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The new must-do for consumer fintechs? Setting aside shares for customers

May 27, 2021, 2:33 PM UTC
Acorns app logo.
Rafael Henrique/SOPA Images/LightRocket—Getty Images

While finance and technology have always been intimately linked, fintech as an industry hit its stride following the financial crisis, when consumers turned on the big, selfish, ugly big banks and fintech startups found a way to position themselves as the banks’ antithesis.

Trading startup Robinhood, for instance, has branded itself as a way of “democratizing” investing, while banking startup Chime (which is not technically a bank) plans to “make financial peace of mind a reality for everyone.”

But over a decade later, as several of these businesses go public for the first time, they are increasingly being pressured to put their money where their mouth is when it comes to a process that has often been criticized for being un-democratic: The IPO.

IPO shares, of course, are traditionally reserved for big institutional investors. But Robinhood, for example, is expected to reserve a portion of its shares sold via initial public offering for the retail investors who have flocked to its app. And on Thursday, investing startup Acorns took it a step further, saying it would also gift shares to “eligible customers” as it goes public via merger with a special purpose acquisition company. Acorns CEO Noah Kerner is expected to contribute 10% of his holdings while the sponsor of the SPAC, Pioneer Merger Corp., is also expected to offer 10% of its stake.

For those who know Acorns, the move is very much on-brand. The company aims to make investing accessible to even those with little in their savings accounts, by rounding up purchases to the nearest dollar amount and then investing the extra change in diversified portfolios. In 2020, that business model helped Acorn grow its revenue by 61%, to $71 million (the company lost $38 million on an adjusted EBITDA basis).

Acorns for its part is still a bit light on the details as to who will be eligible for the program. That will be decided later down the line. But those who are eligible are expected to receive one share of Pioneer deposited in their account, according to Securities and Exchange filing accompanying the announcement.

Last valued at $860 million in 2019, the merger will value the combined business with Pioneer (led by folks including PayPal board member Jonathan Christodoro) at $2.2 billion.

I’ll be out until June 3. Please send deals for May 28 to Anne.sraders@fortune.com and deals for June 1-2 to Rey.mashayehki@fortune.com. Until then.

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

Rey Mashayekhi and Anne Sraders helped curate this version of Term Sheet.

VENTURE DEALS

- OPay, a Nigeria-based fintech company, is in talks to raise up to $400 million, per The Information.

- SpotOn, a San Francisco-based software and payments company, raised $125 million in Series D funding, valuing it at $1.9 billion. Andreessen Horowitz led the round and was joined by investors including DST Global, 01 Advisors, Dragoneer Investment Group, Franklin Templeton, and Mubadala Investment Company.

- Agicap, a France-based cash-flow management platform for small businesses, raised $100 million in Series B funding. Greenoaks led the round and was joined by investors including BlackFin Capital Partners and Partech.  

- Ada Health, a Berlin-based digital health assessment company, raised $90 million in Series B funding. Leaps by Bayer led the round and was joined by Samsung Catalyst Fund, Vitruvian Partners, Inteligo Bank, F4, and Mutschler Ventures.

- Wayflyer, a Dublin-based revenue-based financing company for ecommerce merchants, raised $76 million in Series A funding. Left Lane Capital led the round and was joined by investors including partners at DST Global, QED Investors, Speedinvest and Zinal Growth.

- Engine Biosciences, a Singapore-based platform that deciphers gene networks to find new drug solutions, raised $43 million in Series A funding. Polaris Partners led the round and was joined by investors including Invus, 6 Dimensions Capital, WuXi AppTec, DHVC, EDBI, Baidu Ventures, Vectr Ventures, Goodman Capital, WI Harper, and Nest.Bio. 

- Koo, an Indian “alternative to Twitter,” raised $30 million. Tiger Global Management led the round and was joined by investors including Mirae Asset, IIFL’s venture capital fund, 3one4 Capital, Blume Ventures and Accel.

