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Term Sheet — Monday July 1, 2019, iHeartMedia’s Direct Listing and Theranos

BURBANK, CALIFORNIA - JUNE 17: Bastille performs onstage at iHeartRadio Theater on June 17, 2019 in Burbank, California. (Photo by Kevin Winter/Getty Images for iHeartMedia)BURBANK, CALIFORNIA - JUNE 17: Bastille performs onstage at iHeartRadio Theater on June 17, 2019 in Burbank, California. (Photo by Kevin Winter/Getty Images for iHeartMedia)
BURBANK, CALIFORNIA - JUNE 17: Bastille performs onstage at iHeartRadio Theater on June 17, 2019 in Burbank, California. (Photo by Kevin Winter/Getty Images for iHeartMedia)


Happy Monday, Term Sheet readers. Lucinda here until Polina’s return Monday. Please send all deals in the meantime to

Slack is valued at about $19 billion following a direct listing that nearly tripled its valuation.

Now, iHeartMedia, the radio station giant, is eschewing the traditional IPO route in favor the same model: a listing that ostensibly cuts down on underwriter fees, raises no additional capital for the company, but does offer shareholders access to the public markets.

Previously, iHeartMedia filed for a potential IPO with Goldman Sachs and Morgan Stanley as underwriters while it was consider both the initial offering and a direct listing. Now, the firm backed by Franklin Mutual, PIMCO, and Oppenheimer Funds has withdrawn the prospectus in favor of the latter

Few companies have the option of going the direct route—at least according to the consensus. The firm must be well-known to raise funds without the underwriters’ investor network and have enough cash on hand to last a while. Slack for instance had a cash pile of $841 million at its public offering, giving it 8.6 years at its burn rate

In that sense, it fits the mold. iHeartMedia was cash flow positive as of year-end 2018 with cash on hand of about $448 million. The firm had posted losses of $202.6 million on revenue of $6.3 billion in 2018.

What does make the listing quite different from that of Spotify’s and of Slack’s: iHeartMedia initially had a plan for the cash that would come out of the potential IPO. It emerged from Chapter 11 bankruptcy in May, restructuring some $20.5 billion in debt to $5.8 billion. A good portion of that debt can be traced back to the leveraged buyout of iHeartMedia at the start of the financial crisis by Thomas H. Lee and Bain Capital. 

“We intend to use the net proceeds from this offering to repay a portion of the borrowing,” iHeartMedia’s S-1 filing had stated of the restructured debt. 

iHeartMedia’s direct listing also differs from its major predecessors in another way: It chose the Nasdaq. The New York Stock Exchange has been the dominant player in direct listings, with both Spotify and Slack choosing the platform with Citadel Securities as their designated market maker. But earlier this year, the Nasdaq clarified how a company could list directly on its platform—making it a contender to NYSE in the game. 

Then in March, a property and casualty insurance firm with limited name recognition, Watford Holdings, opted to go down the same road through the Nasdaq. So far, that stock is up 3% from its IPO at about $28 a share (the company though has never had a private market transaction, which makes it harder to judge success).

We’ll be watching closely as the direct listing market evolves. Remember there is at least one more notable direct listing that may be coming down the pipes this year: That of hospitality marketplace, Airbnb


August 4, 2020. 

That’s when opening statements for the trial of Theranos founder Elizabeth Holmes and former president Sunny Balwani are expected to begin, per the U.S. District Court for the Northern District of California. Jury selection begins July 28, 2020.

The two could face up to 20 years in jail on two counts of conspiracy to commit wire fraud and nine counts of wire fraud. Previously, the Securities and Exchange Commission settled with Holmes, calling for her to return millions to investors alongside a $500,000 fine.

Still, Holmes has maintained her innocence. The founder plans to argue that the investigative journalist who brought attention to the blood-testing startup’s scheme, John Carreyrou of the Wall Street Journal, had “an undue influence on federal regulators” that led to Theranos’ unravelling, per Bloomberg.


Jaja, a U.K.-based mobile-first business providing credit cards and other financing services, plans to acquire the U.K. credit card accounts of the Bank of Ireland for 530 million pounds ($671 million). Jaja also raised  £20 million ($25 million) in funding from investors including KKR and Centerbridge Partners. Read more.

MOBITV, an Emeryville, Calif.-based provider of IP-based video delivery solutions, raised over $50 million in funding from Oak Investment Partners, Ally Financial, and Cedar Grove Partners. 

Ornikar, a French driving school startup, raised 35 million euros ($40 million) in funding. Idinvest and Bpifrance led the round. Read more.

