SoftBank plans to invest $100 million in startups with minority founders

Out of left field, SoftBank is perhaps the first among VCs to dedicate a large dollar amount to their words of support.

On Wednesday, the Japanese telecom giant announced a $100 million Opportunity Growth Fund that will invest solely in companies founded by people of color. A portion of the gains from the fund’s investments will be donated to organizations “focused on creating opportunities for people of color,” while half of gains will be reinvested into subsequent Opportunity Growth Funds.

“We know that the venture capital community and tech industry have long lagged on diversity and inclusion,” wrote SoftBank COO Marcelo Claure. “When it comes to diversity, SoftBank absolutely has to do better as an employer, investor, and partner.”

SoftBank does not plan to include a management fee or a carry, and the language of the letter suggests that the company may be looking to loop in additional investor: Claure stated that the $100 million will be the “initial” size of the fund and SoftBank will serve as the “primary” Limited Partner.

Claure will lead the fund as CEO alongside Shu Nyatta, a Managing Partner who works on SoftBank’s Latin America-focused Innovation Fund. SoftBank also brought on board two prominent black figures in tech, TaskRabbit CEO Stacy Brown-Philpot and founder of TechSquare Labs Paul Judge, to sit on the investing committee.

The news comes as venture capital firms have condemned racism following George Floyd’s death (Including the likes of Accel, Benchmark, First Round and Kleiner Perkins) and some investors say they are seeking black entrepreneurs.

SoftBank itself is facing turmoil—and carries a battered reputation in the venture community. The company has strained its relationships over the past year as it sought to shore up its Vision Fund holdings, scrapping agreements to buy WeWork stock from the likes of Benchmark Capital and even walking away from deals.

The most busiest time of the year: Warner Music Group priced its IPO early Wednesday, kicking off 2020’s busiest week for new listings with a total of eight companies set to go public, according to Renaissance Capital. The entertainment company raised $1.9 billion by offering 77 million shares priced at $25 apiece, the higher end of its $23 to $26 price range.

Early-morning timing of the pricing may seem odd, given IPOs generally price the night before, and that was a conscious decision. Had Warner priced on Tuesday, the news would have clashed with a pledge from the music industry to pause normal activities to express solidarity with those protesting the death of George Floyd.

Meanwhile, ZoomInfo is expected to trade Thursday.

VENTURE DEALS

- MGI Tech, an affiliate of Chinese genome sequencing company BGI Group, raised over $1 billion in Series B funding. IDG Capital led the round. Read more.

- Bohemia Interactive, a Czech Republic–based game developer, raised $260 million from Tencent for about 70% to 80% of the company, per the Information. Read more.

- Varo Money, the San Francisco-based digital bank, raised $241 million in Series D funding. Gallatin Point Capital and The Rise Fund led the round and were joined by investors including U2 lead singer Bono, and Jeff Skoll, HarbourVest Partners and Progressive Insurance.

- Nice Tuan, a Chinese e-commerce platform, raised $81.4 million in Series C1 funding. GGV led the round. Read more.

- Climeworks, a Switzerland-based company converting carbon dioxide from the air into a solid state, raised $76 million from undisclosed investors. Read more.

- Bigfoot Biomedical, Inc., a Milpitas, Calif.-based developer of therapy and telemedicine Solutions for those with Diabetes, raised $55 million in Series C funding. Abbott led the round and was joined by investors including existing investors Quadrant Capital Advisors, Senvest Capital, Janus Henderson and Cormorant Asset Management, along with new investors Smile Group.

- NodThera, a clinical stage biotech targeting diseases driven by chronic inflammation, raised $55 million (£44 million) in a Series B funding. Novo Ventures led the round and was joined by investors including Cowen Healthcare Investments, Sanofi Ventures, 5AM Ventures, F-Prime Capital, Sofinnova Partners and Epidarex Capital.

- LanzaTech, a Chicago-based biotech company and carbon recycler, raised $50 million in funding from Suncor Energy, All Nippon Airways, Mitsui & Co., and the US Department of Energy (grant).

- Tae Life Sciences, a Foothill Ranch, Calif.-based radiation therapy company, raised $30 million in Series B funding. Artis Ventures was among the investors.

- PlushCare, a San Francisco-based virtual primary care platform, raised $23 million in Series B funding led by Transformation Capital. GGV Capital, WTI, and others participated.

- Cutover, a London-based cloud-enabled work orchestration platform, raised $17 million in Series A funding from Barclays and Index Ventures.

- MessageGears, a provider of customer marketing solutions, raised $12 million in funding. Argentum and Bridge Bank led the round.

- Meditrina, Inc., a San Jose, Calif.-based women’s healthcare company, raised $10 million in funding. Deerfield Management Company led the round.

