Another day, another mega-round. On-demand delivery startup Postmates raised $100 million in venture funding from investors including Tiger Global and Blackrock. The deal values the company at approximately $1.85 billion, according to a source familiar with the situation.
You might remember that just four months ago Term Sheet reported on Postmates’ last funding round, which was a whopping $300 million at a $1.2 billion valuation. This is likely the last capital raise before the company goes public. “We have a beautiful path to an IPO in 2019,” Postmates CEO Bastian Lehmann told me in September. “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.”
ZONED OUT: The government shutdown tentacles are far-reaching. The IRS cancelled a key hearing on opportunity zones, which was originally scheduled for Jan. 10 and would focus on clarifying the nuances around tax breaks and proposed regulations under the new program. I reached out to Peter Brack, founding partner of Hypothesis Ventures to further explain what the cancellation of this meeting means for the future of opportunity zones.
With the government shutdown, the Opportunity Zone hearing scheduled for January 10th has been postponed indefinitely. This hearing was to address the over 150 comments submitted to the Federal Rulemaking Portal and the letters sent to the Treasury Department by working groups during the open comment period since the last round of guidance in October 2018. To the best of our knowledge this hearing will be rescheduled a few weeks after appropriations have been made, and guidance would be released thereafter.
Because the hearing and necessary guidance have been delayed indefinitely, an enormous amount of money designated for Opportunity Zones must sit on the sidelines. While real estate investors were waiting for final clarifications on some issues, non-real estate investors were hoping for broader guidance around operating businesses, fund structures, etc. The government shutdown does not change the structure or substance of the OZ program but merely delays the implementation of it and subsequently the ability of investors to deploy capital into Opportunity Zones.
THANK U, NEXT: My colleague Lucinda Shen found out why TPG decided to turn down vaping startup Juul even though the firm had the opportunity to invest early in 2018. On Tuesday, TPG Co-CEO Jon Winkelried discussed the benefits of making Environmental Social Governance standards a key part of a company’s operations.
“Today more so than ever, having a set of values I think is a very attractive feature for an organization,” said TPG Co-CEO Jon Winkelried. “We’re trying to be more mindful of that and have a position on things.”
As a result, TPG has also stayed away potential investments in firearms, marijuana, alcohol, and tobacco.
FEEDBACK FRIDAY: Thank you to the Term Sheet readers who wrote in after my comments on Fidelity’s investment in both Bird and Lime yesterday. Many of you said that Fidelity likely doesn’t see it as a conflict of interest because it’s less of a bet and more of an indexing play.
Connor: Saw your bit about Fidelity investing in Bird and Lime – you had an interesting point about the conflicts of interest. Given that Fidelity is more of a traditional money manager, I’ve wondered if they think about investing in competing startups as a way of “indexing” so to speak, similar to how they invested in both Uber and Lyft. That way they don’t really have to make a “bet” on which company will become the dominant player, since they essentially own most of the e-scooter market (or at least the two leading firms – same point with ride-hailing). Softbank did this as well, investing in both Uber and Didi (which also made an investment in Lyft). I guess if Fidelity sees this as “venture indexing” then they are probably not extremely concerned about conflicts of interest.
Nik: Fidelity is treating VC / PE the same way a lot of large investment managers and pensions treat public markets: they want to index their exposure to an industry or asset class (that they believe will grow in value), and want to invest passively (ie: not actively pick winners.) This is simpler, and more frequent, in public markets where it's possible to construct industry indices and the same information is publicly disclosed to all shareholders on a quarterly basis. (Airline stocks are a good example — the same fund will frequently own a basket of competing airlines.) This is less common in markets where late-stage investors may take board seats, and where the information asymmetries could create conflicts of interest. But if you want to invest in a category, why force yourself to pick winners when you can get exposure to them all?
• Laird Superfood, a maker of assorted superfood products, raised $32 million in funding. Investors include WeWork.
• Decisiv Inc, a Glen Allen, Va.-based provider of service relationship management solutions, raised $30 million in funding from Kayne Partners.
• Innovid, a New York-based video advertising platform, raised $30 million in funding. Investors include Goldman Sachs’ Private Capital Investing group.
• ThreeKit, a 3D product configuration and visualization platform, raised $10 million in funding. Godard Abel led the round.
• Houwzer, a Philadelphia-based real estate tech company, raised $4.5 million in seed extension funding. Investors include Ben Franklin Capital Partners, Admiral Capital Group and Ira Lubert. Read more.
• Crossbeam, a Philadelphia-based company that helps companies find overlapping customers through data analytics, raised $3.3 million in seed funding. First Round Capital and Uncork Capital co-led the round, and was joined by investors including the Slack Fund and Village Global. Read more.
HEALTH AND LIFE SCIENCES DEALS
• Black Diamond Therapeutics Inc, a biotechnology company developing precision medicines for cancer, raised $85 million in Series B funding. New Enterprise Associates and RA Capital Management co-led the round, and were joined by investors including NexTech Invest, The Invus Group, Perceptive Advisors and Versant Ventures.
PRIVATE EQUITY DEALS
• Battery Ventures acquired NTRON Limited, a provider of gas-measurement sensors and process-oxygen analyzers. Financial terms weren't disclosed.
• LNK Partners sold its minority stake in Beachbody, a provider of fitness and weight-loss solutions. The buyer was not identified. Financial terms weren't disclosed.
• Kriya Capital acquired Receivable Solutions Specialist Inc, a Natchez, Miss.-based provider of revenue cycle management services to healthcare organizations. Financial terms weren't disclosed.
• Dalian Wanda, the Chinese conglomerate, filed for a U.S. IPO of its sports unit that could raise between $300 million to $500 million, Reuters reports citing sources. Read more.
• Anheuser-Busch InBev, the beer giant, is considering an IPO of its Asia operations in Hong Kong, Reuters reports citing sources. Read more.
• Aramco, the Saudi oil giant, is aiming for an IPO in 2021. Read more.
FIRMS + FUNDS
• JMA Ventures, a real estate investment and development firm, formed its second qualified opportunity zone fund. Financial terms weren't disclosed.
• Cat Lee joined Maveron as a partner.
• Rockwood Capital hired Tara McCann as managing director and Injong Kim as director.
• Svoboda Capital Partners promoted David Rubin to principal.