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You know the story by now: A band of retail traders helped send shockwaves through the stock market in recent weeks by taking bets traditional investors would consider absurd. Shares of video game retailer Gamestop at one point hit $347 apiece after languishing in the upper teens just weeks earlier.
Now, the social media platform that housed the community that started it all has doubled its valuation.
On Monday, Reddit announced it raised $250 million in funding, valuing the company at $6 billion. Last valued at $3 billion in 2019, the latest round of funding is led by Vy Capital.
The new round of funding comes as Reddit sits at the center of a few big themes here:
A. Communication has moved online as a result of the pandemic.
B. Private market investors in recent months have warmed to social media investments (ahem, Clubhouse).
C. Stay-at-home orders and the recent Gamestop saga have fueled a spike in stock trading, and therefore, attracted millions more users to Reddit’s infamously irreverent r/WallStreetBets community.
Many source the beginnings of the Gamestop rally to posts from r/WallStreetBets users that have inflicted painful losses to hedge funds shorting the games company. While shares of Gamestop are now coming down to earth at about $50 apiece, the former rally’s impact has been far from negligible. No, the story may not be the cut and dry David vs. Goliath, retail trader vs. Wall Street narrative that was woven early on, since many bigger investors also have gained from the stock market action. But the bottom line remains: Smaller traders have shown the ability to move the market.
As for Reddit, the incident translated into “millions of new users as well as new advertisers,” according to the Wall Street Journal citing CEO Steve Huffman. So significant was the incident that Reddit even alluded to the Gamestop saga in its five-second, all-text Super Bowl ad. “Big game spots are expensive, so we couldn’t buy a full one,” the ad showed. “One thing we learned from our communities last week is that underdogs can accomplish just about anything when they come around a common idea.”
Also according to the Journal, Huffman says Reddit plans to use the new funding to invest in areas including “video, advertising and consumer products, as well as to expand into international markets.” Last year, the company acquired a video and meme sharing app, Dubsmash.
ROBOTS IN THE KITCHEN: Food delivery company DoorDash (NYSE: DASH) will acquire Chowbotics, a maker of a salad-assembling robot, for an undisclosed sum. Previously backed by investors including TechStars, Chowbotics’ acquisition is certainly a sign that DoorDash believes that its future isn’t just about the delivery side of things, but also some degree of automation within the preparation too.
Lucinda Shen
Twitter: @shenlucinda
Email: lucinda.shen@fortune.com
VENTURE DEALS
- Branded E-Commerce Group, a New York-based investor and buyer of marketplace brands, raised $150 million. Target Global co-founded the company and led the round. Investors also included Declaration Partners, Tiger Global, Kreos Capital, Lurra Capital, Regah Ventures, Kima Ventures, and Vine Ventures.
- Clear, a New York City-based biometrics startup, raised $100 million. Investors included Enlightened Hospitality Investments, The Partnership Fund for New York City, and 32 Equity.
- RapidSOS, a New York-based emergency response services platform, raised $85 million in Series C funding. Insight led the round. Read more.
- Jüsto, a Mexico City-based online grocer, raised $65 million in Series A funding. General Atlantic led the round and was joined by investors including Foundation Capital and Mountain Nazca.
- Evolve BioSystems, a Davis, Calif.-based probiotics company, raised $55 million in Series D funding. Cargill and Manna Tree led the round.
- Fabric, a Bellevue, Wash.based maker of a commerce platform, raised $43 million in Series A funding. Norwest Venture Partners led the round and was joined by investors including Redpoint Ventures and Sierra Ventures.
- Symend, a Canadian maker of debt recovery software, raised $43 million in extended Series B funding. Inovia Capital led the round.
- Isotropic Systems, a London-based developer of broadband terminal tech, raised around $40 million via grant and equity funding. SES led the round and was joined by investors including Orbital Ventures, the U.K. government’s Future Fund, Boeing HorizonX Global Ventures, Space Angels, and Firmament Ventures.
- Getaway, a Brooklyn, New York-based outdoor and wellness focused hospitality company, raised $41.7 million in Series C funding. Certares led the round.
- Koa Health, a Barcelona-based mental healthcare provider, raised €30 million ($36 million) in Series A funding. Wellington Partners Life Sciences and Ancora Finance Group led the round and were joined by MTIP and Akilia Partners.
- Monte Carlo, a San Francisco-based data reliability company, raised $25 million. Repoint Ventures and GGV Capital led the round and was joined by investors including Accel.
- HousingAnywhere, a Netherlands-based rental marketplace for young professionals and international students, raised €24 million ($29 million) in Series C funding. Investors include Ergeny Investments, VNV Global, and Real Web. Investor henQ Capital sold its stake.
