This is the web version of Term Sheet, a daily newsletter on the biggest deals and dealmakers. Sign up to get it delivered free to your inbox.
Only in 2021.
In recent days, Reddit users have driven up shares of much-shorted stocks, especially those of GameStop, a video game retailer. They squeezed hedge funds and enabled massive losses for the likes of Steve Cohen and Dan Sundheim.
Now, stock-trading apps such as Robinhood have paused purchases on such shares.
“We continuously monitor the markets and make changes where necessary. In light of recent volatility, we are restricting transactions for certain securities to position closing only, including $AMC, $BB, $BBBY, $EXPR, $GME, $KOSS, $NAKD and $NOK. We also raised margin requirements for certain securities,” Robinhood revealed in a blog post on Thursday, referencing shares of AMC Entertainment, BlackBerry, Bed Bath & Beyond, Express, GameStop, Koss Corp., Naked Brand Group, and Nokia.
Interactive Brokers and TD Ameritrade have also placed restrictions on the trading of BlackBerry and GameStop shares.
The stock-trading companies are facing the same existential question social-media companies are contending with. One has the ability to destabilize an election, another, the stock market. It’s speculated that the recent market volatility is a result of hedge funds selling off shares to cover short positions that are in danger due to the latest rallies.
But Robinhood, in particular, has made a name for itself by emphasizing the democratization of access to finance. Its decision to curtail trades on GameStop has elicited cries of outrage on social media. “Maybe maybe don’t hedge (lol) your entire brand on the promise of “democratizing finance for all” if you’re not going to do that in the single moment that matters most,” one Twitter user wrote following the news of Robinhood’s decision.
How will regulators respond in this new era of the internet? President Joe Biden is expected to take a tougher look at regulating misinformation on social-media platforms, and the GameStop saga is fanning claims of market manipulation in what some view as a pump-and-dump scheme. In a characteristically vague message released Wednesday, the Securities and Exchange Commission said it was aware of the ongoing volatility and was “working with our fellow regulators to access the situation.”
The market is a mess, yes. But in much of the media, the story has been distilled into a fight between the wealthy and the average man. It certainly misses out on the fact that the run in GameStop shares has also been supported by big investors who will gain quite a bit financially.
Still, in this new age, I wonder whether the SEC may find itself at the center of a trickier case than it seems.
ROBERT DOWNEY JR HAS A ROLLING FUND: Robert Downey Jr., famous for his lead role in the Avengers series, is launching venture-capital funds focused on environmentalism and sustainability. Read more.
VENTURE DEALS
- Loanpal, a lender for residential solar installations, raised $800 million. NEA and WestCap Group led the round and were joined by investors including Brookfield Asset Management and Riverstone Holding.
- Nubank, a Brazilian neobank, raised $400 million in Series G funding, valuing it at $25 billion. GIC, Whale Rock, and Invesco led the round.
- ShipMonk, a Fort Lauderdale, Fla.-based e-commerce company, raised $65 million. Periphas Capital led the round.
- Aspiration, a California-based sustainable financial firm, raised $50 million. Investors included Deep Field Asset Management and AGO Partners.
- Nuvalent, a Cambridge, Mass.-based biotech focused on cancers, raised $50 million in Series A funding. Deerfield Management led the round.
- Sitetracker, a Palo Alto, Calif.-based infrastructure tech company, raised $42 million in additional funding. H.I.G. Growth Partners led the round and was joined by investors including Energize Ventures, New Enterprise Associates, National Grid Partners, Wells Fargo Strategic Capital, and Salesforce Ventures.
- Literati, an Austin-based subscription book service, raised $40 million in Series B funding. Aydin Senkut of Felicis Ventures led the round and was joined by investors including Dick Costolo and Adam Bain of 01 Advisors, Founders Fund, General Catalyst, Shasta, Silverton Partners, Springdale Ventures, and Stephen Curry. Read more.
- Lynk, a Hong Kong-based knowledge networking company, raised $24 million. Brewer Lane Ventures and MassMutual Ventures led the round and were joined by Alibaba Entrepreneurs Fund. Read more.
- Ula, an Indonesia based e-commerce startup, raised 20 million in Series A funding. Quona Capital and B Capital Group led the round.
- Starship Technologies, a San Francisco-based autonomous delivery service, raised an additional $17 million. Investors include TDK Ventures and Goodyear Ventures.
- Classiq, a Tel Aviv-based quantum algorithms and applications company, raised $14.5 million in funding. Team8 and Wing Venture Capital led the Series A round while the $4 million seed round came from Entrée Capital.
- Concert Health, a San Diego, Calif.-based behavioral health medical group, raised $14 million in Series A funding. Vertical Venture Partners led the round and was joined by investors including Town Hall Ventures, Silicon Valley Bank, Healthy Ventures, and Clearvision Equity.
