We’ve got a new unicorn, and my colleague Robert Hackett has the exclusive.
Hippo, a tech startup focused on the insurance market, has raised $100 million in new venture capital at a $1 billion valuation, the threshold for so-called unicorn status.
Hippo's latest cash injection was spearheaded by Bond Capital, an investment firm that well-known investor Mary Meeker recently spun out of Kleiner Perkins Caufield & Byers, a Silicon Valley venture capital stalwart. (Read my recent feature about Kleiner's downfall.) This is Bond's second-ever investment following a bet in May on Canva, an Australia-based provider of graphic design tools.
Noah Knauf, the Bond investor who led Hippo's latest funding round and is joining the company's board as part of the deal, says that financial services are in the middle of a "massive and tectonic disruption." He describes home insurance as one of fintech's "gnarliest" challenges due to the prevalence of regulations in the insurance market.
"We're religious, and compliance is the religion," Assaf Wand, Hippo's chief executive and cofounder, tells Fortune. After mentioning how Hippo puts the customer first, Wand revises his statement, saying, "Actually, the customer comes second, after compliance."
Aside from the big kahunas, such as Allstate and Travelers, Hippo's biggest rival is Lemonade, a Softbank-backed fintech startup that reached a $2 billion private valuation in April. Lemonade is better known for selling renters' insurance, though it also offers homeowner's insurance.
Hippo has raised a total of $209 million in funding to date. Existing investors such as Comcast Ventures, real estate giant Lennar, venture capital firm Iconiq Capital, and others also contributed to the latest round of funding.
There’s plenty of investor appetite in the insurance sector. According to CB Insights, global insurance tech investment reached $4.15 billion in 2018. Expect more big dollars on the horizon.
WeWork IPO UPDATE: WeWork plans to make its initial public debut in September, which is earlier than investors had expected. The company, which filed its IPO paperwork confidentially late last year, is expected to publicly disclose it in August, according to The Wall Street Journal.
WeWork is reportedly meeting with Wall Street banks this week about an asset-backed loan and is expected to raise $5 billion to $6 billion, or about $2 billion more than it had originally sought. The funds will lessen the amount WeWork needs to raise in the IPO, which could increase the probability of success for a company with ballooning losses, the story says. Read more.
PE FEEDBACK: Yesterday, I asked Term Sheet readers to weigh in on Leo Hindery Jr.’s Fortune op-ed in which he makes the case for the ‘Stop Wall Street Looting Act’ and explains why the private equity industry needs to be reined in. Here’s what you had to say in response:
Jeff: Mr. Hindrey’s op-ed is so loaded with factual errors and logical fallacies that it’s hard to know where to begin critiquing it. At the core, he rejects the American Way—the free enterprise system. If he has a better model for private equity, he should do the hard work of convincing LPs, of buying companies, and building a team that can repeat that over and over. He could use his success as a shining example and urge all to emulate. Instead, he wants to use government force to have central planners—without any capital of their own at risk—to force others to conform to Sen. Warren’s views of what is best. This type of busybody regulation has always reduced capital formation, which would in turn harm most the very people he claims to champion. This is pure demagoguery.
Colin: Modern PE firms are by no means the robber barons of yesteryear. The easiest way to succeed in private equity is for your companies to hit it out of the park and grow like a weed. With that said, PE's presence in certain industries, as Leo notes, does create perverse incentives. The recent growth of PE into healthcare providers has provided little value creation beyond gamesmanship around M&A and multiple arbitrage, while likely driving up costs for patients. Is Elizabeth Warren's bill the right solution? Probably not. Another economic downturn would certain throttle back many of the excesses of the industry in an equally meaningful way.
Michael: As a sector-focused VC, I can't see doing it any other way. The value we give to our LPs (many of them strategic), and to our portfolio companies (many of whom we are engaged on a near-daily basis), is entirely connected to our depth of focus on the world of mobility-- from OEMs like our investors Renault-Nissan, BMW, Hyundai, to the world of micromobility with companies like Bird and Lime and everything in between.
– Thumbtack, a San Francisco-based local services marketplace, raised $150 million in funding. Sequoia Capital led the round, and was joined by investors including Baillie Gifford.
– Qomplx, a Reston, Va.-based intelligent decision platform provider, raised $78.6 million in Series A funding. Cannae Holdings Inc and Motive Partners led the round.
