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Happy Friday, Term Sheet readers. It’s been one heck of a week in unicorn debuts, with shares of Airbnb more than doubling in its first public trade Thursday.
Now valued at over $100 billion on a fully-diluted basis, even Airbnb CEO Brian Chesky couldn’t quite find the right words on live TV when told shares were gearing up to open at $139 (it ended up opening even higher at $146). “That’s the first time I’ve heard that number,” the chief executive started while on Bloomberg. “In April, when we raised money, and it was debt financing, that price would have priced us around $30. So I don’t know what to say, that is… I’m very humbled by it.”
And this is key: Chesky then cogently summed up the flip side of attaining such a high valuation: “The higher the stock price, the higher the expectations.” He’s right. No one wants to be the company whose stock was hyped during the IPO process but gets rebalanced after its first earnings call.
Of course, what happens beyond that is the question—not just for Airbnb, but for all of dealmaking. Tusk Ventures’ Bradley Tusk, known for helping startups with their regulatory issues, has a few thoughts on how 2021 may play out for tech and its legislative battles.
For his guest column, Tusk makes his predictions for how the tech community will grapple with the policy fights that await in 2021 (Disclosure: Tusk Ventures is invested in or works with companies that are impacted by these trends, including medical cannabis company Eaze and esports startup Kanga):
1. E-sports. States across the country will legalize mobile sports betting, e-sports betting and, casino and gaming expansions across the board. They desperately need the revenue in the pandemic. In good times, legislators worry about the political fallout of supporting gaming. In bad times, they know that gaming is a lot less painful than spending cuts or higher taxes.
2. Cannabis. States across the country will legalize recreational cannabis and reduce barriers to psilocybin use. Social norms are continuing to shift and again, states need the revenue. We may even be on a path on which drugs other than cannabis become legal, regulated, and sold commercially in the next 5 to 10 years.
3. Cities fight the tech exodus. Local hostility to tech startups will wane as the need to create jobs and tax revenue surpasses the political benefits of being anti-tech in cities like San Francisco, Seattle, and New York. The effects of startups leaving major tech hubs like San Francisco for climates that are friendlier to business (lower taxes, less regulation, less hostility) will start to be felt.
4. Congress. The Democratic-led House in Washington D.C. will take up new regulations on privacy (to create a U.S. version of the GDPR), antitrust, and worker classification. None will get through the Senate, even if the Democrats do win both special elections in Georgia, but Biden’s agencies (the Department of Labor, Department of Justice, and Federal Trade Commission) will look for administrative solutions.
5. Section 230. The repeal of Section 230 may actually make it through the entire legislative process. Democrats should want to repeal the protections afforded to social media platforms in Section 230 because Facebook has revolutionized how the political right organizes. Republicans are convinced that the platforms are biased against them and want revenge. Biden already supports a repeal. Betting on anything to ever actually happen in D.C. is probably a bad idea, but this really could.
6. Proposition 22. Prop 22‘s tailwinds will be strong. Labor groups will try to recreate the opposing California Assembly Bill 5—which would have required gig-economy companies to treat workers like employees—in states like New York, New Jersey, Massachusetts, Illinois, and Washington. And despite support from Democratic lawmakers, the momentum that spurred legislation in California will be blunted by Prop 22’s overwhelming victory at the polls. But lawmakers will continue pushing for legislation classifying gig workers as employees rather than the legalization of portable benefit plans that gig-economy companies have championed.
7. Flying cars. A city somewhere will promulgate flying car regulations. The technology is not there yet, but it’s coming, and the political benefit of being the first to tackle the issue will prove too enticing for some politicians not to pursue.
8. Drones. The impact of COVID-19 will propel delivery drone regulation to the forefront. Though surface transmission of COVID-19 is highly unlikely, the next pandemic could spread that way, and having ways to deliver packages without any risk will be appealing to voters and members of both parties. This could also give a boost to autonomous taxis.
9. Big Tech. The Biden Justice Department will seriously reconsider the antitrust prosecution of Google. Facebook is an easier target and the timing around Trump and Barr’s decision to go after Google (right before the election) is suspicious. With that said, it’s not impossible that the DOJ pursues multiple antitrust cases at once.
10. Ed tech. Even though remote schooling was difficult in most places, its existence (and failings) give a boost both to ed tech activity and funding, and to government interest in finding ways to better utilize technology. If there ever was a moment for an ed tech boom, this is it.
- Tempus, a Chicago-based company applying artificial intelligence to precision medicine company, raised $200 million in funding valuing it at $8.1 billion. Investors included Baillie Gifford, Franklin Templeton, Google, Novo Holdings, and T. Rowe Price.
- Cityblock Health, a Brooklyn, N.Y.-based healthcare provider for lower-income communities, raised $160 million in Series C funding. Investors included General Catalyst Wellington Management, Kinnevik AB, Maverick Ventures, Thrive Capital, and Redpoint Ventures.
- CHAI, a South Korean payments startup, raised $60 million in Series B funding. Hanhwa Investment & Securities led the round and was joined by investors including SoftBank Ventures Asia, SK Networks, and Aarden Partners. Read more.
- LeafLink, a New York-based marketplace for the cannabis industry, raised $40 million in Series C funding. Founders Fund led the round
- Turing, a Palo Alto, Calif.-based maker of an A.I.-based platform to help evaluate prospective engineers for remote teams, raised $32 million in Series B funding. WestBridge Capital led the round. Read more.
