How the struggle to get a flight refund helped grow this buzzy ‘robot lawyer’

Tried to cancel a flight in the past couple of months? The customer service was no doubt a nightmare.

Look to your right. Now look to your virtual left. Yours is an experience shared by many, if not most, as the pandemic has upended routines and left a spate of unwanted gym memberships, boarding passes, and concert tickets in its wake.

The struggle of getting a full refund has translated into growth for DoNotPay, the buzzy “robot lawyer” that, for a $3 a month subscription, helps customers parse through legalese to win refunds for cancelled flights or break up with their nearest sports club. 

DoNotPay announced today that investors led by Coatue Management closed on a $12 million Series A round in a mere two weeks over Zoom. Other investors including Andreessen Horowitz, Founders Fund, Felicis Ventures, and Day One Ventures participated, valuing the startup at about $80 million.

At its core, DoNotPay uses bots, hinging on the standardization of terms and conditions as well as laws, to send emails and letters to companies or government bureaus on behalf of the consumer, allowing it to expand into data privacy, robocallers, and even medical bills. The company has seen its user base surge several fold, from 10,000 to 20,000 subscribers before the coronavirus to over 50,000, says CEO and founder Joshua Browder.

As I wrote in my report on its Series A round, DoNotPay arbitrages the disconnect between what consumers know about their legal rights (often very little), and what companies tell them (sometimes even less). One example: Airline travelers complained early on about receiving vouchers instead of full refunds when the pandemic grounded flights indefinitely. Citing rules from the Department of Transportation that require airlines to issue refunds on nonrefundable fares, even in the event of a delay, DoNotPay sends messages via bots directly to the airline calling for full repayments.

Investors are betting the company’s fortunes will last beyond the pandemic: “There will always be consumer problems in the world for DoNotPay to solve,” says Matt Mazzeo, partner at Coatue. Read my full story here.

A SPAC whale: Hedge fund titan Bill Ackman is raising the largest SPAC, or special acquisition purpose company, ever. As a reminder, so-called SPACs raise proceeds through an IPO to acquire another company, with the amount raised representing a fraction of the actual value of the acquired company. Ackman’s Pershing Square Tontine Holdings could raise as much as $6.5 billion, according to a filing with the Securities and Exchange Commission. 

Which… leaves a pretty small universe of companies it could try to take public. The company’s filing cites some potential candidates. Specifically, it points to “large, high-quality, private family-owned companies” and “private equity portfolio companies” whose cash flows have been negatively impacted by the coronavirus. Perhaps the most interesting of all is that the filing also cites “mature unicorns” as a potential target. Ackman is known for investing in profitable companies. This also isn’t his first blank check rodeo: Pershing Square a co-sponsor of Justice Holdings, a SPAC that acquired Burger King for $1.4 billion in cash in 2012.

Lucinda Shen
Twitter: @shenlucinda
Email: lucinda.shen@fortune.com

VENTURE DEALS

- Indigo Ag, a Boston-based agtech startup, raised $300 million in Series F funding, per Axios. Investors include Riverstone Holdings,Flagship Pioneering, and Alaska Permanent Fund. Read more.

- Cedar, a New York-based patient engagement and financial technology company, raised $77 million in Series C funding. Andreessen Horowitz led the round. JP Morgan also provided $25 million in debt. Read more.

- Swile, a French-based employee rewards and benefits company, raised €70 million in Series C funding. Index Ventures led the round and was joined by investors including Bpifrance and Idinvest.

- Somatus, a McLean, Va.-based kidney care company, raised $64 million in Series C funding. Longitude Capital led the round and was joined by investors including Optum Ventures, Deerfield Management Company, Blue Venture Fund, Flare Capital, and Town Hall Ventures.

- Canva,  a Sydney-based design platform, raised $60 million in funding valuing it at $6 billion. Investors included Bond, General Catalyst, Sequoia Capital  China, Felicis Ventures and Blackbird Ventures .

- Immuta, a Maryland-based data privacy startup, raised $40 million in Series C funding. Intel Capital led the round. Read more.

- BrightInsight, a San Jose, Calif.-based provider of a digital health platform for biopharma and medtech, raised $40 million in Series B funding. Insight Partners led the round and was joined by investors including New Leaf Venture Partners and Eclipse Ventures.

- Cazoo, a U.K.-based used car platform, raised £25 million in funding, valuing the firm at over $1 billion. Investors include Draper Esprit, DMG Ventures, and General Catalyst.

- Rasa Technologies, a San Francisco and Berlin-based maker of an infrastructure layer for conversational AI, raised $26 million in Series B funding. Andreessen Horowitz led the round and was joined by investors including the firm’s Cultural Leadership Fund, Accel, 468 Capital, Basis Set Ventures, and Mango Capital.

- Nylas, a San Francisco-based provider of communications APIs for developers, raised $25 million in Series B funding. 8VC and Round13 Capital led the round and was joined by investors including Spark Capital, ScaleUP, and Slack Fund.

