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How will Benchmark change with this new era of venture capital?

June 28, 2021, 3:06 PM UTC

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The pandemic has not only reshaped tech companies—it’s also reshaping the status quo among venture capital investors.

A flurry of new investors have marched onto the venture capital scene amid low interest rates, including the likes of Tiger Global. In response, some existing firms have increased their fund sizes and deployed ever larger checks with friendlier terms to portfolio companies.

Yet at least one fund has stayed steady. Even while other firms raised their largest funds ever, storied venture capital firm Benchmark raised $425 million for its 10th venture fund last April—the same amount it raised in 2013 and 2018. And while other firms have added even more dealmakers in recent years to match the competition in the industry, Benchmark has driven a tight ship and currently has just five partners. 

Here’s a fascinating story from the Information’s Berber Jin on how the highly-respected venture capital firm with bets in the likes of Uber and Snap, is now feeling the pressure to change as newer investors like hedge funds and solo capitalists (like Lachy Groom) are increasing competition in the space. Last April, Benchmark sought to invest in software startup WorkOS, but ultimately did not because fellow investor Groom offered to buy 15% of the company while Benchmark wanted 20%, the report stated.

Of course we’ll see how all this all shakes out. Benchmark’s decision to stay the course is in a sense a virtue as venture capitalists often say they are simply adhering to their “long-term vision” and “doing what we’ve always been doing”—yet shift their strategy to match trends. And it is a truly, remarkably long-term strategy: The recent dynamics around Benchmark truly echo this piece from 2011, in which Gurley said the firm would stay away from seed-and late-stage deals even as early-stage investors began to move both earlier and later.

But reputations are written with the benefit of hindsight, and the question will be its return in the long-term. Benchmark has also not been immune to the shifting winds in the Valley. Benchmark in 2011 stuck to its Series A sweet spot. But per the Information, the venture capital firm has moved into some seed-stage deals to get its 20%. In short, change is already happening.

Also worth noting: All this comes amid a kind of changing of the guards within Benchmark. Last April, Bill Gurley—who is among the most well-known investors in Silicon Valley—stepped back from an active, investing role from the early-stage focused firm. Investors Mitch Lasky and Matt Cohler also took a more backseat role in 2018. 

That made way for the entrance of 29-year-old Miles Grimshaw—previously at Thrive Capital—as a general partner late last year, which followed Chetan Puttagunta’s hiring in July 2018 and that of Sarah Tavel in 2017.

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

Jessica Mathews compiled the IPOs section of the newsletter.

VENTURE DEALS

- CMR Surgical, a Cambridge, Mass.-based surgical robotics business, raised $600 million in Series D funding. SoftBank Vision Fund 2 and Ally Bridge Group led the round.

- Figma, a San Francisco-based collaborative software maker, raised $200 million in Series E funding valuing it at $10 billion. Durable Capital Partners led the round and was joined by investors including Counterpoint Global (Morgan Stanley), Index, Greylock, Kleiner Perkins, Sequoia, and a16z.

- Carbon Health Technologies, a San Francisco-based provider of healthcare services, is in talks to raise $300 million in funding at a $3 billion valuation, per Bloomberg. Investors could include Blackstone Group and Capital Group.

- Voyager Innovations, a Philippines-based tech company, raised $167 million for its fintech arm, PayMaya Philippines. Investors included PLDT, KKR, and Tencent. 

- HealthVerity, a Philadelphia-based healthcare tech company, raised $100 million in Series D funding. Durable Capital Partners led the round and was joined by investors including Flare Capital Partners, Foresite Capital, and Greycroft.

- VRChat, a San Francisco-based social virtual reality platform, raised $80 million in Series D funding. Anthos Capital led the round and was joined by investors including Makers Fund, and GFR Fund.

- XSOLIS, a Nashville-based A.I. software platform for health systems and payers, raised $75 million from Brighton Capital Park.

- Kindbody, a New York City-based fertility company, raised $62 million in Series C funding. Theresa Sexton, managing partner of Claritas Health Ventures, led the round and was joined by investors including Bramalea Partners, Monashee Investment Management,Eldridge, GV, Perceptive Advisors, RRE Ventures, and Rock Springs Capital.

- Novocardia, a New York City-based cardiovascular care delivery platform, raised $53.7 million in Series A funding. Deerfield Management Company led the round.

- Mercuryo, an Estonia-based maker of a crypto payments option, raised $7.5 million in Series A funding. Target Global led the round. 

- Slice, an Indian fintech startup focused on millennials, raised $20 million. Investors included Gunosy and Blume Ventures.

