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Can J.Crew make a comeback?

June 30, 2021, 2:23 PM UTC

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It was not too long ago that its clothing was plastered across the pages of fashion and political news media on the daily with one of the highest-profile brand ambassadors that no marketing dollars could ever buy: Then First Lady Michelle Obama.

But in an effort to expand, J.Crew Group betrayed much of what made it so popular– It went upscale when customers had praised its affordability, and cut quality relative to its price, wearing out its clientele base. Customers moved on to the Zaras of the world and by 2015, sales were beginning to fall. It also didn’t help that the company was carrying some $1.7 billions debt following a leveraged buyout by private equity investors TPG and Leonard Green & Partners in 2011. And as the pandemic razed the physical retail industry, J.Crew’s weaknesses made it all the more susceptible. The maker of preppy mass-market clothing was the first major retailer in the U.S. to file for bankruptcy protection last spring in a move that handed control over to top creditors including Anchorage Capital, a hedge fund.

Now out of bankruptcy with less debt and a new CEO, the question is, what will J.Crew’s post-pandemic makeover look like? 

CEO Libby Wadle, a longtime executive at the company who previously helmed its successful Madewell line, tells my colleague Phil Wahba in her first in-depth interview at the top that the plan is not to tap into the Gen Zs or focus on more formal office clothing (which J.Crew has been known for), but to go back to basics. 

“‘We went through a work-wear phase, but we really have casual roots, and I think an easygoing approach to a lifestyle assortment will always be what J.Crew is about,’ [Wadle] says.

The brand’s next big test will come this autumn when the first products designed by its women’s wear director, Olympia Gayot, hired in October, hit stores. Wadle made another splashy hire in June, when she named Brendon Babenzien, one of the key architects behind the ascent of perennially cool street-wear label Supreme, to lead the J.Crew men’s business.”

Fixing the company won’t be easy—the company has faced heavy turnover with Wadle replacing Jan Singer, who had been CEO only for 11 months. And the stakes are high: Yes, Madewell has been doing well, but it’s the J.Crew brand that made up about 75% of sales pre-pandemic. Read the interview here.

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

Jessica Mathews compiled the IPO and SPAC sections of the newsletter.

VENTURE DEALS

- Age of Learning, a Los Angeles-based maker of learning apps, raised $300 million. TPG led the round and was joined by investors including Qatar Investment Authority, and Madrone Capital Partners. 

- Element Biosciences, a San Diego-based developer of a DNA sequencing platform, raised $276 million in Series C funding. Janus Henderson Investors, Logos Capital, Meritech Capital Partners, Counterpoint Global (Morgan Stanley), and T. Rowe Price invested alongside Fidelity Management & Research Company, Foresite Capital, JS Capital Management,  RA Capital Advisors, and Venrock.

- Zipline, a San Francisco-based drone delivery company, raised $250 million in funding valuing it at $2.8 billion. Investors included Fidelity, Intercorp, Emerging Capital Partners, Reinvent Capital, Baillie Gifford, Temasek, and Katalyst Ventures.

- Moveworks, a Mountain View, Calif.-based maker of an automated conversation bot, raised $200 million in Series C funding valuing it at $2.1 billion. Tiger Global and Alkeon Capital led the round and were joined by investors including Lightspeed Venture Partners, Sapphire Ventures, Bain Capital, ICONIQ Growth, and Kleiner Perkins

- dbt Labs, a Philadelphia-based startup previously known as Fishtown Analytics, raised $150 million in Series C funding. Altimeter, Sequoia Capital and Andreessen Horowitz led the round and were joined by investors including Amplify Partners.

- Rohlik Group, a European online grocery delivery business, raised €100 million ($119 million) in Series C funding. Index Ventures led the round, valuing it at over $1 billion.

- Grofers, an Indian online grocer, will raise $100 million from Zomato, per TechCrunch.

- Antheia, a Menlo Park, Calif.-based synthetic biology company, raised $73 million in Series B funding. Viking Global Investors led the round and was joined by investors including Sherpalo Ventures and Hillspire

- Shogun, a Palo Alto, Calif.-based e-commerce platform, raised $67.5 million in Series C funding. Insight Partners led the round and was joined by investors including Initialized Capital, Accel, and VMG Partners. 

