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A Day of Bad News: WeWork CEO Out, Juul CEO Out, Trump Impeachment Inquiry, and Comscore Fraud: Term Sheet

September 25, 2019, 1:45 PM UTC

Where do I even begin?

I was on a flight yesterday, and I chose not to get the Wi-Fi. I vicariously listened to an audio book and drifted in and out of sleep with zero cares in the world. And then I landed.

The first thing I saw on Twitter was the news about WeWork CEO Adam Neumann stepping down, and I naively thought I had missed so much while in the air. My colleague Daniel Bentley responded with an ominous: “Wait til you scroll up.” 

Here are the words I dropped into the Term Sheet word doc as I scrolled up last night: “Neumann out, Comscore fraud, Trump impeachment inquiry, Brexit.”

But wait, there’s more! This morning, Juul’s co-founder and CEO stepped down too amid a proposed U.S. ban on vaping flavors that make up more than 80% of its sales. 

I’m going to attempt to address some of the big stories of the day. Let’s begin: 

WEQUIT: Oh boy. In the off chance you haven’t read 18 hot takes on WeWork already, let’s talk about it. A Term Sheet reader emailed me and asked, “Is this actually a WeWork blog?” At the risk of upsetting them, I need to talk about WeWork just one more time.

Not long ago, WeWork vowed to “elevate the world’s consciousness” at a $47 billion valuation. People raised eyebrows at the company’s business model and governance practices. So WeWork decided to compromise. It made governance changes and postponed its IPO amid spiralling investor demand. By that point, the company’s sky-high valuation was to be reduced to as little as $15 billion on the public market. Most recently, CEO Adam Neumann’s reported partying and drug use came to light following a revealing WSJ report.

All of this came to a head on Tuesday afternoon. Neumann announced he would be stepping down as CEO and would continue as a non-executive chairman of the board. In a statement, Neumann said: “While our business has never been stronger, in recent weeks, the scrutiny directed toward me has become a significant distraction, and I have decided that it is in the best interest of the company to step down as chief executive.” WeWork’s Artie Minson, formerly co-president and chief financial officer, and Sebastian Gunningham, formerly vice chairman, have been named co-CEOs of the company.

In today’s CEO Daily, Fortune’s Alan Murray asks: So that raises the question: now that Neumann is no longer at the helm, what’s left?

That’s hard to say because we all remember that Neumann was presented as the company’s crown jewel in its IPO prospectus. The S-1 listed Neumann as a risk factor, noting that the company’s future success depends in large part on him continuing to serve as CEO, “which cannot be ensured or guaranteed.”

Neumann reportedly relinquished control after facing pressure from SoftBank’s Masayoshi Son—the man whose private equity backing fueled WeWork’s remarkable rise. Bloomberg’s Matt Levine wrote yesterday that sometimes journalists inadvertently become a character in the story. (He uses the example of how the opponents of Uber’s Travis Kalanick used the threat of leaking to the New York Times (i.e. Mike Isaac) as leverage to force him out.) Levine writes: “So if you’re a SoftBank executive who wants Neumann gone, persuading Son to fire him is good, but telling reporters that you’ve persuaded Son to fire him is even better.” 

It’s all so much to absorb, and frankly, I’m confused by some of the motivations here. If anyone can tell me what SoftBank/Son’s angle in all of this is, please feel free to write in. 

For more, read my colleague Rey Mashayekhi’s piece here: The Remarkable Rise—and Epic Fall—of WeWork’s Charismatic, Controversial Founder

VAPE NO MORE: Juul Labs CEO Kevin Burns will step down, as the highly valued private e-cigarette company faces a growing public backlash. The company said in a statement that K.C. Crosthwaite will be joining the company as CEO effective immediately. Crosthwaite previously served as chief growth officer at Marlboro maker Altria Group, which took a $13 billion stake in Juul last year.

Juul also said it has a new marketing strategy: It will suspend all TV, print and digital ads and it will stop some of its lobbying efforts. The company said it is committing to fully support and comply with any new federal policy related to vaping products. The FDA is currently weighing regulations to ban all flavored e-cigarettes. Read more.

POWER MOVE: President Donald Trump is in the midst of a battle that will define his presidency and the 2020 election. Speaker of the House Nancy Pelosi announced that Democrats would begin a formal impeachment inquiry into whether President Donald Trump “sought help from a foreign government for his reelection.”

