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In Didi’s crackdown, the battle for new oil is on

July 12, 2021, 2:36 PM UTC

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The founders of China’s largest ride-sharing operation had less than a week to revel in their new-found liquid wealth before the wheels came off the ground.

After going public in June at a valuation of about $67.8 billion, DiDi is now valued at $57.7 billion—below even its most recent private round of funding—after China’s cybersecurity watchdog, the Cyberspace Administration of China, announced last week that it had launched an investigation into the company and also later told Chinese app stores to remove its app from their platforms.

The actions of an agency that has largely stayed out of the broader tech crackdown in China sent chills through the market: The CAC placed two other New York-listed Chinese companies—trucking company Full Truck Alliance and job recruitment site Boss Zhipin—under national security review. Reports Monday said that the highly anticipated, potentially overseas, IPO of TikTok operator ByteDance meanwhile had also been put on hold earlier this year amid concerns about complying with Chinese data security requirements. 

The saga of Ant Financial—the fintech startup that said it would restructure to be overseen by China’s central bank—has shown that China is reigning in the influence of big tech companies on home soil. But there is also geopolitical tension at play here: China over the weekend proposed new laws requiring effectively all firms looking to IPO outside of China to undergo a cybersecurity review. And since the majority of such IPOs head toward the U.S., the target is clear. In part, it is an economic battle: China has been trying to get more high-demand companies to list in mainland China or in Hong Kong rather than stateside. But it is also a high-stakes tug-of-war for the new oil of the 21st century: data: Chinese authorities worry that data about Chinese nationals and or government officials could be used against it. One example being that if a foreign player somehow managed to track how an official moved throughout the country via Didi’s app.

Here’s is Fortune’s China team, dissecting the issue:

‘’The proximate cause for [the Didi crackdown] is that Chinese regulators don’t know [what data vulnerabilities exist],’ says Gatley. “If they have any suspicion that Didi is using foreign equipment or foreign services for storing data…they want to make sure that they know about it before [Didi] is exposed to the SEC.

Those fears bewilder U.S. experts, many of whom say they struggle to imagine a scenario in which U.S. financial regulators would require consumers’ personal data or any information that might jeopardize China’s national security as part of the listing process, or one in which financial regulators might be obliged to share information with U.S. intelligence agencies. Those agencies, if they wanted it, could probably get comparable data from satellites…

In Washington, meanwhile, U.S. lawmakers want more disclosure from Chinese companies, not less. In December, the U.S. enacted a law mandating that American exchanges de-list Chinese companies if, for three years in a row, they fail to comply with U.S. disclosure rules, including a requirement that they share audit papers with U.S. financial regulators. China’s government, citing national security concerns, has long resisted U.S. demands to see the audit papers of Chinese companies trading on American exchanges.” 

THE U.S. TAKES A LOOK AT AMAZON: The Federal Trade Commission has extended its probe into Amazon’s deal to buy movie studio MGM for $8.5 billion. Read more.

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

P.S.: We’re looking for superstars for our 40 under 40 issue! Candidates must be under 40 as of Sept. 1, 2021. Nominate a killer 39-or-under person here by July 19.

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

VENTURE DEALS

- Ola, a Bangalore based ride-sharing startup, raised $500 million from Temasek and Warburg Pincus.

- Bolt Financial, a San Francisco-based online checkout tech company, is seeking to raise as much as $300 million, per Bloomberg. A deal could value it over $1 billion.

- Kurly, a South Korean grocery delivery startup, raised $200 million in Series F funding valuing the company at $2.2 billion. Aspex Management, DST Global, Sequoia Capital China, and Hillhouse Capital invested as well as Millennium Management and CJ Logistics Corporation.

- Tide, a U.K.-based business financial platform, raised $100 million in Series C funding, valuing it at about $650 million. Apax Digital led the round and was joined by investors including Anthemis, Augmentum, Jigsaw, Local Globe / Latitude, SBI, and SpeedInvest.

- Muna Therapeutics, a Danish biopharmaceutical company focused on neuronal diseases, raised $73 million in Series A funding. Novo Holdings, Sofinnova Partners, Droia Ventures, and LSP Dementia Fund led the round and were joined by investors including Polaris Partners, Polaris Innovation Fund, Sanofi Ventures, V-Bio Ventures, and VIB.

- dMed-Clinipace, a Shanghai and North Carolina-based clinical contract organization, raised $50 million in additional Series C funding. Springhill Fund led the round and was joined by investors including Rock Springs Capital, and Superstring Capital. 

