closer look at the more than $100 million his company had raised from investors, including Union Square Venture and Kleiner Perkins. He does not believe any of it came from Saudi Arabia, he said, but he added that he could not be sure, given the complex, opaque network of investment vehicles that back venture capital funds.
Mr. von Ahn said the information was more useful for evaluating potential future investments than reassessing past ones, and that he planned to raise the question with potential investors if Duolingo sought more investment.
“There are all kinds of places I personally wouldn’t want to have money from,” he said.
It’s disconcerting to think, “Hold on. Am I making money for a repressive government?” I’d love to hear from you if you’re a founder — have you ever asked your investors who their LPs are? And if you’re an investor — are you fielding questions from founders who want more transparency?
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• HashiCorp, a San Francisco-based cloud infrastructure automation company, raised $100 million in Series D funding at a valuation of $1.9 billion. IVP led the round, and was joined by investors including Bessemer Venture Partners, GGV Capital, Mayfield, Redpoint Ventures and True Ventures.
• Hydrofarm, a maker of hydroponics equipment and horticultural products, raised $55 million in funding. Investors include Serruya Private Equity, Hawthorn Equity Partners and Broadband Capital.
• Vicis Inc, a Seattle-based provider of sports protective technologies, raised $28.5 million in Series B funding. Investors include Aaron Rodgers via Rx3 Ventures.
• Shape Security, a Mountain View, Calif.-based provider of bot mitigation and anti-automation solutions, raised $26 million in funding. Norwest Venture Partners led the round with participation from JetBlue Technology Ventures, Singtel Innov8, Kleiner Perkins, Venrock, Baseline Ventures, Allegis Capital, Focus Ventures, Epic Ventures, Raging Capital and Tomorrow Ventures.
• Molekule, a San Francisco-based developer of air purification technology, raised $25 million in Series B funding. Foundry Group led the round, and was joined by investors including Crosslink Capital and Uncork Capital.
• Rockset, a San Mateo, Calif.-based provider of a cloud-based search and analytics company, raised $21.5 million in seed and Series A funding. Investors include Greylock Partners and Sequoia Capital.
• Edo, an ad analytics startup, raised $12 million in Series A funding. Breyer Capital led the round.
• Currant, a Palo Alto, Calif.-based creator of smart products that reduce energy consumption, raised $7 million in seed funding. Uncork Capital and K9 Ventures co-led the round, and were joined by investors including UP2398 and Precursor Ventures.
• King Children, a New York-based eyewear brand that creates custom frames, raised $2 million in funding. Investors include Great Oaks VC, RBC Venture Partners, Gen Z Capital and Casper co-founder, Neil Parikh.
PRIVATE EQUITY DEALS
• Platform Capital recapitalized C&W Transportation Company, a Fort Collins, Colo.-based provider of less than truckload and truckload transportation services. Financial terms weren't disclosed.
• CenterOak Partners recapitalized GNAP, a specialty distributor of industrial abrasive products, equipment, specialty ceramics and ancillary services. Financial terms weren't disclosed.
• CIP Capital sold OnCourse Learning, a Brookfield, Wisc.-based learning platform and providero of compliance solutions to businesses and professionals, to Bertelsmann Education Group. Financial terms weren't disclosed.
• Webster Capital acquired Sundance Holdings Group, a Salt Lake City-based lifestyle retailer of women’s apparel and accessories, from Brentwood Associates. Financial terms weren't disclosed.
• Persistence Capital Partners sold EnvironeX Group Inc, a Québec City-based laboratory testing company, to Eurofins Scientific SE. Financial terms weren't disclosed.
• Laconia Capital Group promoted Geri Kirilova to principal.
• Oberland Capital appointed Cecilia Gonzalo and Michael Bloom to partners.
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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.