Trump says he will publish an un-redacted and declassified transcript today of a phone call with Ukraine’s leader at the center of what Democrats allege is his abuse of presidential power. The White House is also planning to release to Congress a whistleblower’s complaint that triggered the week-long crisis that has rocked the Trump presidency. 

Regardless of what might be released by the White House, the Democratic caucus seemed squarely behind an impeachment inquiry. With Pelosi’s backing, that ultimately could lead to the full House voting on articles of impeachment at a to-be-determined point.

Will Pelosi’s gamble pay off? Too soon to know, but it was definitely a power move. Fortune just published its 25 Most Powerful Women in Politics with Nancy Pelosi front and center. Browse here.

COMSCORE FRAUD: The SEC charged Comscore and its former CEO Serge Matta with “engaging in a fraudulent scheme to overstate revenue by approximately $50 million and making false and misleading statements about key performance metrics.” As is common with such charges, Comscore neither admitted nor denied the charges, while still paying a fine. The company paid $5 million in penalties to settle fraud charges. Matta will also pay $700,000 in penalties and repay his former company $2.1 million for stock and other compensation he received. He will be barred for 10 years from serving as an officer or director of a public company. Read more.

Woof, ok, I’m tired. See you tomorrow. 


- AllinMD, a China-based digital orthopaedic hospital platform and online medical education company, raised $100 million in funding. Tencent and Sheares Healthcare Group co-led the round, and were joined by investors including Trustbridge Partners and WeDo Capital.

- Unbabel, a Lisbon, Portugal-based AI+human translation platform, raised $60 million in Series C funding. Point72 Ventures led the round.

- Klar, a Mexico-based banking alternative, raised $57.5 million in debt and equity seed funding. Quona Capital led the round, and was joined by investors including Santander Innoventures, Aspect Ventures, FJ Labs, and Western Technology Investment. 

- Sentry, a San Francisco-based provider of software error monitoring solutions, raised $40 million in Series C funding. Accel led the round, and was joined by investors including New Enterprise Associates.

- TigerGraph, a Mountain View, Calif.-based scalable graph database for the enterprise, raised $32 million in Series B funding. SIG led the round.

- Deliverr, a San Francisco-based provider of order fulfillment services, raised $23 million in Series B funding. GLP led the round, and was joined by investors including 8VC

- Eko, a Silicon Valley-based digital health company building machine learning tools to fight heart disease, raised $20 million in Series B funding. ARTIS Ventures led the round, and was joined by investors including DigiTx Partners, NTT Venture Capital, 3M Ventures, Mayo Clinic, Seraph Group, and XTX Ventures.

- Denovo, a Boulder, Colorado-based provider of managed IT services and enterprise resource planning consulting expertise, raised $18 million in funding. Investors include CIT Group

- ZenBusiness, an Austin, Texas-based provider of corporate entity creation and management services, raised $15 million in Series A funding. Investors include Greycroft, Lerer Hippeau, Revolution’s Rise of the Rest fund, Rosecliff Venture Partners, Interlock Partners and Recruit Strategic Partners.

- Kapwing, a San Francisco-based online image and video editing platform, raised $11 million in Series A funding. CRV led the round. 

- Fiddler Labs, a Mountain View, Calif.-based provider of an explainable AI engine, has secured $10.2 million in Series A funding. Lightspeed Venture Partners and Lux Capital led the round, and were joined by investors including Haystack Ventures and Bloomberg Beta.

- Crypto Quantique, a London-based cybersecurity company, raised $8 million in seed funding. ADV led the round, and was joined by investors including Entrepreneur First.

- Flipside Crypto, a Boston-based business intelligence firm for cryptocurrency and blockchain organizations, raised $7.1 million in funding. Galaxy Digital Ventures led the round.

- KNØX, a Canada-based provider of a digital asset custody service for institutions and fiduciaries with comprehensive insurance coverage, raised $6.2 million in funding. Initialized and iNovia led the round, and were joined by investors including Fidelity Investments Canada, FJ Labs and Ferst Capital.

- Flowcast, a San Francisco-based fintech startup that specializes in smart credit decisioning, raised $3 million in Series A funding. ING Ventures and Bitrock Capital co-led the round, and were joined by investors including Katalyst Ventures and Alpana Ventures.

