Term Sheet -- Wednesday, February 6

A PODCASTING EMPIRE

Good morning, Term Sheet readers.

This just in — Spotify has acquired both Gimlet Media and Anchor in hopes of creating a podcast behemoth. Gimlet focuses on producing high-quality narrative podcasts while Anchor helps with distribution and monetization.

Gimlet had raised approximately $28.5 million in venture funding from investors including WPP, Stripes Group, LionTree Partners, Graham Holdings, Betaworks, Cross Culture Ventures, and Lowercase Capital. Two years ago, the startup was reportedly valued at roughly $70 million.

Anchor had raised approximately $14.4 million in venture funding from investors including GV, Accel, Eniac Ventures, Betaworks, Homebrew, and The Chernin Group. (Betaworks must be popping champagne right about now as they were investors in both.)

Though financial terms have not been disclosed, Spotify is said to have acquired Gimlet for upwards of $200 million, according to Recode. This would make it the biggest acquisition in Spotify’s history.

These deals are a no-brainer for Spotify.

Why a no-brainer? Because of influence & engagement. Gimlet podcasts, which include Homecoming, StartUp, and Reply All, are reportedly downloaded more than 12 million times per month by listeners from nearly 190 countries worldwide. Anchor is said to have helped in the production of 15 billion hours of content listening on Spotify during the fourth quarter. Pair that with the 96 million Spotify Premium subscribers, and you can see the flashing dollar signs.

“People who consume podcasts on Spotify are consuming more of Spotify — including music,” head of Spotify Studios Courtney Holt said at CES in January. “So we found that in increasing our [podcast] catalog and spending more time to make the user experience better, it wasn’t taking away from music, it was enhancing the overall time spent on the platform.”

The bottom line: When users come to Spotify to listen to their favorite Gimlet podcast, they will inevitably spend more time engaging with the Spotify platform. Additionally, Spotify will focus on curation and hyper-personalization with its podcast arm, just like how it’s done with its music offering.

What does Spotify want to be? According to Spotify CEO Daniel Ek, the company has ambitions to become a podcasting giant that will rival Apple. In a blog post this morning, Ek writes that he believes more than 20% of all Spotify listening will be non-music content. To achieve that, the music giant plans to spend up to $500 million to acquire more podcasting companies in 2019.

Will it create a new business model? TBD. But what struck me is that Ek made it a point to focus on podcast creators. He writes, “We will offer better discovery, data, and monetization to creators.” Like I said in my Term Sheet column on Monday, the U.S. podcasting market is still in its infancy because content creators are using basic monetization techniques, while Chinese podcasters is experimenting with gamification, coupons, and limited-time memberships. Spotify (which is Tencent-backed) has actively looked into ways to enter the Chinese market for a number of years. I’m curious to see if Spotify takes a page out of China’s podcasting playbook to make the business more financially enticing for the creators.

You might have seen headlines that claim VCs don’t love podcasting startups, but this will change. With Spotify’s pledge to go on a podcast shopping spree in 2019, I’m willing to bet we’ll see the sector heat up in the coming year. Forget blockchain, good old podcasts are hot (again).

(Read this column on Fortune.com)

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Correction: There was an error in yesterday’s newsletter about Silver Lake’s acquisition. The corrected version is as follows: Silver Lake acquired ServiceMax, a provider of cloud-based software productivity tools for field service technicians, from GE Digital.

VENTURE DEALS

• Reddit, a San Francisco-based online discussion forum, is raising $150 million to $300 million in Series D funding at a $2.7 billion pre-money valuation, according to TechCrunch. Tencent is said to lead the round. Read more.

• Raisin, a Germany-based fintech marketplace for savings and investment products, raised $114 million in Series D funding. Investors include Index Ventures, PayPal, Ribbit Capital and Thrive Capital.

• Calm, a San Francisco-based meditation and wellness app, raised $88 million in Series B funding at a $1 billion valuation. TPG Growth led the round, and was joined by investors including CAA, Insight Venture Partners and Sound Ventures.

• vArmour, a Mountain View, Calif.-based API-driven cloud security company, raised $44 million in Series E funding. AllegisCyber and NightDragon co-led the round.

• Signal Sciences, a Culver City, Calif.-based web application security company, raised $35 million in Series C funding. Lead Edge Capital led the round, and was joined by investors including CRV, Index Ventures, Harrison Metal and OATV.

• Blue Hexagon, a Sunnyvale, Calif.-based cybersecurity startup, raised $31 million in funding. Investors include Benchmark and Altimeter.

• CathWorks, an Israel-based medical tech company, raised $30 million in Series C funding. Deerfield Management led the round.

• Aetion, a New York City-based healthcare technology company, raised $27 million in funding. Investors include Sanofi, UCB, McKesson Ventures, Horizon Health Services Inc, Amgen Ventures, New Enterprise Associates, Flare Capital and Lakestar.