- Tendo System, a Philadelphia-based healthcare software maker, raised $50 million in Series B funding. Lux Capital led the round and was joined by investors including General Catalyst.

- Babson Diagnostics, an Austin-based company focused on diagnostic blood testing, raised $31 million in Series B funding. Emerald Development Managers led the round and was joined by investors including Siemens Healthineers, Prism Ventures, and Lago Consulting Group.

- Cortica, a San Diego, Calif.-based provider of care with those with autism and neurodevelopmental conditions, raised $60 million in Series C funding. Longitude Capital led the round.

- Forum, a New York City-based buyer of Amazon-focused sellers, raised $27 million. Norwest Venture Partners led the round and was joined by investors including NFX and Concrete Rose Capital.

- The Citizenry, a Dallas-based direct to consumer home decor brand, raised $20 million in Series B funding from NextWorld Evergreen.

- Hypersonix, a San Jose, Calif.-based enterprise A.I. provider, raised $35 million in Series B funding. B Capital Group led the round and was joined by investors including Intel Capital, Firebolt, Happiness, and Gokul Rajaram.

- Nansen, a blockchain analytics startup, raised $12 million in Series A funding. Andreessen Horowitz led the round and was joined by investors including Coinbase Ventures, Skyfall Ventures, imToken Ventures, Mechanism Capital, and QCP Capital.

- Soft Robotics, a Bedford, Mass.-based robotics company focused on picking agriculture, raised $10 million in extended Series B funding. Material Impact, Scale Venture Partners, and Calibrate Ventures led the round and were joined by investors including Tyson Ventures.

- Virti, a U.K.-based maker of a VR training program, raised $10 million in Series A funding. IQ Capital led the round and was joined by investors including Cedars-Sinai Medical Center, and Descenture Capital.

- Beeflow, a San Francisco-based startup looking to protect bees, raised $8.3 million in Series A funding. 

- Tenovos, a New York City-based marketing tech startup, raised $8 million in Series A1 funding. Progress Ventures led the round and was joined by investors including Bertelsmann Digital Media Investments, Revel Partners, and Dublin Capital.

- Toggle, a New York City-based construction robotics company, raised $8 million in Series A funding. Tribeca Venture Partners led the round and was joined by investors including Blackhorn Ventures, Point72 Ventures, New York State, and Twenty Seven Ventures.

- Tribe, a Toronto-based platform for enterprise businesses, raised $7.5 million in seed funding. Bessemer Venture Partners led the round. 

- Aliaswire, a Burlington, Mass.-based provider of payment and credit services, raised $6 million. Stage 1 Ventures led the round.

- Pratexo, an Austin-based edge computing and cloud platform, raised $3.5 million in seed funding. BCP Blitz LP, Raiven Capital, and Northscaler invested.

- Givingli, a Los Angeles-based gifting app, raised $3 million in seed funding. Seven Seven Six led the round and was joined by investors including Snap’s Yellow Accelerator and Pipe Co-CEO Harry Hurst

- Life360, a San Francisco-based maker of software for tracking family members, raised $2.1 million. Bryant Stibel led the round and was joined by investors including Vanessa Bryant, Joanna and Chip Gaines, Tony Hawk, Chris and Jada Paul, TikTok influencer Billy Perry, and Nicole and Michael Phelps.

- Arrows, a Los Angeles-based customer onboarding software provider, has raised $2.75 million in seed funding. Gradient Ventures led the round.

- Turntide Technologies, a Sunnyvale, Calif.-based maker of a motor system, raised $225 million in convertible note financing. Canadian Pension Plan Investment Board, Monashee Capital, and JLL Spark invested alongside Breakthrough Energy Ventures, and Suvretta Capital Management.

- FTX, a crypto exchange, said Tom Brady and Gisele Bündchen invested in the company. Financial terms weren't disclosed.

PRIVATE EQUITY

- Clayton, Dubilier & Rice agreed to acquire UDG Health (LON: UDG), a Dublin-based healthcare company, for about 2.8 billion pounds ($3.9 billion).