- CyberFortress, a San Antonio, Texas-based insuretech startup focused on protecting e-commerce companies from cyber threats, raised $3 million in seed funding. Greycroft and LiveOak Venture Partners co-led the round.

- Cured, a San Francisco-based healthcare technology company, raised $2.5 million in seed funding. Waterline Ventures led the round, and was joined by investors including High Alpha Capital and Matchstick Ventures

- Cruisewatch, a Germany-based cruise travel startup, raised $1 million in funding. The investors were not named.


- Amphivena Therapeutics Inc, a South San Francisco-based developer of T cell engager therapeutics for cancer, raised $62 million in Series C funding. NanoDimension and Qiming Venture Partners USA led the round.

- SkinCure Oncology, a Chicago-based provider of treatments of non-melanoma skin care to dermatology patients, raised $30 million in funding, from Seacoast Capital.

- Kheiron Medical Technologies, a London-based applied science company focused on supporting cancer diagnostics with machine learning, raised $22 million in Series A funding. Atomico led the round, and was joined by investors including Connect Ventures, Greycroft, Hoxton Ventures and EXOR Seeds

- Nview Health, an Atlanta-based behavioral health solutions company, raised $4.65 million in funding, from BIP Capital.


- Inspire Brands Inc. will acquire Jimmy John’s Gourmet Sandwiches, a Champaign, Ill.-based sandwich chain. Financial terms weren't disclosed. Read more.

- Twin Point Capital LLC made an investment in Stealth Monitoring, a Dallas and Ontario-based provider of remote video monitoring solutions to residential, commercial and industrial businesses. Financial terms weren't disclosed. 

- Carroll Capital acquired Easy Speech Pathology, a Palm Desert, Calif.-based provider of board-certified speech therapy, occupational therapy, physical therapy, applied behavior analysis therapy and psychological services for both adults and children. Financial terms weren't disclosed. 

- Golden Gate Capital acquired Invo Holdings, a Jamison, Penn.-based provider of autism and childhood behavioral health services. Financial terms weren't disclosed. 


- Wealthsimple acquired SimpleTax, a Canda-based web-based tax preparation service. Financial terms weren't disclosed. 


- Saudi Aramco, the oil giant, is reported considering doubling its IPO size this year to 10% of the firm, the Wall Street Journal reports citing sources. Read more.

- TeamViewer, the German software firm, reached a valuation of $5.8 billion (5.25 billion euros). Read more.

- Peloton Interactive, the New York-based cycling equipment maker, now says current shareholder Technology Crossover Ventures (TCV) plans to acquire about 3.6 million shares for $100 million in a private placement—double its previous figure. The firm posted revenue of $915 million in the year ending June 2019 and loss of $245.7 million. TCV (6.7% post-offering), Tiger (19.8%), True Ventures (12%), and Fidelity (6.8%) back the firm. It plans to list on the Nasdaq as “PTON.” Read more.

- BioNTech, a German-based firm focused on cancer therapies, raised $251 million in an IPO of 13.2 million ADSs priced at $18 to $21 apiece. It posted a revenue of 127.6 million euros ($140.8 million), and posted losses of $47.7 million ($52.6 million) in 2018.  The Strüngmann family (50%) backs the firm. It plans to list on the Nasdaq as “BNTX.” Read more.

- BRP Group, a Tampa-based provider of insurance distribution, filed to raise $100 million in an initial public offering. The firm posted revenue of $79.9 million in 2018 and income of $2.7 million. It plans to list on the Nasdaq as “BRP.” Read more.


- Vantage Elevator Solutions, which is backed by Golden Gate Capital, agreed to acquire Thames Valley Controls, a U.K.-based provider of elevator control and monitoring solutions, from Dewhurst plc. Financial terms weren't disclosed. 


- Enhanced Healthcare Partners, a New York-based private equity firm, raised $300 million for its new fund. 

- Blue Delta Capital Partners, a McLean, Va.-based venture capital firm, raised $150 million for its new fund.


- G2VP named Monica Varman as an investor.

- Livingstone named Mark Birkett and Michael Jenny as partners. 

- Dean Olson joined ParkerGale Capital as an associate.