Picosun Oy, a Finnish manufacturer of atomic layer deposition reactors, raised 12 million euros ($13.6 million) in funding. Investors included CapMan Growth fund, Finnish Industry Investment Oy, and First Fellow Partners.

SV Academy, a San Francisco-based firm seeking to train potential Silicon Valley employees, raised $9.5 million in Series A funding. Owl Ventures led the round, and was joined by investors including Kapor Capital and Strada Education Network. Read more.

Fellow, an Ottawa-based employee management software with personalized recommendations on productivity, raised $6.5 million in seed funding. Investors included Inovia Capital,  Felicis Ventures and Garage Capital.

Laundrapp, a London-based laundry service merged with Zipjet, a Berlin-based on-demand laundry business. The merged company also raised a fresh funding round from existing investors including Toscafund, Hargreave Hale VCT, Henkel, and Rocket Internet. Financial terms weren’t disclosed. Read more.


– Surterra Wellness, an Atlanta, Ga.-based retailer of cannabis-based medical products, raised $100 million in Series D funding. Investors included former Patrón Spirits Company CEO Ed Brown.

Paloma Health, a New York-based digital medical practice focused on hypothyroidism, raised $2.5 million in seed funding. Crosscut Ventures led the round and was joined by investors including Human Ventures, and FJ Labs.


Northleaf Capital Partners acquired CSV Midstream, a Calgary-based provider of  midstream solutions. Financial terms weren’t disclosed.

– Ithaca Holdings, a portfolio company of the Carlyle Group, plans to acquire Big Machine Label Group, a Tennessee-based records and media holding company. Financial terms weren’t disclosed.

Permira is weighing a potential sale or IPO of British bootmaker Dr. Martens, per Bloomberg citing sources. Permira bought Dr. Martens in 2014 for 380 million euros ($432 million). Read more.


Berry Global Group acquired RPC Group, a British packaging firm, for $6.5 billion including debt.

Apple invested $100 million in Japan Display, a Japanese electronics screen maker. Apple will join a consortium led by Harvest Group that will invest up to $743 million in the firm, per Reuters citing sources. Read more.

RockRose Energy acquired the U.K. businesses of Marathon Oil, a Houston-based oil firm, for $95 million.

1aim, a Berlin-based startup providing mobile access control for office buildings, was acquired by FSB. Financial terms weren’t disclosed.


Advantage Insurance, a San Juan, Puerto Rico-based life insurance provider, withdrew plans for an $150 million IPO. Raymond James, JMP Securities and B. Riley & Co. were underwriters in the deal. The firm planned to list on the NYSE as “AVI.”

Livongo Health, a Mountain View, Calif.-based healthcare platform for chronic illness management, filed for an $100 million IPO. It posted revenue of $68.4 million in 2018 and loss of $33.5 million. General Catalyst, Kinnevik Online, and KPCB Holdings back the firm. Morgan Stanley, Goldman Sachs and J.P. Morgan are underwriters. It plans to list on the Nasdaq under the symbol “LVGO.” Read more.

ProSight Global, a Morristown, N.J.-based specialty insurer, filed for an $100 million IPO. Goldman Sachs and TPG back the firm. The firm posted revenue of $785.9 million in 2018 and income of $55.3 million. Goldman Sachs, Barclays, and BofA Merrill Lynch are underwriters. It plans to list on the NYSE as “PROS.” Read more.


Brookfield Infrastructure and GIC will acquire Genesee & Wyoming, a Darien, Conn.-based railroad firm, for about $8.4 billion including debt.

KKR plans to sell Kokusai Electric Corp, a Tokyo-based maker of semiconductor-manufacturing equipment, to Applied Materials for $2.2 billion. 

KJK Sports, a portfolio company of KJK Management, agreed to acquire Baltic Bicycle Trade UAB, the parent company of a Lithuanian bike manufacturer, from Asgaard A/S and Litcapital I. Financial terms weren’t disclosed.

TPG Growth acquired Crunch Fitness, a gym chain backed by Angelo, Gordon & Co. Financial terms weren’t disclosed.


LBC Credit Partners plans to raise $1 billion for its fifth fund, per an SEC filing

Susa Ventures announced its third fund, a $90 million early stage fund, a $50 million opportunity fund, as well as a $2 million parallel fund.

TDK Corporation (TSE: 6762) launched TDK Ventures, with a $50 million fund focused on material science and power.


M13, a venture firm, named Latif Peracha as General Partner;  Matt Hoffman as Partner; Gautam Gupta as Partner; and Mary Carmen Gasco-Buisson as Managing Director.

Great Hill Partners promoted Drew Loucks to partner.


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 Lucinda Shen compiled today’s Term Sheet. Reach her here.