Term Sheet — Thursday, February 21
Good morning, Term Sheet readers.
A day after we reported on the dire state of the IPO market, we have some hope.
Ride-hailing giant Lyft is preparing to list its shares on the Nasdaq near the end of March, according to The Wall Street Journal. The company plans to launch its roadshow the week of March 18 and expects to target a valuation between $20 billion and $25 billion.
There are pros and cons to Lyft going public before its biggest rival Uber. As Pitchbook notes, it can set expectations for the ride-hailing industry and attract investor interest early. However, it’s important to remember that Lyft is significantly less valuable than Uber, and it could also lose out on investors who are holding out for Uber's IPO. Lyft was last valued at $15.1 billion, while Uber was valued at ~$70 billion.
In an email to Term Sheet, PitchBook emerging tech analyst Asad Hussain says the two companies present two fundamentally different investment propositions — with Lyft representing an investment into the U.S. ridesharing industry and Uber representing an investment into a global, bundled, mobility-as-a-service platform.
“Although we recognize the growth potential for Uber’s business, we remain more confident in Lyft given its more focused business model,” Hussain writes. “We believe Lyft chose to list ahead of Uber so as not to be burdened by the dominant ridesharing player’s likely lower valuation multiple and associated scrutiny surrounding its slowing growth profile, numerous corporate controversies, and somewhat unfocused future growth strategies.”
It’s important to note that neither company has turned a profit—indeed, both have been losing money for years. But I expect divergent outcomes. Like I said in Fortune’s Crystal Ball issue, I predict investors will greet Uber’s IPO with a shrug owing to its high price and the company’s penchant for controversy. Meanwhile, Lyft will be viewed as an attractive proposition because of its steady gain of market share from its much-larger rival as well as its potential for rapid growth across the country from a smaller base.
Although Lyft has recently been criticized for its “nice guy” image, Lyft co-founder John Zimmer said the following: "We're in a time where it's more interesting to hear about people that are maybe jerks, to say it mildly. But, I would argue ... treating people well is the right thing to do, and, it's also good for business.”
On whether he’s worried about Uber beating Lyft to the public markets, Zimmer said: "Of all the things that we've faced over the last six years, this is not something I'm concerned about.”
PAYPAL MAFIA REUNION: Keith Rabois, a longtime investor and member of the so-called PayPal mafia, is leaving Khosla Ventures to join Founders Fund as a general partner. Rabois and Founder Fund’s Peter Thiel have known each other for 30 years, working together to build PayPal.
👉(As a very important aside, I have an amazing framed photo of Thiel and Rabois that’s sitting on my desk as I write Term Sheet. The backstory: In November 2007, Fortune Magazine decided to write about the PayPal alumni at length, with the headline literally being “The Paypal Mafia"— and photograph them like the Sopranos.)
Rabois said in a statement to Term Sheet: “[Thiel] has built up an institution at Founders Fund that I feel strongly aligned with, both in how they operate internally, but also in the founders they choose to back and the audacity of the bets they take.”
Founders Fund is also hiring Delian Asparouhov as a principal. Previously, Asparouhov was Rabois’ chief of staff at Khosla Ventures.
THERANOS’ SECOND ACT: I am convinced that the Theranos saga will never end. While she faces federal fraud charges and up to 20 years in prison, Theranos founder Elizabeth Holmes thinks people will give her another chance if only they can hear her side of the story. She has reportedly held meetings with filmmakers to try to collaborate on a documentary about her “real” story, according to Vanity Fair, and she “desperately wants to write a book.” Read more at Fortune.
• Lalamove, a Hong Kong-based on-demand logistics startup, raised $300 million in Series D funding. Hillhouse Capital and Sequoia China co-led the round.
• Just Inc, a San Francisco-based plant-based food startup formerly known as Hampton Creek, is seeking to raise approximately $200 million in funding, according to Bloomberg. CLSA, the international affiliate of Beijing-based Citic Securities, is reportedly participating in the round. Read more.
• Ÿnsect, a France-based ag-tech company that specializes in breeding insects to turn them into ingredients for fish feed, pet food and organic plant fertilizers, raised $125 million (€110 million) in Series C funding. Astanor Ventures led the round, and was joined by investors including Bpifrance, Talis Capital, Idinvest Partners, Finasucre and Compagnie du Bois Sauvage.
• ThousandEyes, a San Francisco-based provider of digital experience intelligence, raised $50 million in Series D funding. GV led the round.
• Lytics, a Portland, Ore.-based customer data platform for marketers, raised $35 million in Series C funding. JMI Equity led the round.
• Splice Machine, a San Francisco-based data platform for operational artificial intelligence, raised $16 million in funding. GreatPoint Ventures led the round.