– Atom Bank, a U.K.-based digital lender, raised 50 million pounds ($62.5 million) in funding. Investors include Woodford Patient Capital Trust, BBVA, Toscafund and Perscitus LLP.
– TurnKey Vacation Rentals Inc, an Austin, Texas-based vacation rental property management company for luxury and premium vacation rental homes, raised $48 million in funding. Altos Ventures led the round.
– Fetch Robotics, a San Jose, Calif.-based intralogistics automation company, raised $46 million in Series C funding. Fort Ross Ventures led the round, and was joined by investors including CEAS Investments, Redwood Technologies, TransLink Capital and Zebra Ventures, O’Reilly AlphaTech Ventures, Shasta Ventures, Softbank Capital and Sway Ventures.
– Tile, a San Mateo, Calif.-based developer of small square-shaped tags and other technology to help people keep track of physical belongings, raised $45 million in funding. Francisco Partners led the round, and was joined by investors including GGV Capital and Bessemer Venture Partners, Bryant Stibel and SVB Financial Group.
– Arrcus, a San Jose, California-based provider of software driven solutions, raised $30 million in Series B funding. Lightspeed Venture Partners led the round, and was joined by investors including General Catalyst and Clear Ventures.
– Balena, a Seattle-based developer of infrastructure for the management of fleets of connected IoT devices, raised $14.4 million in Series B funding. OpenView led the round, and was joined by investors including Threshold Ventures, Aspect Ventures, and GE Ventures.
– Gamaya, a Switzerland-based agricultural tech company, raised 12 million CHF (about $12.1 million) in Series B funding. Mahindra & Mahindra led the round.
– Cambridge Touch Technologies, a U.K.-based provider of piezoelectric UltraTouch multi-force-and-touch technology to the consumer electronics, automotive, industrial and military markets, raised $10 million in Series B funding. Kureha Corporation led the round, and was joined by investors including Parkwalk, Downing Ventures, CM Ventures, Amadeus Capital Partners, Puhua Capital, Futaba Corporation, and The University of Cambridge.
– Bravado, a San Francisco-based professional network for sales, raised $12 million in funding, including a $8.5 million Series A round led by Redpoint. Other investors include Freestyle Capital, Village Global, Precursor Ventures, Kindred Ventures and Kevin Mahaffey.
– Replicant, a San Francisco-based provider of artificial intelligence-enabled voice technologies, raised $7 million in seed funding. Investors include Atomic, Bloomberg Beta, Costanoa Ventures, and Norwest Venture Partners.
– Freedom Robotics, a San Francisco-based provider of cloud and on-device software for monitoring, control and management of robots and robotic fleets, raised $6.6 million in seed funding. Initialized Capital led the round, and was joined by investors including Toyota AI Ventures, Liquid 2 Ventures, Andrew Miklas from S28 Capital, James Lindenbaum, Green Cow Venture Capital, Justin Kan, Josh Buckley, Kevin Mahaffey, and Arianna Simpson.
– DemandJump, an Indianapolis-based marketing technology firm, has raised $5.5 million in funding. BIP Capital led the round.
– Tapcart, a Santa Monica, Calif.-based SaaS platform that allows Shopify brands to create mobile shopping apps, raised $4 million in seed funding. Greycroft led the round, and was joined by investors including Amplify.LA, Act One Ventures and Luma Launch.
– Pomona, an Indonesia-based omni-channel marketing and sales solutions provider, raised $3 million in Series A-2 funding. Vynn Capital led the round, and was joined by investors including Ventech China and Amand Ventures following on. Existing investors Stellar Kapital and Central Capital Ventura also participated.
– Opiniion, a Lindon, Utah-based customer review and online reputation management company, raised $1.5 million in seed II funding. RET Ventures led the round.
– Canvas GFX, a Plantation, Fla.-based provider of graphics, illustration and publishing software, raised $1 million in funding from Wisdom LLP.
– Agolo, a New York-based AI startup focused on natural language processing, raised funding of an undisclosed amount. Investors include M12, Google, and Tensility Venture Partners.