- Raydiant, a San Diego-based digital signage company, raised $13 Million in Series A funding. 8VC and Atomic co-led the round and were joined by Mark Wahlberg, Delta Zulu, Gaingels, and BN Capital by Lerer Hippeau.
- SamCart, an Austin-based maker of an e-commerce platform, raised $10 million in Series A funding. TTV Capital led the round and was joined by investors including Fin VC and George Kaiser Foundation.
- Pinecone, a San Mateo, Calif.-based startup for building machine learning applications, raised $10 million in seed funding Wing Venture Capital led the round. Read more.
- LottieFiles, a San Francisco and Kuala Lumpur-based company for animations, raised $9 million in Series A funding. M12 led the round and was joined by investors including 500 Startups. Read more.
- Talent Hack, a Miami-based platform for fitness instructors, raised $4.7 million in funding. Global Founders Capital led the round and was joined by investors including The Fund and Rick Stollmeyer (Founder of Mindbody Online).
- ARMO, a Tel Aviv-based cybersecurity company, raised $4.5 million in seed funding from Pitango First.
- Ctrl IQ, a Berkeley, Calif.-based company focused on cloud computing, raised $4 million in Series A funding. OpenDrives and IAG Capital Partners invested.
- Doorvest, a San Francisco-based real estate investing platform, raised $2.5 million in seed funding. Mucker Capital led the round.
- Social Auto Transport, a Richmond Va.-based a gig economy platform for moving cars on behalf of automotive companies, raised $1.5 million. Overline led the round.
PRIVATE EQUITY
- Peraton, a portfolio company of Veritas Capital agreed to acquire Perspecta (NYSE: PRSP), a Chantilly, Va.-based U.S. government services provider, for about $7.1 billion.
- LLR Partners, NewSpring Capital and PNC Bank invested $180 million in SparkPost, a Columbia, Md.-based email marketing company.
- AE Industrial Partners acquired UAV Factory, a drone surveillance company. Financial terms weren't disclosed.
- Apollo Global Management agreed to acquire the Aluminum Can and Aluminum Rolling Businesses from Showa Denko K.K., Japanese producer of functional chemicals and industrial materials. Financial terms weren't disclosed.
- ASG, backed by Alpine Investors, acquired Visual Matrix, a Richardson, Texas-based provider of hotel property management software. Financial terms weren't disclosed.
- Nordic Capital agreed to acquire Advanz Pharma Corp, a European specialty pharmaceutical company. Financial terms weren't disclosed.
- Shamrock Capital acquired Bayard Advertising, a New York-based recruitment marketing company. Financial terms weren't disclosed.
- Shore Capital Partners invested in Tandem Family of Companies, a Westchester, Ill.-based group of human resources and benefits companies. Financial terms weren't disclosed.
- SSP Innovations, backed by Warren Equity Partners, acquired 3-GIS, a Decatur, Ala.-based IT services and software company focused on the telecom industry. Financial terms weren't disclosed.
OTHER
- A consortium led Sinopharm plans to take China Traditional Chinese Medicine Holdings, a Hong Kong listed traditional chinese medicine company, private in a deal in a deal valued at about $3.3 billion, per Reuters. Read more.
- Ant Group plans to sell EyeVerify, its U.S.-based biometric security firm, per the Financial Times. Read more.
IPOs
- Squarespace, the New York-based website hosting company, filed confidentially for an IPO. Read more.
- InPost, the Polish locker company, raised €2.8 billion euros ($3.4 billion) for shareholders in its Amsterdam debut. Investors include Advent International. Read more.
– Shoals Technologies Group, a Portland, Tenn.-based provider of products for solar projects, raised $1.9 billion in a sale of 77 million shares (88% from existing shareholders) priced at $25 apiece. Oaktree backs the firm. Read more.
- loanDepot, a Foothill Ranch, Calif.-based mortgage and loan provider, plans to raise $300 million in an offering of 15 million shares (37% sold by existing shareholders) priced between $19 to $21. Parthenon Capital backs the firm. Read more.
SPAC
- 23andMe, a Sunnyvale, Calif.-based gene testing company, is in talks to go public via merger with Richard Branson’s VG Acquisition Corp. in a $4 billion deal, per Bloomberg. Read more.
- Faraday Future, a Los Angeles-based electric car maker, agreed to merge with Property Solutions Acquisition Corp., a SPAC. The deal values the business at $3.4 billion.
- Playstudios, a Burlingame, Calif.-based games studio, is in talks to merge with Acies Acquisition Corp., a SPAC, per Bloomberg. Read more.
- Gores Holdings VIII, a SPAC from the Gores Group, filed to raise $300 million. Read more.
- Constellation Acquisition I, a SPAC led by a former Alcoa CEO, raised $300 million. Read more.
F+FS
- GGV Capital, a venture firm investing in primarily both China and the U.S., raised $2.5 billion across four new funds. Read more.
