A YEAR OF MEGA-DEALS
Good morning, Term Sheet readers.
The 2018 deal landscape was flush with mega-deals and unicorn IPOs (I mean, just take a look in the deals section below). This trend is expected to continue into 2019, with the backlog of IPO candidates increasing and capital becoming more widely available, according to EY’s Global IPO trends report released this morning.
“Through a fog of uncertainty, IPO markets around the world found a clear path forward and investment opportunities ultimately delivered returns in 2018, as investor confidence, mega IPOs and the rise of the unicorn companies helped provide assurance for IPO investors,” writes Martin Steinbach, EY’s head of IPO and listing services.
A few interesting takeaways from the report:
• While 2018 global IPO volumes declined by 21% from 2017, proceeds are up by 6%. This can be largely attributed to a number of unicorns (40 IPOs, raising $32.2 billion in total) and mega IPOs that went public.
• EMEIA exchanges saw a 16% drop in deal volume and 26% decline by proceeds in 2018 compared with 2017. An unclear path to Brexit, political changes in Germany and Italy, and US trade and tariff uncertainties have directly impacted European and EMEIA economies and muted IPO activity.
• Technology, industrials and health care were the most prolific sectors by deal numbers in 2018, while technology, telecommunications and financials led by proceeds. This suggests that investors are striking a balance between growth and value investments.
• The proportion of cross-border IPOs increased in 2018 by deal number, compared with 2017. The US, Hong Kong and London continue to be the favored destinations of cross-border IPOs.
…Speaking of IPOs: Uber has picked Morgan Stanley to lead its upcoming IPO. Think of the fees associated with a listing valuing the company at as much as $120 billion…
NEXT GEN SUMMIT: Fortune’s Most Powerful Women Next Gen Summit is underway, and in attendance was Glossier CEO Emily Weiss. If you haven’t paid attention to what Weiss has been building, it’s time to start. She has quietly turned Glossier into one of the most disruptive brands in beauty. The company raised $52 million in Series C funding in February in a round co-led by IVP and Index Ventures. Other investors include Forerunner Ventures, Thrive Capital, and 14W. In total, it’s raised $86 million in venture funding.
In an interview at NextGen, Weiss revealed that Glossier has now hit $100 million in sales by being “obsessed with the customer.” She added, “We know who every single one of our customers are. We have been 100% direct-to-consumer since Day 1.”
Although Weiss has been called the “millennials’ Estee Lauder,” it wasn’t always easy — especially when raising her first round of capital. She visited 12 VC firms when she was pitching Glossier, and got 11 negative responses. Forerunner Ventures’ Kirsten Green was the first, and only, to say yes. Green told Term Sheet earlier this year that Weiss “has the right balance between an astute take on the market and ability to connect to the consumer.” She is one to watch.
• PT Tokopedia, an Indonesia-based e-commerce firm, raised $1.1 billion in Series G funding. SoftBank’s Vision Fund and Alibaba Group led the round, and were joined by investors including Softbank Ventures Korea and Sequoia India. Media reports peg Tokopedia’s valuation at $7 billion.
• Luckin Coffee, a China-based coffee chain, raised $200 million in funding at a $2.2 billion valuation. GIC and China International Capital Corp Ltd co-led the round.
• Bowery, an indoor farming company, raised $90 million in Series B funding. GV led the round, and was joined by investors including Temasek, David Barber’s Almanac fund, Dara Khosrowshahi, GGV Capital, General Catalyst and First Round Capital.
• Nexthink, a digital employee experience management software for enterprises, raised $85 million in funding. Index Ventures led the round and was joined by investors including Highland Europe, Forestay Capital, Galéo Capital, TOP Funds, Olivier Pomel, VI Partners and Auriga Partners.
• ShopKeep, a New York City-based point-of-sale platform, raised $65 million in funding. Tribeca Venture Partners led the round.
• Robotiq, a Canada-based provider of tools and software for the collaborative-robotics market, raised C$31 ($23 million) in funding, from Battery Ventures.
• WaveOptics, a U.K.-based maker of diffractive waveguides for use in augmented reality wearables, raised $26 million in funding. Octopus Ventures led the round.
• LogDNA, Mountain View, Calif.-based provider of a log management system, raised $25 million in Series B funding. Emergence Capital led the round, and was joined by investors including Initialized Capital, Y Combinator Continuity Growth and Providence Equity.
• TechSee, a Tel Aviv-based provider of AI-powered visual customer engagement solutions, raised $16 million in Series B funding. Scale Venture Partners led the round, and was joined by investors including Planven Investments, OurCrowd, Comdata Group and Salesforce Ventures.
• The Riveter, a Seattle-based female-forward coworking space, raised $15 million in funding. Alpha Edison led the round, and was joined by investors including Madrona Venture Group, New America president, CEO Anne-Marie Slaughter, fashion designer Liz Lange and TOMS founder Blake Mycoskie.