• Vincross, a China-based consumer robotics maker, raised $10 million in funding. Lenovo led the round, and was joined by investors including GGV Capital and Seek Dource.
• Neighborhood Goods, a Dallas, Texas-based department store alternative, raised $8.8 million in seed funding. Global Founders Capital led the round.
• Epogee, a producer of fat replacement and flavor enhancement food ingredients, raised $8.3 million in funding. HG Ventures led the round.
• Tillable, an online marketplace for farm landowners and growers to rent and manage farmland, raised $8.25 million in Series A funding. The Production Board and First Round Capital co-led the round.
• Rabbet, an Austin, Texas-based intelligent construction finance platform, raised $8 million in Series A funding. Investors include Goldman Sachs, QED Investors and Camber Creek.
• StayTuned, a New York-based distribution platform for video creators, raised $2.5 million in funding. Bowery Capital led the round.
• 1upHealth, a Boston-based 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.
• Opiniion Inc, a Lindon, Utah-based automated tool for businesses to collect real-time feedback from customers, raised funding of an undisclosed amount. Investors include BitWealth.
• SafeRide Inc, a Los Angeles-based healthcare logistics provider, raised Series A funding of an undisclosed amount. Fresenius Medical Care Ventures led the round, and was joined by investors including Amplify.LA, Bonfire Ventures, FCA Venture Partners and Meridian Street Capital.
• Beamery, a London-based HR recruitment software provider, raised funding of an undisclosed amount. The investor was Workday Ventures.
HEALTH AND LIFE SCIENCES DEALS
• BiomX Ltd, an Israel-based microbiome drug discovery company, raised $32 million in Series B funding. Investors include OrbiMed, Johnson & Johnson Innovation – JJDC, Inc., Takeda Ventures, Inc., 8VC, MiraeAsset and Seventure Partners.
• Neuspera Medical Inc, a San Jose, Calif.-based neuromodulation company, raised $26 million in Series B funding. Investors include 6 Dimensions Capital, Action Potential Venture Capital, Windham Venture Partners, Delta Capital, LLC and Purple Arch Ventures.
• Calypso Biotech, a Dutch developer of therapeutic antibodies for autoimmune diseases, raised 20 million euros ($22.7 million) in Series A funding. Investors include Gilde Healthcare and Inkef Capital.
PRIVATE EQUITY DEALS
• Pinnacle Dermatology, which is backed by Chicago Pacific Founders, acquired Calumet Dermatology, a Calumet City, Ill.-based provider of dermatology services. Financial terms weren't disclosed.
• Quad Partners agreed to invest in SchoolAdmin, a Austin, Texas-based provider of admissions and enrollment software for K-12 schools. Financial terms weren't disclosed.
• Pfingsten acquired Full Spectrum Group, a Pleasanton, Calif.-based provider of repair, maintenance and validation services for laboratory instrumentation. Financial terms weren't disclosed.
• Blue Sage Capital made an investment in All-State Industries, Inc, a Des Moines, Iowa-based manufacturer of non-metallic components. Financial terms weren't disclosed.
• Qlik agreed to acquire Attunity, a Boston-based data integration and big data management software solutions provider, for $560 million. Attunity had raised approximately $30.5 million in venture funding from investors including Microsoft and Viola Credit.
• Flexpoint Ford made an investment in YPrime, a Malvern, Penn.-based provider of clinical trials software. The seller was Stonehenge Growth Equity Partners. Financial terms weren't disclosed.
• Apax Partners agreed to sell its stake in AssuredPartners, an insurance brokerage, to an investor group led by GTCR. Financial terms weren't disclosed.
• DoubleVerify acquired Zentrick, a Belgium-based digital video technology company that provides middleware solutions to drive the seamless execution and performance of online video advertising. Financial terms weren't disclosed. Zentrick had raised approximately $3.4 million in funding from investors including Fortino Capital.
• Aquiline Capital Partners agreed to acquire Relation Insurance Services, a Walnut Creek, Calif.-based independent insurance brokers, from Parthenon Capital and Century Equity Partners. Financial terms weren't disclosed.
• Equistone Partners Europe acquired RENA, a manufacturer of technologically high-quality machinery for wet-chemical surface treatments, from Capvis AG.
FIRMS + FUNDS
• MPM Capital, a Cambridge, Mass.-based venture capital firm, raised $400 million for its seventh venture fund, BioVentures 2018.
• Jerusalem Venture Partners, an Israel-based venture firm, raised $220 million for its eighth fund.
• Geoff Barden joined Zygus Capital as a managing partner.
• Amit Jain re-joined TA Associates as a vice president.
• Wendel promoted Kyle Hutchison to senior associate.
• Chris Rutherford joined Macquarie Capital as a managing director.