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Does ‘the customer is always right’ mean ignoring racism?

August 18, 2020, 2:53 PM UTC

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You’ve most certainly heard this motto: “The customer is always right.” Heck, startups have taken the practice to even greater heights.

But what’s a company to do when a customer behaves in a way that is racist—for example, applying blackface with makeup while in store?

In the case of Glossier, the $1.2 billion makeup startup, former employees are now speaking out and accusing the company of not doing enough to address such racial microaggressions from customers. They told my colleague Emma Hinchliffe that the business created “a culture of deference to the customer at the cost of all else.”

In the blackface incident, managers did not confront the customers directly, but later told Black associates to “take a break,” according to employees interviewed by Emma. That incident is among multiple examples of racial microaggression that a number of ex-employees say they experienced at the hands of customers, but allege management never addressed directly with them. 

Racial inequality has been front and center in recent months, with many companies acknowledging that current standards are inadequate. Glossier too joined in on the chorus, committing $1 million to support causes related to racial justice. But the former employees say they hope to see changes in-house first before the startup looks outside. “We’re not trying to cancel Glossier,” they said.

Glossier, for its part, apologized on Instagram yesterday, and released new policies it plans to enact following an open letter from over 50 ex-employees who were laid off after Glossier closed its physical stores. Read more.

BIG BIG TECH NEWS: Amazon.com is in “preliminary talks” to invest in Rackspace Technology, a cloud services provider, per sources cited by Reuters. Rackspace, which trades on the Nasdaq and is backed by Apollo Global Management, is currently valued at about $3.8 billion. Read more.

The news comes after Google invested in another Apollo-backed company, home security firm ADT, earlier this month. 

Meanwhile, although Microsoft is the frontrunner to acquire the U.S. operations of social media company TikTok, Oracle has reportedly also thrown its name into the ring

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

VENTURE DEALS

- Robinhood, the popular stock trading app, raised $200 million in Series G funding from D1 Capital Partners. The startup is now valued at $11.2 billion. Read more.

- Keeper Security, a Chicago-based cybersecurity platform, raised $60 million in funding.first funding from Insight Partners.

- Attabotics, a Canadian 3D robotics supply chain company, raised $50 million in Series C funding. Ontario Teachers’ Pension Plan Board led the round and was joined by investors including Honeywell. 

- Tango Therapeutics, a Cambridge, Mass.-based biotechnology company focused on targeted cancer therapies, raised $50 million in funding. Casdin Capital led the round and was joined by investors including Boxer Capital, Cormorant Asset Management, and Gilead Sciences.

- Aerin Medical, an Austin-based maker of non-invasive medical procedures for nasal conditions, raised $48 million in funding. Questa Capital led the round and was joined by investors including OrbiMed and CK Group. Read more.

- Weee!, a Fremont, Calif.-based Asian groceries delivery startup, raised $35 million in Series D funding led by DST Global. Read more.

- Dutchie, a Bend, Ore.-based ecommerce solution for cannabis dispensaries, raised $35 million in Series B funding. Investors include Casa Verde Capital, Thirty Five Ventures,  Thrive Capital, Gron Ventures, and Former Starbucks Chairman and CEO, Howard Schultz

- Seated, a New York-based restaurant rewards platform raised $30 million in funding and acquired digital event booking platform VenueBook. Insight Partners led the round and was joined by investors including Craft Ventures, Greycroft, and Rho Capital Partners,

- SpyCloud, an Austin-based anti-fraud platform, raised $30 million in Series C funding. Centana Growth Partners led the round and was joined by investors including M12, Altos Ventures, Silverton Partners, and March Capital Partners.

- Movable Ink, a New York-based brand personalization company, raised $30 million in Series C funding from Contour Venture Partners, Intel Capital and Silver Lake.

- Bridge Connector, a Nashville-based interoperability company for health care, raised $25.5 million in Series B funding. Axioma Ventures led the round and was joined by investors including Jeff Vinick.

- PowerPollen, a Ankeny, Iowa-based agricultural pollination startup, raised $13 million in Series B funding. Ag Ventures Alliance led the round and was joined by investors including Iowa Corn Growers Association. Read more.

- Hiretual, a Mountain View, Calif.-based AI recruitment software maker, raised $13 million in Series B funding. Oceanpine Capital led the round.

- Lana, a Madrid-based fintech for underbanked population in Latin America, raised $12 million in Series A funding. Base10 Partners led the round and was joined by investors including Cabify and VC Cathay Innovation.