- Jasper Card, a credit card fintech, raised $34 million in Series A funding. Benslie International Fund led the round and was joined by investors including 500 Startups, Gauss Ventures, Off The Grid Ventures, OurCrowd, and SIBF.

- Blues Wireless, a Boston-based cellular coverage company, raised $22 million in Series A funding. Sequoia Capital and Lachy Groom led the round and were joined by investors including XYZ Venture Capital and Bill Gates.

- Flash, a Brazilian HR and benefits startup, raised $22 million in Series B funding. Tiger Global Management led the round.

- PowerZ, a French educational video game developer, raised $7.1 million (€6 million). Bpifrance Digital Venture, RAISE Ventures, and Bayard invested and were joined by investors including Educapital, Hachette Livres, Pierre Kosciusko-Morizet, and Michaël Benabou.

- Frontier, a San Francisco-based jobs marketplace, raised $2.8 million. NFX led the round and was joined by investors including firstminute Capital, FJ Labs, Cyan Banister, Ilkka Pannanen, Alex Bouaziz, and Liquid 2.

PRIVATE EQUITY

- Thoma Bravo agreed to acquire Stamps.com (NASDAQ: STMP), an El Segundo, Calif.-based-based online postage and shipping company, in a deal valuing the latter at $6.6 billion.

- TA Associates made a 2 billion pounds ($2.8 billion) takeover offer for U.K.-based Smiths Group’s medical division, per the Mail.

- KPS Capital Partners agreed to acquire a controlling stake in Tate & Lyle’s Primary Products business in North America and Latin America and its interests in the Almidones Mexicanos and DuPont Tate & Lyle Bio-Products Company joint ventures in a deal valued around $1.7 billion. 

- Dyal Capital is nearing a deal to acquire a $1.5 billion stake in the Sacramento Kings, a  National Basketball Association team, per the WSJ. Financial terms weren't disclosed.

- Sixth Street Growth invested $50 million in VisiQuate, a Santa Rosa, Calif.-based analytics software maker for healthcare providers.

- PTTGC International, a subsidiary of PTT Global Chemical Public Company, agreed to acquire allnex Holding, a Netherlands-based business industrial coatings company, from Advent International for about €4 billion.

- Concentric Equity Partners and Northaven Capital Partners have made an investment in Dallas-based Sunbelt Waterproofing & Restoration, a provider of commercial waterproofing and restoration services.

- eSentire, backed by Warburg Pincus, acquired CyFIR, an Asburn, Va.-based remote forensics investigation and incident response company. Financial terms weren't disclosed.

- GovernmentCIO, backed by Welsh, Carson, Anderson & Stowe, agreed to acquire Salient CRGT, a Fairfax, Va.-based provider of data analytics and cybersecurity, from Bridge Growth Partners and Frontenac. Financial terms weren't disclosed

- Charlesbank Capital Partners agreed to invest in symplr, a Houston-based healthcare governance, risk management, and compliance software company. Financial terms weren't disclosed.

- RST/Measurand, a portfolio company of Vance Street Capital, acquired 3vGeomatics, a Candian company measuring ground and infrastructure displacement using satellites. Financial terms weren't disclosed.​​

- WildFire Energy, backed by Kayne Anderson and Warburg Pincus, agreed to acquire Hawkwood Energy, a Denver, Colo.-based oil exploration and production company in a deal valuing the latter at about $650 million.

EXITS

- Microsoft (NYSE: MSFT) agreed to acquire RiskIQ, a San Francisco-based cybersecurity software company, for over $500 million, per Bloomberg. Investors in RiskIQ include Georgian, Battery Ventures, and Summit Partners.

- Vitrolife agreed to acquire Igenomix, a New Jersey-based laboratory company, from EQT Private Equity. Financial terms weren't disclosed.

- Klarna acquired Hero Towers, a London-based e-commerce communications tech company, from investors including Platina Partners and S28 Capital. The deal values Hero around $160 million, per the WSJ.

- Pluralsight, backed by Vista Equity Partners, acquired A Cloud Guru, an Austin-based cloud skills development company, from investors including Summit Partners and Elephant Partners. Financial terms weren't disclosed.

OTHERS

- Hewlett Packard Enterprise (NYSE: HPE) plans to acquire Zerto, an Israel and Boston-based provider cloud data management and security tech for about $374 million.

- Philip Morris agreed to acquire Vectura, a U.K.-based pharmaceuticals company, for 1.1 billions pounds ($1.5 billion), bypassing a deal from Carlyle.