• AppOnboard, a Los Angeles-based mobile app demo and analytics platform for developers, raised $15 million in Series B funding. Breakaway Growth Fund led the round, and was joined by investors including Tiller Partners & Rainier Partners, Manta Ray Ventures, Runa Capital, Korea Investment Partners, Mirae Asset Management, MTGx, Troy Capital Partners and 500 Startups.
• MachineMetrics, a Northampton, Mass.-based AI-driven predictive analytics platform for manufacturers and machine builders, has raised $11.3 million in Series A funding. Tola Capital led the round, and was joined by investors including Hyperplane Venture Capital, Long River Ventures, Mass Ventures, Hub Angels and Firebolt Ventures.
• CarThera, a France-based company that designs and develops innovative ultrasound-based medical devices to treat brain disorders, raised €9M ($10.3 million) in Series B funding. Investors include Panakès Partners, Sham Innovation Santé (advised by Turenne Capital), Supernova Invest via its fund Supernova 2, and Group Arnault and historical investors.
• Avoxi, an Atlanta-based communications-as-a-service provider for global contact centers, has raised $10 million in funding. The investor was Ballast Point Ventures.
• BlockFi, a New York-based cryptocurrency-to-USD lender, raised $4 million in convertible debt investments. Akuna Capital led the round, and was joined by investors including Susquehanna Government Products, LLLP, CMT Digital, Recruit Strategic Partners, Galaxy Digital Ventures, Morgan Creek Digital, and Devonshire Investors.
• Mediktor, a Brooklyn, N.Y.-based symptom checker for pre-diagnosis, triage and decision-making support, raised $3.4 million in Series A funding. Alta Life Sciences Spain I FCR led the round.
• Tomahawk Robotics, a Melbourne, Fla.-based provider of advanced robotic control systems, raised $2.4 million in seed funding. Mosley Venture Partners led the round, and was joined by investors including Naples Technology Ventures, Scout Ventures and Stout Street Capital.
HEALTH AND LIFE SCIENCES DEALS
• Aro Biotherapeutics, a Philadelphia-based biotech company, raised $13 million in funding. Investors include Johnson & Johnson Innovation – JJDC Inc and BioMotiv LLC.
• Aspen RxHealth, an app-based intervention technology platform that connects pharmacists with patients to deliver clinical services, raised $9 million in Series A funding. Flare Capital Partners led the round.
• GenEdit Inc, a Berkeley, Calif.-based developer of next generation therapeutics for genetic diseases, raised $8.5 million in funding. Data Collective Bio and SK Holdings led the round, and were joined by investors including Sequoia Capital and Bow Capital.
PRIVATE EQUITY DEALS
• The Hilb Group, a portfolio company of Abry Partners, acquired Huckaby & Associates Inc, a South Carolina-based provider of property and casualty insurance solutions. Financial terms weren’t disclosed.
• Vista Equity Partners acquired 7Park Data, a New York City-based provider of data analytics software and performance indicators to institutional investment firms and Fortune 500 companies. Financial terms weren’t disclosed.
• MidOcean Partners acquired and merged HW Holdco, a B2B media and information services company serving the U.S. residential construction industry, and Meyers Research, a provider of real-time market data and advisory services to the homebuilding industry. Financial terms weren’t disclosed.
• L Catterton agreed to acquire Cholula, a Jersey City, N.J.-based producer and distributor of hot sauce. Financial terms weren’t disclosed.
• Tencent Music Entertainment Group, the largest Chinese online music-streaming service, raised $1.07 billion in an IPO of 82 million ADSs (50% insider) priced at $13, the low end of its $13 to $15 range. Tencent backs the firm. BofA Merrill Lynch, Deutsche Bank, Goldman Sachs, J.P. Morgan, and Morgan Stanley are underwriters. The firm plans to list on the NYSE as “TME.” Read more.
• Vista Equity has reportedly hired bankers for an IPO of Ping Identity, a software maker, Reuters reports citing sources. The company could be valued at between $2 billion to $3 billion. Goldman Sachs has reportedly been tapped to lead the deal. Read more.
• Junshi Biosciences, an early stage biotech firm, plans to raise as much as $414 million in a Hong Kong IPO. It plans to offer 158.9 million shares priced between HKD 19.39 to HKD 20.38 ($2.48 to $2.61), Reuters reports. Read more.
• Actis sold Compuscan, a South Africa-based credit information and analytics business, to Experian, for $263 million.
• Riverside Partners sold BioAgilytix, a Durham, N.C.-based bioanalytical contract research organization, to Cobepa. Financial terms weren’t disclosed.
FIRMS + FUNDS
• Tim Healy joined Twin Brook Capital Partners as a managing director.