- Cyware, a New York-based cybersecurity startup, raised $10 million in Series A funding. Prelude Fund and Tanium led the round and was joined by investors including Emerald Development Managers and Great Road Holdings

- Claimsforce, a Hamburg-based insurtech company, raised €7 million ($8.3 million) in Series A funding. Notion Capital led the round and was joined by investors including Fly Ventures, Point Nine, and La Famiglia

- Lemon Perfect, a Lemon Grove, Calif.-based cold-pressed lemon water brand, raised $6.6 million in funding. Investors included Beechwood Capital, The Big Squeeze, Goat Rodeo Capital, LivWell Ventures, Melitas Ventures, R3 Venture Partners, the RCV Frontline Fund, the Stage 1 Fund, and Skyview Capital.

- HelloTeam, a Boston-based performance management and employee engagement platform, raised $3.5 million in seed funding. Underscore VC led the round and was joined by investors including Osage Venture Partners and Ventureforgood.

- Warmly, a San Francisco-based CRM system startup, raised $2.1 million in seed funding. NFX led the round and was joined by investors including Y Combinator, Matchstick Ventures, Scribble Ventures, Sequoia Capital, and 20VC. Read more.

- Spenmo, a Singapore-based fintech founded by former Grab executive Mohandass Kalaichelvan, raised $2 million in seed funding. Investors include Y Combinator, Rocket Internet, Iterative Capital and angel investors from XA Network. Read more.

- The Nudge, a San Francisco-based SMS-based planner, raised $2 million from Lightspeed Venture Partners and NextView Ventures.

- Birdie, a Palo Alto, Calif.-based technology company for CPG market research, raised $1.6 million in seed funding. ASTELLA led the round.

PRIVATE EQUITY

- Rusmar, a subsidiary of a Palo Duro Capital portfolio company, acquired NCM Odor Control, a Broadheadsville, Pa.-based odor neutralizers and perimeter control systems. Financial terms weren't disclosed.

- Bain Capital won a deal to acquire Nichiigakkan Co. (T: 9792), a Japanese nursing home operator, for $1.2 billion after Baring Private Equity Asia (BPEA) made a counter offer valuing it at $1.4 billion. 

- Capital Waste Services, backed by Kinderhook Industries, acquired Superior Sanitation, a South Carolina-based residential waste collection company. Financial terms weren't disclosed.

- Apollo Global Management and Big Lots called off takeover talks after the latter agreed to sell and lease some of distribution centers to Oak Street Real Estate Capital, per Bloomberg. Read more.

- Supply Chain Services, a portfolio company of Sole Source Capital, acquired Dasco Label, a Blaine, Minn.-based provider of custom labels, imprinting, serialization, and barcoding services. Financial terms weren't disclosed.

OTHERS

- Sanofi acquired Principia Biopharma, a late-stage biopharmaceutical company, for $3.4 billion. 

- Diageo will acquire Aviation Gin, the spirits maker from Ryan Reynolds, for up to $610 million over a 10-year period. Read more.

IPOS

- one, a tech-focused blank check company founded by Eventbrite Co-Founder Kevin Hartz, raised $200 million in an IPO of 20 million units priced at $10.00 apiece. Read more.

- Academy Sports + Outdoors, a Houston-based sports retailer, filed confidentially for an IPO. KKR backs the firm. Read more.

- Canoo Holdings, a maker of electric vehicles, agreed to go public via merger with Hennessy Capital Acquisition Corp. IV (NASDAQ: HCAC), a SPAC. the merger is valued at about $2.4 billion.

- Starboard Value Acquisition Corp., a blank check company formed by Starboard Value, filed to raise $300 million in an IPO of 30 million units at a price of $10.00 per unit. Read more.

EXIT

- American Express (NYSE: AXP) agreed to acquire Kabbage, an Atlanta, Ga.-based financial technology company providing loans to small businesses. Financial terms weren't disclosed.

- Reliance Industries is in talks to buy Urban Ladder, an online furniture retailer backed by Sequoia Capital India, and Milkbasket, a milk delivery firm backed by Blume Ventures, the Times of India newspaper reported. Read more.

F+FS

- Lightspeed Venture Partners closed its third India-focused fund with $275 million in commitments.

- Berkshire Partners is seeking $6.5 billion for its tenth mid-market fund, per the Wall Street Journal. Read more.

- Sixth Street Partners raised another $10 billion for its flagship private capital fund for a total of $22.5 billion, per the Wall Street Journal. Read more.

PEOPLE

- Bessemer Venture Partners promoted Connor Watumull to vice president.