- EasyKnock, a New York-based residential sale-leaseback company, raised $20 million in funding. Blumberg Capital and QED Investors co-led the round and were joined by investors including FJ Labs, Correlation, Moderne, 7BC and Interplay.

- Foldax, a Salt Lake City, Ut.-based heart valve maker, raised $20 million in Series D funding.

MemorialCare Innovation Fund led the round, with Angel Physicians Fund and Sayan Bioventures joining as new investors.

- Third Wave Automation, a Union City, Calif.-based machine learning and robotics company, raised $15 million in Series A funding. Innovation Endeavors led the round and was joined by investors including Eclipse Ventures, Homebrew VC, Toyota AI Ventures, and Heartland VC.

- Urjanet, an Atlanta-based utility account aggregator, raised $14.7 million in Series D funding. Investors include Equifax, Oak HC/FT, Pete Kight, Grotech Ventures and Correlation Ventures.

-  Celsius Network, London-based interest earning platform, raised $10 million in funding from Tether.

- Quidnet Energy, a Houston-based company storing water beneath ground under pressure, raised $10 million in Series B funding. Investors include Breakthrough Energy Ventures, Evok Innovations, Trafigura, and The Jeremy and Hannelore Grantham Environmental Trust.

- Armored Things, a Boston-based crowd intelligence software company, raised $7 million in additional seed funding. Will Ventures led the round and was joined by investors including Splunk, Glasswing Ventures, iNovia, and MassVentures.

- optimize.health, a Seattle-based healthcare platform for provider reimbursements, raised $3.5 million in seed funding from Bonfire Ventures.

- Todyl, a Denver, Colo.-based security, networking and compliance company for distributed workforces, raised $2.3 million in seed funding. Investors include TechOperators and Blu Venture Investors.

- Heka, a London-based employee benefits provider formerly known as GoSweat, raised £1 million ($1.3 million) in pre-seed funding. Playfair Capital led the round.

- Barion Payment, a Budapest-based payments firm, raised €2 million ($2.3 million). Financial Services Capital invested.

PRIVATE EQUITY

- Varsity Brands, a Dallas-based sports retailer backed by Bain Capital, raised $185 million from new and existing investors. 

- MHC Software, backed by Strattam Capital, acquired Ecrion Software, a Rockville, Maryland-based customer automation platform. Financial terms weren't disclosed.

- Intermediate Capital Group took a minority stake in Workhuman, a Framingham, Mass. and Dublin-based social recognition and performance management platform. The transaction values Workhuman at $1.2 billion.

- Appfire, backed by SilverSmith Capital, acquired Botron Software, a Bulgaria-based provider of tools for configuration management within Jira. Financial terms weren't disclosed.

- PDFTron Systems, backed by Silversmith Capital, acquired ActivePDF, a California-based provider of server-side PDF automation components. Financial terms weren't disclosed.

- Redwire, backed by AE Industrial Partners, acquired Made In Space, a Jacksonville, Fla.-based provider of space manufacturing technologies. Financial terms weren't disclosed.

OTHERS

- Invitae (NYSE: NVTA) acquired and ArcherDX, a Boulder, Colo.-based genomics analysis company for up to $1.4 billion. ArcherDX previously filed for an IPO.

- SoftBank Group is unloading part of its stake in T-Mobile U.S., the wireless carrier, in a $21 billion deal. Read more.

IPOS

- nCino, a Wilmington, Mass.-based cloud-based software for financial institutions, filed to raise $100 million. It posted revenue of $138.2 million in the year ending Jan. 2020, and a loss of $27.6 million. Investors include Insight Partners (46.6% pre-offering), Salesforce (13.2%), and Wellington Management (9.5%). It plans to list on the Nasdaq as “NCNO.” Read more.

- F45 Training, a provider of group fitness classes backed by Mark Wahlberg, is in talks to go public by merging with SPAC Crescent Acquisition Corp., per Bloomberg. The company is expected to be valued at under $1 billion. Read more.

- Allegro, a Polish online auction site, is preparing for an IPO later this year that could value the business at about 10 billion euros ($11.2 billion), per Bloomberg. Cinven, Permira, and Mid Europa Partners back the firm. Read more.

EXITS

- Microsoft (MSFT: NASDAQ), acquired CyberX, a Boston, Mass.-based IoT security company. CyberX investors included Norwest Venture Partners and Qualcomm Ventures. Financial terms weren't disclosed.

- ServiceNow (NYSE: NOW) agreed to acquire Sweagle, a Belgium‑based configuration data management company. Sweagle investors included xAnge Private Equity. Financial terms weren't disclosed.

- Lightyear Capital agreed to acquire an indirect controlling stake in Health Plan One, an online marketplace for Medicare insurance. from Peloton Equity and other individual investors.  Financial terms weren't disclosed.

F+FS

- Omega Venture Partners plans to raise $100 million for its first fund. Read more.