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Startups Going Public Have Created Their Own Literary Genre: Term Sheet

Exercise equipment maker Peloton raised eyebrows over how it described itself in its filing for an initial public offering on Tuesday. 

“On the most basic level, Peloton sells happiness," Peloton CEO John Foley wrote, sounding more like a self-help guru. "But of course, we do so much more.” The filing went on to call Peloton “a technology company, a media company, an interactive software company, a product design company, a social connection company, a DTC retail company, an apparel company, and a logistics company.”

That’s a lot. 

Peloton isn’t the only company aspiring for an IPO to lay it on thick. Oprah-speak has become so common in S-1 filings, traditionally a dry run-down of financial minutiae, that it’s practically become its own literary genre. 

Below are several examples from this year's IPO filings.

PELOTON

What it says it does: “We sell happiness.”

What it actually does: It makes people sweat (and if they become addicted to it, all the better because it drives retention, the company acknowledged in its filing). The company sells home exercise equipment, including bikes and treadmills, for upwards of $2,000. It also has 1.4 million members, and claims that 92% of the connected fitness products it has sold still had an active subscription associated with them as of June 30.

THE WE COMPANY (WEWORK)

What it says it does: “We are a community company committed to maximum global impact.” (The word “community” is mentioned 150 times in the S-1.)

What it actually does: WeWork rents co-working office space, typically to tech startups. It also loses a lot of money. In full year 2018, it burned through $1.6 billion on $1.8 billion in revenue. One person may see WeWork as a company hemorrhaging money, while it sees itself as a “a place to bring people together, build community and enhance productivity”— cucumber water and beer bashes included.

ZOOM

What it says it does: “We provide a video-first communications platform that delivers happiness and fundamentally changes how people interact.”

What it actually does: Here’s yet another company that claims it will make you happier. Zoom is a video conferencing business that sells subscriptions to teams that want to get face time with remote employees. Zoom is basically a fancy video version of the dreaded conference call, and I’m not sure how much happiness that creates.

PINTEREST

What is says it does: “Pinterest is where more than 250 million people around the world go to get inspiration for their lives.”

What it actually does: There’s a reason Pinterest is pitching itself as a destination for inspiration. People often visit Pinterest when they want to plan a wedding, re-decorate their homes, or learn to cook. And what better pitch to advertisers (which is how Pinterest makes its money, after all) than the idea that people are visiting the site while contemplating a lifestyle change that requires big spending?

Read it on Fortune.com here.

A BIG DEAL: Hudson’s Bay is selling the operations of its Lord & Taylor department store chain to clothing rental subscription company Le Tote for $100 million. Of the total, a quarter will come in the form of a promissory note payable in cash after two years. Additionally, Hudson’s Bay will take a stake in Le Tote and get two seats on the board. That stake will be 25%, according to a person familiar with the deal. 

Le Tote has raised more than $62 million in venture funding from investors including Epic Ventures, Lerer Hippeau, Azure Capital, and Simon Ventures. Read more.

AN AMAZON DEAL: Amazon and Indonesian ride-hailing startup Go-Jek have discussed an arrangement in which Amazon would make a sizable investment in Go-Jek and tap into the company’s delivery infrastructure in Indonesia, according to the Wall Street Journal. Why? In expanding into Indonesia, Amazon would be tapping the region’s most populous market, home to more than 260 million people. Read more.

VENTURE DEALS

Hound Labs Inc., an Oakland, Calif.-based maker of a dual marijuana and alcohol breathalyzer, raised $30 million in Series D funding. Intrinsic Capital Partners led the round, and was joined by investors including NFP Ventures and Main Street Advisors.

Bestmile, a San Francisco and Switzerland-based fleet orchestration platform, raised $16.5 million in Series B funding. Blue Lagoon Capital and TransLink Capital led the round.

Inkitt, a Germany-based operator of an online community for writers and readers of stories, raised $16 million in Series A funding. Kleiner Perkins led the round, and was joined by investors including HV Holtzbrinck Ventures, angel investor Itai Tsiddon, Xploration Capital, Redalpine Capital, Speedinvest, and Earlybird.