IPO

- Paycor HCM, a Cincinnati, Oh.-based human capital management software company, plans to raise up to $338.5 million in an offering of 18.5 million shares priced between $18 and $21 per share. Apax Partners backs the firm.

- Kaltura, a New York City-based video software company, now plans to raise up to $165 million in an offering of 15 million shares priced between $9 and $11 per share. It had formerly planned to raise $278.4 million. Point 406 Ventures and Intel Capital back the firm.

- Erasca, a San Diego, Calif.-based clinical-stage precision oncology company, plans to raise up to $280 million in an offering of 17.5 million shares priced between $14 and $16 per share. Arch Venture Partners, Colt Ventures, and Cormorant Asset Management back the firm.

- Couchbase, a Santa Clara, Calif.-based provider of a database for application developers, plans to raise up to $161 million in an offering of 7 million shares priced between $20 and $23 per share. Accel and North Bridge Venture Partners back the firm.

- Rapid Micro Biosystems, a Lowell, Mass.-based microbial contamination detection company, plans to raise up to $132 million in an offering of 6.6 million shares priced between $18 and $20 per share. Bain Capital Life Sciences Investors and Longitude Capital back the firm.

- Imago BioSciences, a San Francisco-based bone marrow drug development company, plans to raise up to $112 million in an offering of 7 million shares priced between $14 and $16 per share. BlackRock, Frazier Healthcare Partners and T. Rowe Price back the firm.

- TScan Therapeutics, a Waltham, Mass.-based T cell cancer therapy company, plans to raise up to $106.3 million in an offering of 6.3 million shares priced between $15 and $17 per share. Baker Bros. Advisors, 6 Dimensions Capita,l and Bessemer Venture Partners back the firm.

- Tenaya Therapeutics, a South San Francisco-based heart disease treatment company, filed for an initial public offering. The Column Group, Casdin Capital and Fidelity Investments back the firm.

- Rotech Healthcare Holdings, an Orlando, Florida-based home medical equipment company, filed for an initial public offering. Capital Group, Silver Point Capital, and Venor Capital back the firm.

- MaxCyte, a Gaithersburg, Md.-based cell engineering technology company, filed for an initial public offering. Casdin Capital and Sofinnova Partners back the firm.

- Rani Therapeutics, a San Jose, Calif.-based oral biologic drug company, filed for an initial public offering. InCube Ventures backs the firm.

- Nalu Medical, a Carlsbad, Calif.-based early-stage medical device company, filed for an initial public offering. Boston Scientific, a medical device manufacturer, and Longitude Capital back the firm.

- Omega Therapeutics, a Cambridge, Mass.-based development-stage biotechnology company, filed for an initial public offering. Flagship Pioneering, which founded Omega Therapeutics in 2017, and Fidelity Investments back the firm.

- Immuneering Corporation, a Cambridge, Mass.-based drug discovery company, filed for an initial public offering. Cormorant Asset Management, Surveyor Capital (a Citadel company), Rock Springs Capita,l and T. Rowe Price back the firm.

- Weber, a Palatine, Ill.-based grill company, filed for an initial public offering. BDT Capital Partners backs the firm.

SPAC

- MSP Recovery, a Miami-based which recovers Medicare and Medicaid secondary payments, will go public via merger with Lionheart Acquisition II, a SPAC. The deal values the company at about $32.6 billion.

- Bullish, a Cayman Islands-based cryptocurrency exchange, will go public via merger with Far Peak Acquisition, a SPAC, valuing it at about $9 billion.

- AfterNext HealthTech Acquisition Corp., a blank check company focused on the healthtech sector, filed to raise $300 million in an initial public offering. The SPAC is led by Halsey Wise and Anthony Colaluca, who were executives at MedAssets. TGB Capital backs the SPAC.

- Digital World Acquisition Corp., a blank check company focused on SaaS, fintech and financial services, now plans to raise $300 million. It had originally planned to raise $100 million. The SPAC is led by Patrick Orlando, CEO of Benessere Capital, as well as Luis Orleans-Braganza, the former CEO of mobile payment platform company Zap Tech, who is currently representing the state of São Paulo in Brazil’s National Congress.

- Equinox Holdings, New York-based luxury gym operator, is reportedly no longer in negotiations with a SPAC backed by Chamath Palihapitiya, per Bloomberg.

- Polestar, an electric-car maker controlled by Volvo Car and Zhejiang Geely Holding Group, is in talks to merge with Gores Guggenheim, a SPAC.

F+FS

- DN Capital, a London-based venture capital firm, launched a $350 million fund five.

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