In Five9 deal, Zoom targets growth with customers that cannot afford to get Zoom fatigue

Video-conferencing software maker Zoom was a big winner of the pandemic, with its name becoming a verb akin to Google during stay-at-home orders.

But even as “Zoom” became a household name, “Zoom fatigue” soon became its counterbalance to describe the exhaustion felt by users using the service continually or even back-to-back. 

Late Sunday, Zoom agreed to a mega deal that analysts believe is aimed at addressing concerns that the company’s growth will wane as vaccine rollouts continue. Zoom announced that it agreed to acquire Five9, a publicly-traded maker of software for contact centers, for $14.7 billion in stock. Zoom’s stock dipped slightly on the news (down about 4%), though part of those losses also come as the broader stock market is down about 2% ostensibly over concerns of a rebound in Covid-19 cases.

For a sense of the scale of the deal: Zoom was valued at about $20 billion in 2020. Meaning the pandemic has been more than just steroids for the business—it’s been some kind of super-soldier serum bolstering the software company’s valuation by 440% to $107 billion. And yes, Zoom has made some acquisitions since the startup of the coronavirus, including in encryption startup Keybase, real-time transcription company Karlsruhe Information Technology Solutions; and it also invested in enterprise software company Monday.com’s IPO. But none seem to come anywhere close to the scale of the Five9 acquisition, which is Zoom’s largest yet.

As parts of the economy go back in-person with schools and businesses reopening, Zoom is looking to make up for the exit of those customers with enterprise clients that are often willing to pay more—customers that Five9 appears to have in its wheelhouse (it says its customers include the likes of Under Armour and Citrix).

With the acquisition, Zoom also appears to be targeting customers that have always been and will continue to make calls virtually, pandemic or not: Customer service representatives have traditionally used landlines, but they are increasingly using more robust tech services such as chatbots or reaching customers via various messaging apps. In short, Zoom fatigue, or more broadly, fatigue over virtual communication, is not exactly an option here. 

“Enterprises communicate with their customers primarily through the contact center,” Zoom CEO Eric Yuan said in a statement.

At any rate, Five9 gives its users analytics and chatbot functionality, and is seen as bolstering Zoom’s phone offering: “This acquisition is complementary to the growing popularity of our Zoom Phone offering,” Yuan wrote in a blog post. The deal also intensifies competition with the likes of Cisco and RingCentral.

PERSHING SQUARE TONTINE IS BACK ON THE MARKET: Amid discussions with the Securities and Exchange Commission, hedge fund titan Bill Ackman’s SPAC, Pershing Square Tontine, dropped a deal to buy 10% of Universal Music Group on Monday. The SPAC is now expected to pursue a more “conventional” SPAC merger.

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

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

VENTURE DEALS

- Pivot Bio, an agtech focused on nitrogen, raised $430 million in Series D funding. DCVC and Temasek led the round and were joined by investors including Generation Investment Management, G2 Venture Partners, and Rockefeller Capital Management.

- Nature’s Fynd, a Chicago-based food company growing protein from microbes linked to geothermal springs of Yellowstone National Park, raised $350 million in Series C funding. SoftBank’s Vision Fund 2 led the round and was joined by investors including Blackstone Strategic Partners, Balyasny Asset Management, Hillhouse Investment, EDBI, SK, and Hongkou.

- Lenskart, an Indian online eyewear seller, raised $220 million. Investors included Temasek Holdings and Falcon Edge Capital.

- Go1, an Australian-based maker of internal education software for enterprises, raised $200 million in Series D funding valuing it over $1 billion. SoftBank’s Vision Fund 2, AirTree Ventures, and Salesforce Ventures co-led the round.

- Delhivery, an Indian logistics startup, raised $100 million from FedEx.

- Quit Genius, a New York City-based digital clinic for treating multiple addictions, raised $64 million in Series B funding. Kinnevik and Atomico led the round and were joined by investors including Octopus Ventures, Triple Point Ventures, and Startup Health.

- Jones, a New York City-based commercial real estate startup for connecting parties with vendors, raised $12.5 million in Series A funding. JLL Spark and Khosla Ventures led the round and were joined by investors including Camber Creek, Rudin Management, DivcoWest, and Sage Realty.

- NanoSyrinx, a U.K.-based biotech company developing cell engineering tools, raised £6.2 million in seed funding. Octopus Ventures led the round and was joined by investors including M Ventures.

- Nym Technologies, a Switzerland-based privacy startup with an early focus on crypto, raised $6 million. Polychain Capital led the round.