HEALTH AND LIFE SCIENCES DEALS
– Freenome, a San Francisco-based biotechnology company developing a multiomics platform for early cancer detection, raised $160 million in Series B funding. RA Capital Management and Polaris Partners co-led the round, and were joined by investors including Perceptive Advisors, T. Rowe Price Associates, Inc., Roche Venture Fund, Kaiser Permanente Ventures, and the American Cancer Society’s BrightEdge Ventures. Existing investors Andreessen Horowitz, GV, Data Collective Venture Capital, Section 32, and Verily Life Sciences also participated.
– X-Vax Technology Inc, a Jupiter, Fla.-based herpes vaccines developer, raised $56 million in funding. Investors include Johnson & Johnson Innovation – JJDC, Inc., Adjuvant Capital, Serum Institute of India, Alexandria Venture Investments and FF DSF VI.
– Benchling, a San Francisco-based life sciences R&D cloud platform, raised $34.5 million in Series C funding. Menlo Ventures led the round, and was joined by investors including Lead Edge Capital, Y Combinator Continuity, Benchmark and Thrive Capital.
PRIVATE EQUITY DEALS
– Abris Capital Partners agreed to acquire Global Technical Group, a Romania-based building management solution provider. Financial terms weren’t disclosed.
– Innova Capital agreed to acquire Optiplaza, a Romania-based provider of eyewear. Financial terms weren’t disclosed.
– Quad-C Management Inc made an investment in Boulder Scientific Company, a Colorado-based specialty chemical firm. Financial terms weren’t disclosed.
– Post Capital Partners recapitalized IntraLogic Solutions, Massapequa, N.Y.-based national security solutions provider. Financial terms weren’t disclosed.
– Aurora Capital Partners acquired Cold Chain Technologies, a Franklin, Mass.-based provider of single-use and reusable passive thermal packaging solutions. Financial terms weren’t disclosed.
– Moody’s Corporation (NYSE:MCO) acquired a majority stake in Four Twenty Seven,, Berkeley, Calif.-based provider of data, intelligence, and analysis related to physical climate risks. Financial terms weren’t disclosed.
– GFL Environmental Holdings, an Ontario, Canada-based waste management firm, filed for an $100 million IPO (like a placeholder figure). Previously, it was reported GFL was seeking a $1.5 billion IPO. The firm posted $1.9 billion in revenue in 2018 and loss of $483.3 million. BC Partners, Ontario Teachers, and GIC back the firm. It plans to list in the U.S. and on the TSX. Read more.
– SDIC Power Holdings, a Chinese state-backed energy firm, hired three bankers to list on the London exchange, Reuters reports citing sources. It plans to raise between $500 million to $1 billion. Read more.
– Health Catalyst, a digital records health firm, now plans to raise $172 million in an IPO of 7 million shares priced between $24 to $25, an upsized offering with increased pricing. The firm posted revenue of $112.6 million and loss of $62 million in 2018. Norwest (20.9% pre-offering), Sequoia (21.9%), and UPMC (6.3%) back the firm. It plans to list on the Nasdaq as “HCAT.” Read more.
– Sundial Growers, a Canadian cannabis producer, plans to raise an estimated $130 million in an IPO of 10 million shares priced between $12 to $14. The firm did not post revenue in 2018, and loss of $56.5 million. It plans to list on the Nasdaq as “SNDL.” Read more.
– Borr Drilling, a Bermuda-based offshore drilling company, plans to raise $51 million in an initial public offering of 5 million shares priced at $10 based on its most recent pricing on the Oslo Børs, where it lists as “BDRILL”. Schlumberger Oilfield Holdings backs the firm. It plans to list on the NYSE as “BORR.” Read more.
– Etsy acquired Reverb, a Chicago-based music gear site, for $275 million. Reverb had raised approximately $47 million in venture funding from investors including Summit Partners, FJ Labs, Max Levchin, Jose Marin, and Adam Bain.
– Audax Private Equity sold Preferred Compounding, a Copley, Ohio-based provider of proprietary and custom mixed rubber compounds, including strips, slabs, pellets and calendered sheet end forms. The buyer was HEXPOL. Financial terms weren’t disclosed.
– Equistone Partners Europe agreed to acquire Heras, a Netherlands-based provider of perimeter protection solutions, from CRH plc. Financial terms weren’t disclosed.
FIRMS + FUNDS
– Flare Capital Partners, a Boston-based venture capital firm, raised $255 million for its second fund.
– Mark H. Goldstein joined Builders VC as a general partner.