- Shorla Pharma, an Irish specialty pharmaceutical company, raised $8.3 million in Series A funding. Seroba Life Sciences led the round.

- Overjet, an Allston, Mass.-based startup using AI to help dentists and insurance companies understand dental scans, raised $7.9 million in seed funding from investors including the Harvard Innovation Lab. Read more.

- Tictrac, a London-based startup targeting employee wellness, raised £6m ($7.5 million) in funding led by Puma Private Equity. Read more.

- Vara, a Berlin-based AI company focused on breast cancer screening accessibility, raised $7 million in Series A funding. OMERS Ventures led the round and was joined by investors including Merantix, Think.Health, Soleria Capital, and Plug and Play.

- Poka, a Quebec-based connected worker platform for manufacturers, raised $6.4 million in funding led by SE Ventures.

- MySky, a New York-based AI-powered spend management platform designed for the private aviation industry, raised $5 million in funding. GMF Capital led the round and was joined by investors including Global Trading Group.

- Energysquare, a Paris-based wireless charging technology maker, raised €3 million ($3.4 million) in funding. Partech led the round.

- Re-Vana Therapeutics, a Belfast, Northern Ireland-based drug delivery company developing sustained-release therapeutics for ocular diseases, raised $3.3 million in pre-Series A funding. Investors included ExSight Ventures, Visionary Ventures, InFocus Capital Partners, TechStart Ventures, Clarendon Fund Managers and Qubis.

PRIVATE EQUITY

- Zip Co (ASX:Z1P) acquired QuadPay, a New York-based payment installment platform. Height Capital Management invested $130 million in convertible notes and warrants.

- GTCR took a 25% minority stake in CAPTRUST Financial Advisors, valuing the North Carolina-based company at $1.25 billion.

- WatchGuard Technologies, backed by Vector Capital and Francisco Partners, acquired advanced endpoint protection provider, Panda Security, an endpoint protection provider. Investing Profit Wisely will join as an investor in WatchGuard.

OTHERS

- Facebook’s WhatsApp and PayPal Holdings invested in Gojek, an Indonesian ride-hailing app operator as part of the company’s ongoing fundraising round. Financial terms weren't disclosed.

- Maven acquired Bright Parenting, a New York-based parenting app. Maven is backed by Icon Ventures, Sequoia Capital, and Oak HC/FT.

- Puig is nearing an acquisition of Charlotte Tilbury, the U.K.-based makeup brand. The deal could value the company at more than $1 billion, per Bloomberg. Read more.

- Carrefour agreed to buy food retailer Wellcome Taiwan from Dairy Farm, making it the number two player in Taiwan’s convenience stores market. The deal comes with an enterprise value of 97 million euros ($108.00 million). Read more.

- LVMH’s $16.2 billion takeover of Tiffany & Co could be on the rocks, per WWD. Read more.

IPOs

- DoubleDown Interactive, a South Korean developer of mobile and web-based games, filed for an $100 million IPO. It posted revenue of $273.6 million and income of $36.3 million in 2019. It plans to list on the Nasdaq as “DDI.” Read more.

- Playtika, an Israel-based mobile gaming company, is preparing for a U.S. IPO that could raise around $1 billion, per Reuters A group of Chinese investors including Giant Network Group and Yunfeng Capital (a private equity firm founded by Alibaba Group founder Jack Ma) acquired the company for $4.4 billion in 2016 from Caesars Interactive Entertainment. Read more.

- Pliant Therapeutics, a San Francisco-based Phase 2 biotech developing therapies for the treatment of fibrosis, raised $144 million in an offering of 9 million shares priced at $16. It posted revenue of $57.1 million in 2019 and loss of $631 million in 2019. Third Rock Ventures (32.3% pre-offering), Eventide Asset Management (9.3%), and Redmile Biopharma (7.8%) back the firm.. It plans to list on the Nasdaq as “PLRX.” Read more.

EXITS

- Cortec Group sold its stake in YETI Holdings, a maker of camping equipment. Financial terms weren't disclosed.

- Cerberus Capital Management sold its controlling stake in Dallas-based Steward Health Care back to the company. Financial terms weren't disclosed.

F+FS

- Ardian raised $19 billion of commitments.

- Francisco Partners closed on about $10 billion in capital commitments across three funds: Francisco Partners VI, a $7.45 billion equity fund; Francisco Partners Agility II, a $1.5 billion equity fund; and FP Credit Partners, a $750 million opportunistic credit fund.

- Team8 raised $104 million for Team8 Capital. Read more.

- C4 Ventures raised €80 million ($88 million) for “Fund II”. Read more.

- Brownstone Equity Partners secured $75 million of commitments for its debut fund.