SoftBank Faces Fundraising Challenges With Its New Fund: Term Sheet

‘A CHILLY RECEPTION’

A month ago, SoftBank revealed some details around its second mega-fund.

Rajeev Misra, the CEO of the SoftBank Vision Fund, said there were plans for another investment vehicle that would be "the same size" as the debut $100 billion Vision Fund. The Wall Street Journal has now characterized SoftBank’s fundraising bid as meeting “a chilly reception” from some of the world’s biggest money managers.

Some notes:

• Why does SoftBank need a second fund? Wasn't $100 billion enough? Considering that SoftBank's Vision Fund has already deployed $70 billion of its capital in less than three years, SoftBank CEO Masayoshi Son is already looking ahead.

• The Canada Pension Plan Investment Board and Saudi Arabia’s Public Investment Fund plan to make limited or no contributions to the second fund, according to the WSJ. A SoftBank spokesman told the reporter that the idea that big investors have been cool to the second Vision Fund is “misleading and even inaccurate.”

• SoftBank has tapped Cantor Fitzgerald L.P. to help with the fundraising effort, and Cantor reportedly contacted prospective investors seeking commitments of as little as $50 million—or even less if they join feeder funds run by the investment bank.

• If that’s accurate, this would be a departure from SoftBank’s Vision Fund strategy to get large amounts of capital from several sources. For instance, Mohammed bin Salman, the Crown Prince of Saudi Arabia, wrote a $45 billion check and made it the largest backer of SoftBank’s first tech fund.

• Nearly every discussion I have with investors seems to be filled with the standard concerns: Bombshell amounts of capital can inflate already-inflated tech valuations, and pumping hundreds of millions of dollars into startups that don't necessarily need it can be dangerous. Founders offer another perspective — if I don't take the money, my competitor surely will.

Read more.

CHANGE THE WORLD: It’s been four years since Fortune launched our Change the World list, which features companies that are using the profit motive to help the planet and tackle social problems.

We’re now soliciting nominations for the 2019 edition of the list, and could use your help. The most important criteria is measurable and significant social impact (not philanthropy). We are looking for companies that do good as part of their profit-making activity. To nominate a company, please apply here.

VENTURE DEALS

• WorldRemit, a London-based startup focused on enabling quick money transfers from migrant workers and immigrants living in developed countries back home, raised $175 million in Series D funding. Investors include TCV, Accel, and Leapfrog.

• BlueVoyant, a New York-based cybersecurity firm, raised $82.5 million in Series B funding. Investors include Fiserv.

• Legwork, a provider of patient engagement and marketing automation software for dental practices, raised $17 million in funding, from Level Equity.

• BigTime Software, a Chicago-based provider of cloud-based software for professional services firms, raised $14 million in funding. Wavecrest Growth Partners led the round, and was joined by investors including MassMutual Ventures and Migration Capital.

• Abacus Insights, a New York City-based healthcare data integration company, raised $12.7 million in Series A funding. CRV led the round, and was joined by investors including .406 Ventures and Echo Health Ventures.

• Onna, a New York and Barcelona-based company dedicated to centralizing proprietary information, raised $11 million in Series A funding. Dawn Capital led the round, and was joined by investors including Dropbox, the Slack Fund, and Nauta Capital.

• Prodigy, a San Francisco-based end-to-end sales platform for car dealers, raised $9 million in Series A funding. Tribe Capital led the round, and was joined by investors including 8VC, Battery Ventures, Tuesday Capital, Abstract Ventures, and Innovation Global.

• Pillar, a New York-based student loan management startup, raised $5.5 million in seed funding. Kleiner Perkins led the round, and was joined by investors including Rainfall Ventures, Great Oaks VC, Financial Venture Studio, Kairos, Red Dog Capital and Day One Ventures.

• Liongard, a Houston-based automated system discovery and documentation software company, raised $4.5 million in Series A funding. TDF Ventures led the round.

• Soda Says, a U.K.-based online marketplace for tech products, has secured $2.5 million in funding. The lead investor was LocalGlobe.

HEALTH AND LIFE SCIENCES DEALS

• Pi Therapeutics, a preclinical-stage pharmaceutical company focused on treating cancer, raised $19.7 million in Series B funding. Pontifax led the round.

PRIVATE EQUITY DEALS

• Gauge Capital recapitalized irth Solutions, a Columbus, Ohio-based provider of 811 ticket management and field service management software. Financial terms weren't disclosed.

• Ardian acquired a minority stake in Uptoo, a France-based sales representative recruitment platform. Financial terms weren't disclosed.

• Gen Cap America will acquire Mayflower Sales, a Brooklyn, N.Y.-based provider of physical security and storefront hardware products. Financial terms weren't disclosed.

• GoodWest Industries LLC, which is backed by Palladium Equity Partners LLC, acquired Skinny Mixes LLC, a Clearwater, Fla.-based provider of low-calorie coffee syrups and flavorings, whipped foam toppings and beverage mixes. Financial terms weren't disclosed.

IPOs

• AppLovin, a Palo Alto-based game marketing platform, is weighing a $1 billion IPO. Read more.

• Chewy, a Dania Beach, Fla.-based pet product ecommerce firm, plans to raise $749 million in an IPO of shares priced between $17 to $19. The firm posted $3.5 billion in sales for the year ending January 2019 as well as loss of $2.7 billion. PetSmart backs the firm. Allen & Company, J.P. Morgan, and Morgan Stanley are underwriters. It plans to list as “CHWY.” Read more.

• The RealReal, a U.S.-based luxury reseller, Filed for an $100 million IPO. The firm posted revenue of $207.4 million and loss of $75.8 million. The firm is is backed by Perella Weinberg Partners (11% pre-offering), Canaan Partners (13%) and Great Hill Partners (14.7%). It plans to list on the Nasdaq as “REAL.” Read more.

• Global Fashion Group, the startup behind La Moda and Zalora, plans to raise $336 million (€300 million) in a Frankfurt IPO. Read more.

EXITS

• Welsh, Carson, Anderson & Stowe agreed to acquire Green Street Advisors, a a Newport Beach, Calif.-based provider of research, trading, data and analytics to the commercial real estate industry including REITs, from Golden Gate Capital. Financial terms weren't disclosed.