- Visualping, a Canadian startup monitoring price drops on websites, raised $6 million in extended seed funding. FUSE led the round and was joined by investors including Mistral Venture Partners and N49P.

- Cohley, a New York City-based brand content analyzation platform, raised $5 million. Right Side Capital and Active Capital led the round and were joined by investors including Attentive, Yotpo, Klaviyo, and AdRoll. 

- Halla, a New York City-based startup focused on determining and steering shopper behavior in food, raised $4.5 million in Series A1 funding. Food Retail Ventures led the round.

- Yummy, a Venezuela-based delivery app, raised $4 million in funding. Investors include Y Combinator, Justin Mateen (Tinder co-founder), Canary, Hustle Fund, and Necessary Ventures.

- Vanilla Steel, a Berlin-based marketplace for industrial materials, raised $4 million in seed funding. June Fund led the round and was joined by investors including Seedcamp and Mustard Seed Maze. 

PRIVATE EQUITY

- Partners Group agreed to buy a 75% stake in EOLO, an Italian broadband business. The deal values the business around $1.4 billion. 

- L Catterton agreed to buy a 60% stake in Etro, an Italian fashion company, per Reuters. The deal values the company at about €500 million ($590 million).

- Carlyle acquired LiveU, an Israeli-based satellite company for delivery live streaming, for over $400 million, per TechCrunch.

- Blackstone acquired a majority stake in Simplilearn, a Bangalore and San Francisco-based edtech, for $250 million.

- Ares Management acquired a majority stake in KPI, a Kansas City-based warehouse logistics company formed by the combination of Kuecker Logistics Group, Pulse Integration, and QC Software. Financial terms weren't disclosed.

- MacNeill Pride Group, backed by Centre Partners, acquired Klymit, a Kaysvsille, Ut.-based outdoor gear designer. Financial terms weren't disclosed.

- Equity Investment Group invested in MountainSeed, an Atlanta-based private commercial real estate business in Atlanta. Financial terms weren't disclosed.

- Equistone Partners Europe agreed to acquire a majority stake in the GSCM Group ("Groupe Solfab Constructions Modulaires"), a modular construction specialist, from Orfite. Financial terms weren't disclosed.

- PrimeSource, backed by Clearlake Capital Group, Nationwide Industries, a Tampa, Fla.-based provider of security hardware and component systems. Financial terms weren't disclosed.

- Right Time, backed by Gryphon Investors, acquired Haven Home ClimateCare, a Canadian residential HVAC, air quality and hot water services company. Financial terms weren't disclosed.

EXIT

- Kinder Morgan (NYSE: KMI) agreed to acquire Kinetrex Energy, a natural gas company, from Parallel49 Equity for $310 million.

- Partners Group acquired a majority stake in Pharmathen, a European pharmaceuticals company, for €1.6 billion ($1.9 billion), from BC Partners. 

OTHER

- Intel is reportedly considering a deal to acquire GlobalFoundries, a Santa Clara, Calif.-based semiconductor company, for about $30 billion deal per the Wall Street Journal. GlobalFoundries is also weighing an IPO.

IPO

- Paytm, the Indian digital payments company backed by Berkshire Hathaway and SoftBank, now plans to raise as much as $2.2 billion in an IPO in the country.

- Robinhood Markets, a Menlo Park, Calif.-based retail brokerage and trading company, plans to raise up to $2.3 billion in an offering of 55 million shares (up to 5% sold by insiders), priced between $38 and $42 per share. The company posted $958.8 million in net revenue in 2020 and net income of $7.4 million. DST Global, Index Ventures, NEA, and Ribbit Capital back the firm. 

- Duolingo, a Pittsburgh-based language learning app company, plans to raise up to $485.1 million in an offering of 5.1 million shares priced between $85 and $95 per share. The company generated $161.7 million in revenue in 2020, and reported a net loss of $15.8 million.  Union Square Ventures, CapitalG, and General Atlantic back the firm.

- PowerSchool Holdings, a Folsom, Calif.-based K-12 education technology company, plans to raise up to $789.5 million in an offering of 39.5 million shares priced between $18 and $20 per share. The company generated $434.9 million in total revenue in 2020 and reported a net loss of $46.6 million. Vista Equity Partners and Onex Partners back the firm.

- Cognition Therapeutics, a Purchase, N.Y.-based clinical stage neuroscience company, filed for an IPO. The company reported a net loss of $7.8 million in 2020 and has yet to post revenue. Golden Seeds and Pittsburgh Life Sciences Greenhouse back the firm.