- Infinitus, a San Francisco-based robotic process automation startup, raised $21.4 million. Coatue and Kleiner Perkins and was joined by investors including Gradient.
- SplashLearn, a San Francisco-based edtech using games as curriculum, raised $18 million in Series C funding. Owl Ventures led and was joined by investors including Accel.
- Theator, a Palo Alto, Calif.-based maker of an A.I. platform using computer vision in surgery, raised $15.5 million in Series A funding. Insight Partners led the round and was joined by investors including Blumberg Capital, NFX, StageOne Ventures, KdT Ventures, and iAngels.
- Sitka, a San Francisco-based video telehealth platform, raised $14 million in Series A funding. Venrock led the round and was joined by investors including Optum Ventures, Homebrew, First Round Capital, and Lifeforce Capital.
- C-Zero, a Santa Barbara, Calif.-based natural gas decarbonization, raised $11.5 million in Series A funding. Breakthrough Energy Ventures and Eni Next led the round and were joined by Mitsubishi Heavy Industries and AP Ventures.
- BeyondID, a San Francisco-based cybersecurity and cloud services company, raised $9 million in Series A funding. Tercera led the round.
- beam, a Boston-based CBD brand, raised $5 million in Series A funding. Investors included C2 Ventures, Obvious Ventures, and Camwood Capital.
- Newton School, a Bengaluru-based edtech startup, raised $5 million in Series A funding. RTP Global led the round.
- anecdotes, a Tel Aviv-based maker of compliance software, raised $5 million in seed funding. Aleph and Glilot Capital led the round.
- David Energy, a Brooklyn, N.Y.-based electricity supplier, raised $4.1 million in seed funding. Equal Ventures led the round and was joined by investors including Operator Partners, Box Group, and Greycroft.
- Goody, a Miami-based startup for mobile gifting, raised $4 million. Investors include Quiet Capital, Index Ventures, Pareto Holdings, Third Kind Venture Capital, and Craft Ventures. Read more.
- Mate Fertility, a Los Angeles-based fertility services company, raised $2.8 million in funding. Struck Capital led the round.
- Hoxton Farms, a London-based maker of replacements for animal fat, raised £2.7 million ($3.7 million) in seed funding. Founders Fund led the round and was joined by investors including Backed, Presight Capital, CPT Capital, and Sustainable Food Ventures.
- Scope, a San Francisco-based software implementation platform, raised $2.3 million. Investors included Craft Ventures and Indicator Ventures.
- InEvent, an Atlanta-based virtual event startup, raised $2 million in seed funding. Storm Ventures led the round. Read more.
- Green Check Verified, a New York-based cannabis banking solution, raised $2 million in convertible debt financing. Flatiron Venture Partners led the round and was joined by investors including Bravos Capital, Base Camp, SilverLeaf Venture Partners, and Fenway Summer.
- Ethena, a Brooklyn, N.Y.-based provider of sexual harassment prevention and corporate compliance training, raised an additional $2 million in funding. GSV Ventures led the round.
- Ai Build, a London-based company using A.I. in manufacturing, raised $1 million. SuperSeed led the round.
PRIVATE EQUITY
- Bain Capital and Cinven agreed to acquire Lonza’s Specialty Ingredients division from the Swiss drugmaker (SWX: LONN) in a deal worth $4.7 billion.
- Appgate, a Dallas, Tx.-based cybersecurity company, will go public via merger with Newtown Lane Marketing, a shell company controlled by Jon Ledecky. BC Partners and Medina Capital are set to own about 74% of the combined business valued at about $1 billion.
- Cornell Capital and Trilantic North America acquired trustaff Management, a provider of travel nurse and allied healthcare staffing services; CardioSolution, a provider of services for cardiologists and support personnel to hospitals; and Stella.ai, an online marketplace for employers and job seekers. Financial terms weren't disclosed.
- Great Hill Partners acquired notonthehighstreet, a U.K.-based online marketplace for handcrafted products. Financial terms weren't disclosed.
- Highview Capital acquired Randall Farms, a Vernon, Calif.-based provider of fresh poultry and meat products. Financial terms weren't disclosed.
- Liquid Environmental Solutions, a portfolio company of Audax Private Equity, acquired Rite-Way and Green Arrow Environmental, grease trap and draining companies based out of Columbus, Oh. and Phoenix, Ari. respectively. Financial terms weren't disclosed.
- Mill Point Capital invested in Prime Pensions, a Florham Park, N.J.-based provider of retirement plan recordkeeping, consulting, actuarial and administration services. Financial terms weren't disclosed.
- Northgate Capital invested in iVoy, a Mexico-based express delivery services company. Financial terms weren't disclosed.