- TerraClear, a Bellevue, Wash.-based maker of agriculture-focused robots, raised $25 million in Series A funding. Madrona Venture Group led the round.

- Beep, an Orlando, Fla.-based provider of multi-passenger, electric, autonomous vehicles, raised $20 million in Series A funding. Intel Capital and Blue Lagoon Capital invested.

- SAM Seamless Network, a Tel Aviv-based network security company, raised $20 million in Series B funding. Blackberry and Verizon Ventures led the round.

- Parametrix, an Israel-based provider of insurance for companies experiencing downtime from vendors, raised $17.5 million. FirstMark Capital and F2 Venture Capital led the round. 

- Cosuno, a Berlin-based construction tech company, raised $15 million in Series A funding. Spark Capital led the round and was joined by investors including Cherry Ventures and the founders of AUTO1 Group

- Corvus Insurance, a Boston-based provider of commercial insurance products backed by A.I.-driven risk data, raised $15 million in additional Series C funding. FinTLV and Aquiline Technology Growth led the round.

- Oliver Space, a San Francisco-based monthly rental platform for furniture and home accessories, raised $13 million in Series A funding. U.S. Venture Partners (USVP) led the round and was joined by investors including Mayfield Fund, Abstract VC, Expa Capital, and Burst Capital.

- RightBound, a Kirkland, Wash.-based maker of an autonomous sales prospecting engine, raised $12 million in funding. Innovation Endeavors led the round and was joined by investors including IBI Tech Fund and Operator Collective.

- Tilled, a Boulder, Colo.-based payments facilitator software company, raised $11 million in Series A funding. Rebecca Lynn from Canvas Ventures led the round and was joined by investors including Abhinav Tiwari (former head of investments and M&A at Stripe), Henry Ward (CEO at Carta), and existing investors including Abstract Ventures, Peterson Ventures, and Clocktower Technology Group.

- Obie, a Chicago-based provider of insurance to landlords and investment property owners, raised $10.7 million in Series A funding. Battery Ventures led the round and was joined by investors including Thomvest Ventures, Funders Club, MetaProp, and Second Century Ventures

- Terazo, a Richmond, Va.-based software development firm, raised $10 million. Tercera led the round and was joined by investors including Twilio.

- Axle, a New York-based payments company focused on the freight industry, raised $10 million in Series A funding. Crosslink Capital led the round and was joined by investors including FJ Labs, Flexport, Tribeca Early Stage Partners, Anthemis Group, Techstars and Plug and Play Ventures.

- Topia, a Indio, Calif.-based video chat platform, raised $5 million in seed funding. Seven Seven Six led the round and was joined by investors including Bonfire Ventures.

- MindPortal, a San Francisco-based maker of a wearable computer controlled by the brain, raised $5 million in seed funding. Learn Capital led the round and was joined by investors including Kleiner Perkins.

- Skiff, a San Francisco-based maker of an encrypted competitor to Google Docs, raised $3.7 million in seed funding. Sequoia Capital led the round.

- Vacayou, a Tampa-based platform to search for wellness and active travel experiences, raised $3.3 million in angel and seed funding. Investors included Tampa Bay Lightning owner Jeff Vinik and Relevance Ventures.

PRIVATE EQUITY

- The Carlyle Group will acquire Vectura Group, a British pharmaceutical company, for 958 million pounds ($1.36 billion) in a take-private deal.

- Investors including FFL Partners and Caisse de dépôt et placement du Québec acquired and took private New Look Vision Group, a Canada-based seller of eyeglasses, for about $800 million.

- 48forty Solutions, a portfolio company of Audax Private Equity, acquired Prime360, a Schaumburg, Ill.-based company that manages shipping pallets. Financial terms weren't disclosed.

- Belcan, owned by AE Industrial Partners, acquired VICTOR42, a Washington, D.C.-based IT, special operations, and intelligence solutions and training services provider for the U.S. government. Financial terms weren’t disclosed. 