- Castle Creek Biosciences, an Exton, Penn.-based clinical-stage cell and gene therapy company, filed for an initial public offering. The company reported a net loss of $88.4 million in 2020 and has yet to post revenue. Fidelity Investments backs the firm.

- Eliem Therapeutics, a Redmond, Wash.-based nervous system biotech company, filed for an initial public offering. The company reported a net loss and comprehensive loss of $20.7 million in 2020 and has yet to post revenue. RA Capital and LifeArc back the firm.

- Everside Health Group, a Denver, Colo.-based direct primary care provider, filed for an initial public offering. The company generated $180.5 million in revenue in 2020 and reported a net loss of $4.8 million. NEA and Greenspring Associates back the firm. 

- The Fresh Market Holdings, a Greensboro, N.C.-based gourmet grocery chain, filed for an initial public offering. The company posted sales of $1.9 billion in the year ending in Jan. 2021 and net income of $26.9 million. Apollo Global Management backs the firm.

- Thorne HealthTech, a New York City-based personalized wellness company, filed for an initial public offering. The company posted net sales of $138.5 million in 2020 and a net loss of $4 million. Mitsui Group and Kirin Holdings back the firm.

Snap One Holdings, a Charlotte, N.C.-based smart home integration company, plans to raise up to $290.9 million in an offering of 13.9 million shares priced between $18 and $21 per share. The company posted net sales of $814.1 million in 2020 and reported a $25.2 million net loss. Hellman & Friedman backs the firm.

- Caribou Biosciences, a Berkeley, Calif.-based clinical-stage biopharmaceutical company, plans to raise up to $216 million in an offering of 13.5 million shares priced between $14 and $16 per share. The company posted $12.4 million in licensing and collaboration revenue in 2020, and it reported a net loss and comprehensive loss of $34.3 million. DuPont and F-Prime Capital back the firm.

- Cytek BioSciences, a Fremont, Calif.-based biosceinces company, plans to raise $262.2 million in an offering of 14.6 million shares priced between $16 and $18 per share. The company generated $85.3 million in net revenue in 2020 and reported net income of $19.4 million. Wudaokou Investment and RA Capital back the firm.

- EVmo, a Beverly Hills, Calif.-based car rental company for rideshare drivers, filed for an IPO. The company posted $7.6 million in revenue in 2020 and $3.5 million in net loss. Acme Auto Leasing and Bellridge Capital back the firm.

- Aspire Global, a Chinese vaping company, plans to raise up to $135 million in an offering of 15 million shares priced between $7 and $9 per share. The company posted revenue of $79,000 for the year ending in June 2020 and reported net income of $19,000.

- Portillo’s, an Oak Brook, Ill.-based hot dog chain restaurant company, confidentially filed for an initial public offering, per Reuters.

- Dole Plc, an Ireland-based fruit production company, plans to raise up to $598 million in an offering of 26 million shares priced between $20 and $23 per share. The company posted $9 billion in revenue in 2020 and reported net income of $100 million. 

- Riskified, an Israeli fraud prevention software company, plans to raise up to $350 million in an offering of 17.5 million shares priced between $18 and $20 per share. The company posted $169.7 million in revenue in 2020 and a net loss of $11.3 million. General Atlantic and Fidelity Management & Research Company back the firm.

- Daojia Limited, a Beijing-based home cleaning services company, paused IPO plans in the U.S. due to Chinese regulatory scrutiny of overseas listings, per Bloomberg.  

SPAC

- Ermenegildo Zegna Group, the Italian luxury house, agreed to go public via merger with Investindustrial Acquisition, a SPAC. The deal values the company at about $3.2 billion.

- Kin Insurance, the home insurance tech startup, will go public via merger with Omnichannel Acquisition, valuing it at $1 billion.

- Virgin Group Acquisition Corp. III, a blank check company focused on consumer-facing businesses, now plans to raise $300 million, down from $500 million. Virgin Group backs the firm.

- A unit of SoftBank Group will invest $75 million in Bullish, the operator of a not-yet-operational cryptocurrency exchange that agreed to go public via merger with a SPAC.

PEOPLE

- Andreesseen Horowitz, a Menlo Park, Calif.-based venture capital firm, announced former Intel CEO Bob Swan will join its growth investing team as an operating partner.

CORRECTION

- Newfront Insurance, a San Francisco-based insurance broker company, agreed to merge with ABD Insurance and Financial Services valuing the combined companies at $1.4 billion. Founders Fund and Meritech back Newfront. A previous version of this newsletter incorrectly stated that the company planned to go public via merger with a SPAC.