- Heniff Transportation Systems, backed by Olympus, acquired Premier Bulk Systems, an Ontario, Canada-based-based provider of bulk transportation services for commodities. Financial terms weren't disclosed.
- TA Associates entered exclusive negotiations to make a majority growth investment in DL Software, a French enterprise software provider. Current shareholder 21 Invest France will retain a stake in the company. Financial terms weren't disclosed.
EXITS
- Apollo Global Management will invest up to $470 million in US Acute Care Solutions, a provider of physician-owned emergency medicine, hospitalist and observation services. Minority shareholder Welsh, Carson, Anderson & Stowe will exit the investment. Financial terms weren't disclosed.
- TDR Capital is considering a sale or IPO of Modulaire Group, a European designer of work spaces, per Bloomberg. A deal could value it at $6 billion. Read more.
OTHERS
- Veolia Environnement (EPA: VIE) offered to acquire Suez SA (FRA: SEV), the French water utility company, for about €11.3 billion ($13.6 billion). Read more.
- Quidel is weighing a merger with Qiagen (NYSE: QGEN), a German diagnostics company currently worth about $13 billion, per Bloomberg. Read more.
- Electronic Arts (Nasdaq: EA) acquired Glu Mobile (Nasdaq: GLUU), a San Francisco-based publisher of mobile games, for about $2.1 billion in cash.
- Raizen agreed to acquire Biosev, a Brazilian sugar and ethanol company controlled by Louis Dreyfus for 3.6 billion reais ($670.3 million).
- Beijing Salion Foods, a China-based maker of condiments and seasonings, is seeking to sell itself for about $300 million to $400 million, per Bloomberg. Read more.
- Boohoo acquired Dorothy Perkins, Wallis, and Burton, U.K.-based apparel brands, from Arcadia for 25.2 million pounds ($34.6 million). Read more.
IPOS
- PowerSchool, a Folsom, Calif.-based maker of tech for education, filed confidentially for an IPO that could value it at about $6 billion, per Bloomberg. Vista Equity and Onex back the firm. Read more.
- Talis Biomedical, a Menlo Park, Calif.-based maker of diagnostic tests, plans to raise $150 million in an IPO of 10 million shares priced at $14 to $16 apiece. Investors include Baker Bros and ArrowMark. Read more.
- InnovAge, a Denver, Colo.-based provider of a healthcare engagement platform aimed at seniors, filed to raise $100 million. Welsh, Carson, Anderson and Stowe back the firm. Read more.
- Sun Country Airlines, a Minneapolis-based low-cost air carrier, filed to raise $100 million. Apollo Global Management backs the firm. Read more.
SPACS
- Matterport, a Sunnyvale, Calif.-based maker of 3D cameras for virtual real estate tours, agreed to go public via merger with Gores Holdings VI, a SPAC. The deal values the firm at $2.9 billion.
- Hyzon Motors, a Rochester, N.Y.-based maker of hydrogen fuel cell powered commercial vehicles, plans to go public via merger with Decarbonization Plus Acquisition, a SPAC. a deal values the firm at about $2.1 billion.
- Volta Industries, a San Francisco-based electric vehicle charging network, will go public via merger with Tortoise Acquisition II, a SPAC. The deal values the business at about $2 billion.
- Churchill Capital Corp VII, a SPAC backed by dealmaker Michael Klein, now plans to raise $1 billion, up from a previous $300 million. Read more.
- FTAC Parnassus Acquisition, a SPAC formed by executives at the Bancorp, filed to raise $220 million. Read more.
- Pivotal Investment III, a SPAC backed by Jonathan Ledecky, raised $240 million. Read more.
- Capitol Investment VI and Capitol Investment VII, two SPACs backed by Mark Ein, filed to raise $200 million and $400 million respectively. Read more here.
F+FS
- Gauge Capital, a Dallas-based private equity firm, raised $253.7 million for Gauge Capital Parallel III. Read more.
- Kingswood Capital Management, a Los Angeles, Calif.-based lower-middle market private equity firm, raised $230 million for Kingswood Capital Opportunities Fund I.
- Finch Capital, a London and Amsterdam-based firm, held its first close of fEurope III with €150 million.
- Construct Capital, a venture capital firm, raised $140 million in capital commitments. Read more.
PEOPLE
- Cathay Capital, a New York-based private equity firm, named Arthur Yeung as executive president. It also promoted Fabien Wesse and Jacky Abitbol to managing partner in Europe; Siqi Chen and Lijun Ding to partner in China; and Alexandre Lazarow as partner in the U.S.
- SoftBank, the Japanese telecom company, hired Nagraj Kashyap as a managing partner for its Vision Fund in Silicon Valley. Kashyap was previously the global head of M12, Microsoft’s venture fund.