• Komprise, a Campbell, California and India-based provider of intelligent data management solutions, raised $24 million in Series C funding. Top Tier Ventures led the round, and was joined by investors including Western Digital Capital, Canaan Partners and Walden International.

• Vinli, a Dallas-based connected car and data intelligence platform provider, raised $13.5 million in Series B funding. Investors include E.ON, The Westly Group, Hersh Family Investments and Hal Brierley.

• Productboard, an Oakland, Calif.-based product management platform company, raised $10 million in funding. Index Ventures led the round.

• 2nd Address, a San Francisco-based marketplace for professional long-term rentals, raised $10 million in Series C funding. GV led the round, and was joined by investors including Foundation Capital, Amicus Capital, and Pierre Lamond.

• KETOS, a San Jose, California-based water intelligence company, raised $9 million in Series A funding. Investors include Broadway Angels, Plum Alley Ventures, Energy Innovation, Rethink Impact and Better Ventures.

• Little Spoon, a San Francisco-based baby food and early childhood nutrition company, raised $7 million in funding. Investors include Vaultier7, Kairos, Interplay Ventures and SoGal Ventures.

• Roofr, a Canada-based developer of satellite imagery software that provides customers with a free roofing estimate online, raised $4 million in seed funding. Crosslink Capital led the round, and was joined by investors including Y Combinator, Ace & Company, and Louis Beryl.

• MakerSights, a San Francisco-based product decision platform for retail, raised $3.1 million in funding. Investors include Steve Anderson, founder of Baseline Ventures; Hayley Barna, partner at First Round Capital; Elizabeth Spaulding, senior partner at Bain & Company; and Jeff Epstein, operating partner at Bessemer Venture Partners.

• Engage3, a Davis, Calif.-based developer of retail intelligence and mobile shopping solutions, raised funding of an undisclosed amount, from Wells Fargo Strategic Capital.

• Adaptive3D, a Dallas-based provider of additive manufacturing polymer resin, raised Series A funding of an undisclosed amount. DSM Venturing and Applied Ventures LLC led the round.

HEALTH AND LIFE SCIENCES DEALS

• Bolt Biotherapeutics, a San Francisco-based biotechnology company focused on the immune system, raised $54 million in Series B funding. Pivotal bioVenture Partners led the round, and was joined by investors including Nan Fung Life Sciences, Novo Holdings and Vivo Capital.

PRIVATE EQUITY DEALS

• Relation Insurance Services, which is backed by Parthenon Capital and Century Equity Partners, agreed to acquire J. Deutsch Associates, a New York-based insurance agency. Financial terms weren't disclosed.

• Sun Capital Partners Inc acquired Simply Beautiful Smiles, a Langhorne, Penn.-based regional dental service organization. Financial terms weren't disclosed.

• Apex Group Ltd has acquired Ipes, a private equity administrator. Financial terms weren't disclosed.

• Activa Capital acquired a majority of Explore, a Paris-based developer of B2B business intelligence solutions for the real estate, construction and business services sectors. Financial terms weren't disclosed.

IPOs

• Cibus, a San Diego-based maker of gene-editing tech for the agriculture industry, said it plans to raise $100 million in an IPO of 6.7 million shares priced between $14 to $16. It posted revenue of $2.7 million in 2017 and loss of $46.2 million. BV Partners (10.6% pre-offering) and Fidelity (8.2%) backs the firm. Morgan Stanley and BofA Merrill Lynch are underwriters. It plans to list on the Nasdaq as “CBUS.” Read more.

• Avedro, a Waltham, Mass.-based maker of corneal disorders, said it plans to raise $75 million in an IPO of 5 million shares priced between $14 to $16. The firm posted revenue of $20.2 million and loss of $21.3 million in 2017. OrbiMed Capital (35.7% pre-offering), InterWest Partners (22.7%), and HealthQuest Partners (10.7%) back the firm pre-offering. BofA Merrill Lynch and J.P. Morgan are underwriters. It plans to list on the Nasdaq as “AVDR.” Read more.

EXITS

• The Carlyle Group (NASDAQ: CG) agreed to sell Graze, a UK-based healthy snack brand, to Unilever. Financial terms weren't disclosed.

• VERTU Capital and BDC Capital will acquire Firmex, a Toronto-based provider of virtual data rooms and secure document sharing solutions. The seller is Novacap. Financial terms weren't disclosed.

FIRMS + FUNDS

• Bernhard Capital Partners Management, LP, a Baton Rouge, La.-based industrial services-focused private equity management firm, raised $1.2 billion for its second private equity fund, BCP Fund II, LP.

• Harkness Capital Management LLC, a New York City-based investment firm, raised $109 million for its inaugural fund, according to an SEC filing.