- CC Capital says it does not plan to make a takeover offer for IWG, the U.K.-based office sharing company.

- Genstar Capital and TA Associates agreed to merge their portfolio companies, Compusoft, a provider of software to the retail and manufacturing industries, and 2020 Technologies, a provider of quote and design software to the interior design, space planning and furniture manufacturing industries. Financial terms weren't disclosed.

- Livingbridge invested in Semafone, a Boston-based provider of data security and compliance solutions for call and contact centers. Financial terms weren't disclosed.

- Providence Equity Partners invested in Sweetwater, a Fort Wayne, In.-based musical instruments and audio equipment seller. Financial terms weren't disclosed.

- Sovos, backed by Hg and TA Associates, acquired Stupendo, an Ecuador-based provider of automated invoicing services. Financial terms weren't disclosed.

- TA Associates formed Revalize, a Jacksonville, Fla.-based software maker for manufacturers, along with AutoQuotes. Financial terms weren't disclosed.

- Teleo Capital Management invested in Univeris, a Canadian wealth management software maker. Financial terms weren't disclosed.

EXITS

- BAI Communications agreed to acquire Mobilitie, a Newport Beach, Calif.-based wireless infrastructure firm, from investors including Shamrock Capital. Financial terms weren't disclosed.

- JPMorgan Chase agreed to acquire OpenInvest, a San Francisco-based ESG-focused fintech startup. Andreessen Horowitz and Y Combinator back the startup. Financial terms weren't disclosed.

- One Rock Capital Partners invested in ArchKey Solutions, an electrical and technologies contracting and services provider. It acquired the stake from Oaktree Capital Management. Financial terms weren't disclosed.

- Oak Hill Capital acquired Trinity Consultants, New York City-based consultancy, from Levine Leichtman Capital Partners. Financial terms weren't disclosed.

- PrimeSource Brands, backed by Clearlake Capital Partners, agreed to acquire Wolf Home Products, a York, Pa.-based provider of branded kitchen and bath, outdoor living, and specialty exterior building products for residential applications, from Tenex Capital Management. Financial terms weren't disclosed.

- TA Associates acquired AutoQuotes, a Jacksonville, Fla.-based supply chain software maker for the foodservice industry, from Luminate Capital Partners. The company will become part of Revalize. Financial terms weren't disclosed.

- Sebia acquired ORGENTEC Diagnostika, a German diagnostics company, from Water Street Healthcare Partners. Financial terms weren't disclosed.

OTHERS

- Deutsche Boerse agreed to acquire Crypto Finance, a Swiss digital finance startup. 

IPOS

- Didi Global, a Chinese ride-hailing company, raised about $4.4 billion at $14 per share, according to a Wall Street Journal report. Softbank and Uber back the firm.

- Clear Secure, a New York City-based travel security tech company, said it raised about $409.2 million in an offering of 13.2 million shares priced at $31 per share. T. Rowe Price and General Atlantic back the firm.

- SentinelOne, a Mountain View, Calif.-based cybersecurity startup, said it raised more than $1.2 billion in an offering of 35 million shares priced at $35 per share. Insight Venture Partners and Tiger Global back the firm.

- Bridgepoint Group, a British buyout group that spun out of Royal Bank of Scotland Group, plans to raise 300 million pounds ($416 million) in an IPO in the country.

SPACS

- System1, a New York City-based marketing tech firm, agreed to go public via merger with Trebia Acquisition, a blank-check company backed by Bill Foley. The deal values the duo at $1.4 billion including debt.

- Decarbonization Plus Acquisition Corporation IV, a blank check company focused on sectors that may advance global decarbonization, now plans to raise $300 million, down from a previously estimated $250 million. Riverstone Investment Group backs the SPAC.

F+FS

- Rothschild & Co, a Paris-based financial advisory, closed Five Arrows Growth Capital with €450 million ($535.4 million). 

CORRECTION

- Visier, a Canada-based HR software startup, raised $125 million in Series E funding from Goldman Sachs Asset Management. Yesterday’s newsletter incorrectly stated that previous investors Sorenson Capital, Foundation Capital, Summit Partners, and Adams Street Partners were also a part of the round.

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