The Wave of Digital Media Consolidation Isn’t Over Yet: Term Sheet

This article originally ran in Term Sheet, Fortune’s newsletter about deals and dealmakers. Sign up here.

Group Nine, the digital media publisher, agreed to acquire PopSugar, the women’s lifestyle content company in an all-stock transaction. The deal reportedly values PopSugar at more than $300 million, and it will give its shareholders more than 30% ownership of the combined entity, according to The Wall Street Journal.

PopSugar had raised approximately $46 million in venture funding from investors including Institutional Venture Partners, Sequoia Capital, and NBCUniversal. 

Yes, there’s been a flurry of digital media mergers, but here’s an even more interesting pattern to note: 

— Group Nine buys PopSugar in an all-stock deal
— Vox Media buys New York Media in an all-stock deal
— Vice buys Refinery29 in an all-stock deal

The question in a stock deal is what someone else values the stock to be worth. And I mean, these valuations are eye-popping: PopSugar’s valued at $300 million, Refinery29 at $400 million, and New York Media at $105 million. 

The only way to know this is to either go public or to sell the company to someone else. So in other words, these valuations ultimately mean … Nothing. Why? Because it’s up to only Group Nine and PopSugar to make up the value. They are the only two companies who have to agree on value.

As CNBC’s Alex Sherman wrote, “The beauty of being a private company is you get to make up your own value when you’ve run out of investors to pump in more cash … Perhaps Vice thinks Refinery29 is actually worth $100 million and Refinery29 thinks Vice is worth $900 million. That’s OK. They just agreed to publicly inflate each other by 4x. The stock isn’t traded on a public exchange. At this point, while the relative values are meaningful, the overall value is virtually meaningless.” 

The question swirling in my mind is: How much would companies actually be worth to someone paying cold, hard cash? I think we all know the answer to that one, and it ain’t hundreds of millions of dollars.

A DEEP CUT: Masayoshi Son’s startups have had a rough few months, from a botched initial public offering by WeWork to a sharp decline in shares of Uber Technologies Inc. Now analysts are beginning to calculate that the damage for Son’s SoftBank Group Corp. will likely reach into the billions of dollars.

Mitsubishi UFJ Morgan Stanley Securities Co. cut its profit estimate for SoftBank’s Vision Fund, its main investment vehicle, by 580 billion yen ($5.4 billion) to an operating loss of 367.6 billion yen for the September quarter, citing declines in the stock prices of Uber and Slack Technologies Inc. and the withdrawn WeWork IPO. Sanford C. Bernstein & Co. estimates that Vision Fund’s writedown alone could be as much as $5.93 billion, with another $1.24 billion drop for the portion of WeWork owned by SoftBank Group.

Read more at Fortune.


- Oyo, an India-based hotel operator, is raising $1.5 billion as part of its Series F. Founder and CEO Ritesh Agarwal will contribute $700 million through RA Hospitality Holdings, a Cayman Islands investment firm said to be a joint venture between SoftBank and one or more financial institutions. Read more.

- SparkCognition, an Austin, Texas-based developer of AI-driven cyber-physical software solutions, raised $100 million in Series C funding. March Capital Partners led the round.

- RapidSOS, a New York-based emergency technology company, raised $55 million in funding. Energy Impact Partners led the round.

- Forward Networks, a Palo Alto, California-based network assurance and verification company, raised $35 million in Series C funding. Goldman Sachs led the round, and was joined by investors including Andreessen Horowitz, Threshold Ventures (previously DFJ Venture) and A. Capital. 

- Contentstack, a San Francisco-based provider of headless CMS technology for use by marketers, raised $31.5 million in Series A funding. Insight Partners led the round, and was joined by investors including Illuminate Ventures and GingerBread Capital.

- Celigo, a San Mateo, California-based integration platform as a service provider for both IT and business users, raised $20 million in Series B funding. NewSpring led the round with participation from Blossom Street Ventures and TVC Capital.

- Viola, a Los Angeles-based provider of cannabis products, raised $16 million in funding. Gotham Green Partners led the round.

- Tenfold, a company that integrates CRM and voice platforms for better customer information, raised $7.5 million in Series C funding. Next Coast Ventures led the round. Investors include Andreessen Horowitz, Geekdom Fund and Salesforce Ventures


- Carroll Capital LLC acquired Elevator Service LLC, a Grand Rapids, Michigan-based elevator services provider. Financial terms weren't disclosed. 


- BellRing Brands, a St. Louis-based protein powders and bars maker spinning off of Parent Post Holdings, plans to raise $525 million in an offering of 30 million shares priced at $16 to $19. The firm posted sales of $827.5 million and profit of $96.1 million in the year ending 2018. It plans to list on the NYSE as “BRBR.” Read more.

-, a Kazakh fintech group, withdrew postponed plans for a London listing that was expected to value the firm at about $5 billion, citing market conditions. Read more

- Q&K International Group, a Shanghai-based apartment rental platform in China, filed for a $100 million IPO. The firm posted revenue of $129.6 million in 2018 and loss of $72.8 million. It plans to list on the Nasdaq as “QK.” Read more.


- Shiseido Company agreed to acquire Drunk Elephant, a Houston, Texas-based skincare brand, for $845 million. Drunk Elephant had raised approximately $8.3 million in funding from investors including VMG Partners.

- Alteryx, Inc. (NYSE: AYX) acquired Feature Labs, a Boston-based data science software company that automates feature engineering for machine learning and artificial intelligence applications. Financial terms weren't disclosed. Feature Labs had raised approximately $1.5 million in venture funding from investors including Flybridge Capital Partners, 122West Ventures, and First Star Ventures.

- General Atlantic acquired a majority of Marathon Health, a Winooski, Vermont-based operator of worksite health centers. Financial terms weren't disclosed. Marathon Health had raised approximately $30 million in venture funding from investors including Goldman Sachs.


- One Equity Partners, a New York-based private equity firm, raised $1.75 billion for its seventh fund, One Equity Partners VII, L.P.                                    

- Sverica Capital Management, a Boston-based private equity firm, raised $450 million for its fifth private equity fund, Sverica Capital Partners V. 


- GTCR promoted Michael Hollander to managing director, and Stephen Master and KJ McConnell to principal.

- Carolyn Simmons joined CircleUp Growth Partners as a partner. 

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