AN IPO DROUGHT
Good morning, Term Sheet readers.
Let’s check in with the IPO market.
So far this year, only seven IPOs have come to market, which is down 70.8% from the 24 that priced on or before Feb. 19, 2018, according to market intelligence firm IHS Markit. Although a number of tech companies have pledged to go public in 2019, nothing major has happened yet. Next week will mark a 17-week drought since the last tech IPO.
With this information in mind, I read a new Wall Street Journal report on IPOs with great interest. The Securities and Exchange Commission has a new plan that could help boost the number of public companies. The agency unveiled yesterday a proposal that that would let all companies — not just small, emerging ones — “test the waters” and confidentially discuss potential IPO plans with investors before committing to the IPO process.
What does this mean? Companies would be able to discuss securities offerings with sophisticated investors (such as asset managers & institutional firms) in order to identify information that is important to such investors and gauge market interest before formally announcing a public offering.
SEC Chairman Jay Clayton has made it his prerogative to make it easier and more appealing for companies to go public — especially given that the number of public companies has fallen by nearly 50% since the late 1990s.
“Extending the test-the-waters reform to a broader range of issuers is designed to enhance their ability to conduct successful public securities offerings and lower their cost of capital, and ultimately to provide investors with more opportunities,” Clayton said in a written statement to the WSJ.
PODCASTING BOOM: If you’re keeping an eye on the podcasting industry, it seems like there’s new developments every day. Vox Media is expanding its partnership with Stitcher, which is one of the biggest end-to-end podcast companies, to produce a new technology news podcast from Recode as part of a multi-million dollar deal, according to Axios. The news comes weeks after Spotify announced it would buy startups a Gimlet and Anchor in hopes of creating a podcasting behemoth. I predict we will see more players pop up in the space with a focus on subscription-based models.
• Clutter, a tech-enabled, on-demand storage company, raised $200 million in Series D funding. SoftBank Vision Fund led the round, and was joined by investors including Sequoia, Atomico, GV, Fifth Wall, and Four Rivers.
• Mojio, a Canada-based cloud platform and SaaS provider for connected car services, raised $40 million in Series B funding. Investors include Assurant, Bosch, T-Mobile, Innogy Ventures, Iris Capital, Telus Ventures, Trend Forward Capital, and Kensington Capital.
• Nasuni, a Boston-based provider of cloud file services, raised $25 million in funding. Telstra Ventures led the round, and was joined by investors including Goldman Sachs, Sigma Prime Ventures, North Bridge Venture Partners and Flybridge Capital Partners.
• ViSenze, a Singapore-based provider of visual search tools, raised $20 million in Series C funding. Gobi Ventures and Sonae IM co-led the round, and were joined by investors including Rakuten and WI Harper.
• Armorblox, a San Francisco-based natural language understanding platform for cybersecurity, raised $16.5 million in Series A funding with $16.5 million. General Catalyst led the round.
• CipherTrace, a Menlo Park, Calif.-based blockchain security company, raised $15 million in funding. Aspect Ventures led the round, and was joined by investors including Galaxy Digital, Neotribe Ventures, and WestWave Capital.
• ParkHub, a Dallas, Texas-based parking company, raised $13 million in Series B funding. Arrowroot Capital led the round, and was joined by investors including Jerry Jones.
• Loom, a San Francisco-based video-based work communication tool, raised approximately $11 million in Series A funding. Kleiner Perkins led the round.
• Covera Health, a New York-based provider of an analytics-based program to reduce medical misdiagnoses and improve quality of care, raised $8.5 million in Series A funding. Equity Group Investments led the round.
• Pointivo, an Atlanta-based provider of automated analytics for drone and manned aerial platforms, raised $7 million in Series A funding. BIP Capital led the round.
• K2 Cyber Security, Inc, a developer of a cloud workload security platform, raised $6 million in seed funding from GreatPoint Ventures and Embark Ventures.
• StayTuned, a New York-based video content distribution and optimization platform, raised $2.5 million in seed funding. Bowery Capital led the round, and was joined by investors including CourtsideVC, Quaker Health, Social Leverage, Liquid 2 Ventures, The Fund, Hive Ventures, and Grape Arbor.
• 1upHealth, a platform for patients, providers, and app developers to aggregate and share medical data and wearable device metrics, raised $2.35 million in seed funding. Investors include Eniac Ventures, Meridian Street Capital, and Social Leverage.
• NarrativeDx, an Austin, Texas-based AI platform for patient experience, raised funding of an undisclosed amount. Investors include Christiana Care Health System, Summation Health Ventures, The Texas Medical Center, HealthX Ventures and Cultivation Capital.
• Kidfresh, a New York-based frozen meals brand for children, raised funding of an undisclosed amount. Investors include Monogram Capital Partners, Emil Capital Partners and AccelFoods.
HEALTH AND LIFE SCIENCES DEALS
• ThinkGenetic Inc, a provider of artificial intelligence-driven genetic diagnosis, raised $1.5 million in funding. Investors include Cian Robinson and real estate investments division of Lafayette General Health System.
PRIVATE EQUITY DEALS
• Village Fertility Pharmacy, a portfolio company of BelHealth Investment Partners, acquired Integrity Rx Specialty Pharmacy, a Scottsdale, Ariz.-based fertility-focused pharmacy. Financial terms weren’t disclosed.
• Spine & Sport Physical Therapy, a portfolio company of Great Point Partners, acquired Complete Care Physical Care Therapy, a Palm Springs, Calif.-based physical therapy provider. Financial terms weren’t disclosed.
• Probo Medical, a portfolio company of Varsity Healthcare Partners, acquired Trisonics Inc, a Harrisburg, Penn.-based provider of ultrasound equipment. Financial terms weren’t disclosed.
• Pearson (LSE:PSON) agreed to sell its U.S. K12 courseware business to Nexus Capital Management LP for $250 million, according to Reuters. Nexus will pay an initial $25 million and a further $225 million by way of a vendor note due in the next three to five years for the business. Read more.
• Compass Diversified Holdings agreed to sell Manitoba Harvest Hemp Foods, a Canada-based cannabis company, to Tilray Inc. for up to 419 million Canadian dollars ($316.6 million) in cash and stock.
• Palo Alto Networks (NYSE: PANW) agreed to acquire Demisto, a Cupertino, Calif.-based security company in the security orchestration, automation and response space, for $560 million. Demisto had raised approximately $69 million in venture funding from investors including Greylock Partners and Accel.
• symplr, which is backed by Clearlake Capital Group, agreed to acquire API Healthcare, a provider of healthcare human capital management software solutions, from Veritas Capital. Financial terms weren’t disclosed.
FIRMS + FUNDS
• Menlo Ventures, a Menlo Park, Calif.-based venture capital firm, raised $500 million for its Inflection Fund.
• Falfurrias Capital Partners, a Charlotte, N.C.-based private equity firm, raised $500 million for Falfurrias Capital Partners IV.