- Botrista Technology, a San Francisco-based maker of a mixed-drinks dispenser, raised $10 million in Series A funding. Purestone Capital and  Kaffa International led the round and were joined by investors including Sony Innovation Fund, Middleby Corporation (NASDAQ: MIDD), and PIDC. 

- Gliknik, a Baltimore, Md.-based immunology company, raised $11.5 million in Series C funding. First In Ventures led the round and was joined by investors including SAISO Partners, RDA Ventures, and Garden Street Holdings.

- Digip, a Swedish SaaS company in the legal tech industry, raised €2 million in funding. Industrifonden led the round and was joined by investors including SeedX and Antler.

- August, a maker of menstruation products, raised roughly $2 million in seed funding. Hannah Grey VC led the round and was joined by investors including Bullish, k50 Ventures,  and xFactor Ventures.

PRIVATE EQUITY

- Moore Strategic Ventures led the $120 million debt-and-equity investment in Outdoorsy, an Austin-based marketplace for recreational vehicle rentals.

- Blackstone agreed to invest in Simpli.fi, a Fort Worth, Tx.-based maker of programmatic advertising and agency management software. The deal values the company at $1.5 billion.

- Cinven agreed to acquire a majority stake in Arcaplanet, an Italian pet care retail chain. Arcaplanet will acquire Maxi Zoo Italia, an Italian pet goods retailer. Financial terms weren't disclosed.

- Gamut Capital Management and British Columbia Investment Management agreed to invest in PS Logistics, a Birmingham, Al.-based transportation and logistics company. Financial terms weren't disclosed.

- High Street Capital invested in BCD International, a  Buffalo Grove, Ill.-based provider of video surveillance data storage. Financial terms weren't disclosed.

- LLR Partners invested in WizeHive, a Conshohocken, Penn.-based software provider. Financial terms weren't disclosed.

- Warburg Pincus invested in Exeter Finance, an Irving, Tx.-based auto finance company, from funds managed by Blackstone. Financial terms weren't disclosed. 

EXITS

- Brookfield Asset Management agreed to acquire Modulaire Group, a London-based maker of modular work spaces, for about $5 billion from investors including TDR Capital.

- Warburg Pincus is weighing a potential sale of Duravant, a Downers Grove, Ill.-based food packaging maker, that could value it around $4 billion, per Bloomberg citing sources.

- Investors including Carlyle are considering acquiring Spanx, the maker of shapewear, in a deal that could value it at $1 billion, per The New York Times’ DealBook.

- Acosta agreed to acquire Impact Group, a Boise, Id.-based sales and marketing agency, from CI Capital Partners. Financial terms weren't disclosed.

- Apollo Global Management acquired a 51% stake in ABC Technologies, a maker of plastics for the automotive industry, from Cerberus Capital Management for about C$277 million.

- Thoma Bravo agreed to acquire QAD Inc. (Nasdaq: QADA), a Santa Barbara, Calif.-based provider of manufacturing and supply chain solutions in the cloud, for about $2 billion. 

OTHERS

- Etsy will acquire Elo7, the “Etsy of Brazil,” for $217 million.

- Credit Suisse may consider a merger with UBS, a fellow Swiss bank, per Reuters, after a series of scandals including its lending to Archegos. 

- Amazon acquired Wickr, a New York City-based encrypted messaging platform. Financial terms weren't disclosed.

IPOS

- Allbirds, a maker of wool shoes, filed confidentially for an IPO, per Bloomberg. It is seeking to go public as soon as September.

- SentinelOne, a Mountain View, Calif.-based cybersecurity startup, plans to raise up to $1 billion in an initial public offering in an offering of 32 million shares priced between $31 and $32 per share. Insight Venture Partners and Tiger Global back the firm.

- Imago BioSciences, a San Francisco-based bone marrow drug development company, plans to raise up to $100 million in an initial public offering. Blackstone Life Sciences, Frazier Healthcare Partners and Omega Funds back the firm.

- Rapid Micro Biosystems, a Lowell, Mass.-based microbial contamination detection company, filed to raise up to $100 million in an initial public offering. Bain Capital Life Sciences Investors and Longitude Capital back the firm.

- CS Disco, an Austin-based legal software company, plans to raise up to $100 million in an initial public offering. Bessemer Venture Partners and the Stephens Group back the firm.

- Erasca, a San Diego, Calif.-based clinical-stage precision oncology company, filed to raise up to $100 million in an initial public offering. Arch Venture Partners backs the firm.

- Xponential Fitness, an Irvine, Calif.-based boutique fitness brand franchise company, filed for an IPO. Snapdragon Capital Partners backs the firm. 

- Candel Therapeutics, a Needham, Mass.-based oncolytic viral immunotherapy company, filed for an IPO. PBM Capital and Northpond Ventures.

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