- Charlesbank invested in RIA Lido Advisors, a Los Angeles-based investment advisory. Financial terms weren't disclosed.

- Arizona Natural Resources, a portfolio company of CORE Industrial Partners, acquired Marianna Beauty Holdings, an Omaha, Neb.-based beauty products developer for cosmetology schools, salons, and retail brands. Financial terms weren’t disclosed. 

- FortisPay, backed by Lovell Minnick, acquired EpicPay, a payment facilitation platform and processor, and Change Merchant Solutions, an integrated payment solutions provider. Financial terms weren't disclosed.

- National Fire & Safety, a portfolio company of Highview Capital, acquired Texas Fire & Safety, a Texas-based provider of  fire services for customers in central Texas.

- Physical Rehabilitation Network, backed by Gryphon Investors, acquired Rocklin Physical Therapy, a Sacramento, Calif.-based physical therapy center. Financial terms weren't disclosed.

- SK Capital Partners acquired Canlak, a Canada-based coating company, and Valentus Specialty Chemicals, a U.S.-based chemicals business. Financial terms weren't disclosed.

- VSS Capital Partners invested in Centroid Systems, a Troy, Mich.-based provider of cloud consulting services. Financial terms weren’t disclosed.

EXITS

- Welsh, Carson, Anderson & Stowe acquired Absorb Software, a Canada-based learning management platform, from Silversmith Capital Partners, for over $500 million in enterprise value. 

- Tempur Sealy International (NYSE: TPX) agreed to acquire Dreams, a U.K.-based specialty mattress retailer, from an affiliate of Sun Capital Partners for $475 million, excluding debt. 

OTHER

- Mondelez International agreed to acquire Chipita, a European snack maker, for about $2 billion.

- Glovo agreed to acquire three of Berlin-based Delivery Hero’s food delivery brands in Central and Eastern Europe for about €170 million ($208 million), per TechCrunch.

IPOS

- Paytm, an India-based payments platform, is reportedly planning to raise up to 218 billion rupees ($3 billion) in an IPO later this year, Bloomberg reported. Berkshire Hathaway and SoftBank back the firm. 

- ZipRecruiter, a Santa Monica, Calif.-based employment marketplace, went public via direct listing, valuing the business at $2.8 billion. Investors including IVP back the firm.

- Flywire Corp, a Boston-based payments firm, raised $251 million in an offering of 10.4 million shares priced at $24 apiece, the high end of its previously stated range. Temasek backs the firm.

- Paymentus Holdings, a Redmond, Wash.-based electronic billing platform provider, raised $210 million in an offering of 10 million shares priced at $21, the high end of its previously stated range. Accel-KKR backs the firm. 

- Day One Biopharmaceuticals, a South San Francisco-based biotech focused on pediatric glioma, now plans to raise $150 million in an offering of 10 million shares priced at $14 to $16, a higher share count than previously stated. Access Industries Management, Atlas Venture, and Canaan Partners back the firm.

- Meicai, a Chinese company for connecting restaurants with vegetable producers, filed confidentially for an IPO, per Bloomberg.

SPACS

- Tritium, an Australia-based electric vehicle charging company, will go public via merger with Decarbonization Plus Acquisition Corporation II, a SPAC. A deal values the combined business at $1.2 billion.

F+FS

- Frazier Healthcare Partners, a Seattle-based healthcare-focused investment firm, raised $1.4 billion for its 10th Growth Buyout Fund.

-First Move Capital, a Boulder, Colo.-based investor focused on transportation, raised $150 million. 

- OpenAI, a San Francisco-based A.I. research company, set aside $100 million for its Startup Fund.

PEOPLE

- Balderton Capital, a Europe-based Series A investor, promoted Berlin-based Colin Hanna to partner, making him Balderton’s first partner to be based outside of London.

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