HOMEE, a Tampa, Fla.-based on-demand home services platform that provides homeowners and property managers, raised $15 million in Series B funding. Forte Ventures led the round, and was joined by investors including Liberty Mutual Strategic Ventures, The Hartford, State Farm Ventures, Ferguson Ventures, Activate Capital Partners, Florida Funders, Deepwork Capital, and Engage.

ReadMe, a San Francisco-based startup that helps companies build out their API documentation and developer metrics, raised $9 million in Series A funding. Accel led the round, and was joined by investors including Y Combinator.  

VoiceOps, a San Francisco-based AI coaching & training platform, raised $9 million in Series A funding. Bain Capital Ventures led the round. 

Residently, a London-based home rental platform, raised £7 million ($8.5 million) in seed funding. Investors include Felix Capital, LocalGlobe and A/O PropTech.

Salaryo, a New York City-based fintech platform for U.S. freelancers and startups, raised $5.5 million in funding. Investors include Ruby Ventures.

Alto, a Nashville, Tenn.-based technology platform that simplifies and streamlines the process for investors to add alternative assets to their IRAs, raised $5.4 million in seed funding. Investors include Jefferson River Capital and Moment Ventures.

Taylor & Hart, a London-based e-jeweler, raised more than 3.6 million pounds ($4.4 million) in funding. Active Partners led the round, and was joined by investors including Paddy Byng and Launchub Ventures.

TUSHY, a New York-based developer of bidet attachments, raised $2.1 million in seed funding. Investors include Unorthodox Ventures and Naples Ventures Group

Mythic Markets, a San Francisco-based fractional investing platform for fans, raised $2 million in seed funding. Slow Ventures led the round, and was joined by investors including Third Kind Venture Capital, and Global Founders Capital.

Cerberus Interactive, an Austin, Texas-based game development studio, raised $1.75 million in funding. Investors include MobilityWare and Steve Huffman.

Esusu, a New York-based financial technology platform helping individuals save money and build credit, raised $1.6 million in seed funding. Acumen Fund led the round, and was joined by investors including Sinai Ventures, Kleiner Perkins, Katapult Accelerator, Plug and Play Tech Center, Global Good Fund, and Temerity Capital Partners.

HEALTH & LIFE SCIENCES DEALS

HiFiBiO Therapeutics, a Paris-based biotherapeutics company, raised $67 million in Series C funding. IDG Capital led the round.

PRIVATE EQUITY DEALS

Altas Partners agreed to buy DuBois Chemicals Inc, a Sharonville, Ohio-based provider of customized and specialty chemicals solutions and services, from The Jordan Co LP. Financial terms weren’t disclosed. 

Protos Security, which is backed by Southfield Capital, acquired Security Resources, a Cherry Hill, N.J.-based managed security services and direct guard solutions provider. Financial terms weren’t disclosed. 

ClearCourse Partnership LLP, a group of companies backed by Aquiline Capital Partners, acquired BrightOffice, a U.K.-based SaaS company providing hosted, enterprise CRM software solutions. Financial terms weren’t disclosed. 

IPOs

SBI Card & Payments Services, a credit card provider and subsidiary of the State Bank of India, 80 billion Indian rupees ($1.12 billion) in an IPO this year in the country, Reuters reports. Read more.

McAfee, the cybersecurity company, has hired underwriters ahead of an IPO that could value it at $8 billion, Bloomberg reports citing sources. Intel, TPG, and Thoma Bravo back the firm. Read more.

EQT Partners, the Sweden-based private equity firm, is planning an IPO that could value it at 4 billion euros ($4.5 billion), Reuters reports citing sources. Read more.

EXITS

Platte River Equity sold PRV Metals, a provider of specialty forged titanium and steel products, to Tinicum. Financial terms weren’t disclosed. 

Bazaarvoice acquired Influenster, a New York-based product discovery and reviews platform. Financial terms weren’t disclosed. 

FIRMS + FUNDS

Satori Capital, a Dallas-based private equity firm, raised $92.75 million for its third fund, according to an SEC filing.

PEOPLE

Ravi Gupta will join Sequoia Capital as a partner in January. Previously, Gupta was the CFO of Instacart. Read more.