- Scale Computing, a Indianapolis-based edge computing company, raised $30 million in funding. Elevate Ventures led the round.
- Gorgias, a San Francisco-based customer service company, raised $25 million in Series B funding, valuing it at $300 million pre-money. Sapphire Ventures led the round and was joined by investors including SaaStr, Alven, Amplify Partners, CRV and Greycroft. Read more.
- Orbex, a U.K.-based maker of micro satellites, raised $24 million in funding. BGF and Octopus Ventures led the round and were joined by High-Tech Gründerfonds, Heartcore Capital and Elecnor S.A. Read more.
- Boast.ai, a San Francisco-based company automating the process of getting research and devleopment tax credits, raised $23 million in Series A funding. Radian Capital led the round.
- UserLeap, a San Francisco-based user research platform, raised $16 million in Series A funding. Accel led the round and was joined by investors including Elad Gil, Dylan Field, Ben Porterfield, Akshay Kothari, Jack Altman, and Bobby Lo.
- HomeLister, a Los Angeles-based digital brokerage for homeowners to list and sell their properties online, raised $4.5 million in seed funding. MetaProp and Homebrew invested.
- Cosmos Video, a London-based maker of virtual rooms for social gatherings, £2 million ($2.6 million) in seed funding. LocalGlobe led the round and was joined by investors including Entrepreneur First, Andy Chung, Phillip Moehring (AngelList), and Omid Ashtari (ex-President, Citymapper).
- Bioclinica, backed by Cinven, agreed to merge with ERT, a Philadelphia-based clinical trial tech company backed by Nordic, Astorg and Novo Holdings.
- Enhanced Healthcare Partners invested in Hallmark Health Care Solutions, a New York-based provider of physician compensation and workforce management software for health systems. Financial terms weren't disclosed.
- Hyundai Motor Group agreed to acquire a controlling stake in Boston Dynamics, a Waltham, Mass.-based robotics company, from SoftBank Group. The deal values the firm at about $1.1 billion.
- Wolters Kluwer Governance, Risk & Compliance agreed to acquire eOriginal, a Baltimore, Md.-based digital lending software company backed by LLR Partners for about $280 million.
- Twitter acquired Squad, a San Francisco-based video-chat app. Its investors included First Round, betaworks, and Halogen Ventures. Financial terms weren't disclosed.
- Norwest Equity Partners acquired Red Monkey Foods, a Springfield, Mo.-based provider of spices and seasoning, from San Francisco Equity Partners. Financial terms weren't disclosed.
- Quad-C Management acquired Learners Edge, an Eagan, Minn.-based maker of continuing education classes for teachers, from L Squared Capital Partners. Financial terms weren't disclosed.
- Gilead Sciences (Nasdaq: GILD) acquired MYR, a Germany-based biotech focused on developing treatments for chronic hepatitis delta virus, for about €1.2 billion ($1.4 billion).
- Next Insurance, backed by venture firms including Zeev and TLV, acquired Juniper Labs, a Denver-based underwriting technology firm focused on small businesses. Financial terms weren't disclosed.
- Certara, a Princeton, N.J.-based maker of biosimulation software, raised $668 million in an offering of 29.1 million shares (about 49% sold by existing shareholders). EQT Investor and Arsenal Investors back the firm. Read more.
- AbCellera Biologics, a Canadian drug discovery company working with Eli Lilly & Co. on its Covid-19 drug, raised the range of its offering. It now plans to raise $403 million in an offering of 23 million shares priced between $17 to $18 apiece. DCVC, Viking Global, and Peter Thiel back the firm. Read more.
- 4D Molecular Therapeutics, an Emeryville, Calif.-based maker of gene therapies, raised the range of its offering. It plans to raise $158 million via an offering of 7 million shares priced between $22 to $23. Viking Global and Pfizer back the firm. Read more.
- Nanobiotix, a French biotech developing cancer therapies, raised $99 million in an IPO of ADSs. Read more.
- EV Charged B.V., a French subsidiary of ENGIE that provides electric vehicle charging, will go public via merger with TPG Pace Beneficial Finance Corp., a SPAC formed by TPG valuing the company at $1.4 billion.
- Electric Last Mile, a Detroit-based electric vehicle company focused on last mile logistics, plans to go public via merger with Forum Merger III Corporation, a SPAC. The deal would value the combined firm at $1.4 billion.
- Lightning eMotors, a Loveland, Co.-based provider of charging docks for electric vehicles, plans to go public via merger with GigCapital3, a SPAC. The deal raised $125 million in gross proceeds including a commitment from BP Technology Ventures. The combined company has an approximate value of about $823 million.]
- Innoviz Technologies, an Israel-based maker of LiDAR sensors and software for autonomous driving, plans to go public via merger with Collective Growth Corporation, a SPAC. Antara Capital is leading a $200 million PIPE. The deal values the firm at $1.4 billion.
- WM Holding Company, a California-based marketplace for cannabis consumers and businesses,agreed to merge with Silver Spike Acquisition Corp., a SPAC. the deal values the firm at $1.5 billion.
- CBRE Acquisition Holdings, a SPAC formed by CBRE, raised $350 million.
- Sandbox Industries, a venture capital firm, Gretchen Hayes as managing director.