This is the web version of Term Sheet, a daily newsletter on the biggest deals and dealmakers. Sign up to get it delivered free to your inbox.
Brandless, an e-commerce company that once sold sustainable household goods for about $3 a piece, became the first SoftBank-backed startup to close its doors in early 2020 after the failure of WeWork’s IPO spread doubts through the rest of its portfolio companies.
But that wasn’t the end of the story: unperturbed by stories of quality issues, layoffs, and internal turmoil swirling around the company, Clarke Capital Partners, a Utah-based family office, acquired the company once worth as much as $500 million for a steep discount in the summer of 2020, with sources telling Term Sheet the figure clocked in below $100 million (the exact dollar amount could not be learned)—making it a losing bet for investors like SoftBank’s Vision Fund.
For better sense of those losses: in total, some $300 million had been committed to the company back then. The exact amount was lower, however, as SoftBank only invested about $100 million as part of a $240 million Series C round it led, with much of that round contingent upon Brandless hitting certain performance milestones, Axios first reported, as confirmed by a source with knowledge of the matters.
And now, under a completely new investor, Brandless is gearing up again with new funding and a new focus that has it jumping into two red-hot bandwagons within venture capital at the moment: the creator economy and e-commerce rollups.
On Thursday, the now Silicon Slopes, Ut.-based company raised $118 million in equity and debt funding, with the majority coming in the form of debt, according to now CEO Cydni Tetro. The funding will be used to acquire businesses that are profitable on an EBITDA basis and with a revenue of between $7 million to $40 million, and to build out tech that will pay out individuals who successfully refer others to Brandless products on social media, she says.
The funding comes at a time when billions of dollars have been poured into startups buying smaller e-commerce players as online-shopping has boomed amid the pandemic (ahem, Thrasio and Perch) and the term “creator economy” has become the new buzz word. So hot is the competition to buy e-commerce companies that one startup looking to acquire Amazon sellers is giving away Teslas in return for referrals, per CNBC.
“There are big trends happening in the consumer space where we believe every individual person is their own platform,” says Tetro, coining the term “influence-as-a-service” in our conversation.
While the company itself is very different behind-the-scenes from before, with new management, almost entirely new employees, investors, and its second CEO since Clarke’s takeover, both Tetro and Clarke Capital are looking to keep at least the brand DNA buy acquiring e-commerce companies that are sustainable, and as they say, “better for you.” And while many of the acquirers are looking to buy Amazon-focused businesses, the new Brandless still sees direct-to-consumer as its main channel for now. As part of the fire-sale last year, the team did also buy assets including trademarks and formulas for products, leaving a stable of their own to draw from.
In 2017, at the peak of that blockchain bubble, companies left and right—especially ailing ones—were jumping onto the trend. In 1999, a plethora of companies were also suddenly “dotcom” businesses. It didn’t always end well. By pivoting to the creator economy and e-commerce rollups, I pointed out it feels an awful lot like the company is jumping on a fad. While that may be the case, Tetro and Clarke Capital Managing Partner James Clarke though are betting that the fad has rationale behind it, and that by aggregating other businesses, the company can reach the economies of scale by holding more consumer data. Tetro says the company is currently EBITDA profitable.
And they’d better be right: The company has ramped up rapidly in its new home. Having wound down to just 10 employees at the company’s shuttering, Brandless now has 100 full-time workers, exceeding the 80 or so employees it had prior to the 2020 layoffs.
AS IT SO HAPPENS: The former SoftBank Vision Fund partner that led the Brandless deal, Jeff Housenbold, left the firm earlier this year. He has since collected $100 million in commitments for his own venture fund aimed at consumer tech startups, per the Financial Times. Honor Ventures is aiming to raise between $500 million to $600 million in total. Read more.
Jessica Mathews compiled the IPO and SPAC sections of this newsletter.
- Hopin, the London-based events platform, raised $450 million in Series D funding. Arena Holdings and Altimeter Capital led the round and were joined by investors including Adams Street Partners, Untitled Investments, and XN in addition to existing investors Andreessen Horowitz, DFJ Growth, General Catalyst, GIC, IVP, Northzone, Salesforce Ventures, Slack Fund, Temasek, and Tiger Global.
- Dataiku, a New York-based A.I. company, raised $400 million in Series E funding valuing it at $4.6 billion. Tiger Global led the round and was joined by investors including ICONIQ Growth, CapitalG, FirstMark Capital, Battery Ventures, Snowflake Ventures, and Dawn Capital.
- Superhuman, a San Francisco-based subscription email service, raised $75 million. IVP led the Series C round and was joined by Tiger Global, Drew Houston (CEO of Dropbox), Timothy Young (President of Dropbox), Jason Citron (CEO of Discord), Arianna Huffington (CEO of Thrive), Ashton Kutcher, Will Smith, and the Chainsmokers. The deal values the company at $875 million.
- Human Interest, a San Francisco-based retirement savings company, raised $200 million in Series D funding. The Rise Fund led the round and was joined by investors including SoftBank Vision Fund 2. U.S. Venture Partners, Wing Venture Capital, Uncork Capital, Slow Capital, and Susa Ventures.
- PepGen, a Boston-based maker of therapies for neurologic diseases, raised $112.5 million. Investors included RA Capital Management, Oxford Sciences Innovation, CureDuchenne Ventures, Vking Global Investors, Deerfield Management Company, Adage Capital Management, Samsara Biocapital, and Laurion Capital Management.
- Relatient, a Nashville, Tenn.-based patient engagement platform, agreed to merge with Radix Health and raised $100 million or so from Brighton Park Capital.
- Yellow.ai, a San Francisco-based customer chatbot platform, raised $78.2 million in Series C funding. WestBridge Capital led the round and was joined by investors including Sapphire Ventures, Salesforce Ventures, and Lightspeed Venture Partners.
- Knowde, a San Jose, Calif.-based marketplace for ingredients, polymers, and chemistry, raised $72 million in Series B funding. Coatue led the round and was joined by investors including Sequoia Capital, Refactor Capital, Bee Partners, and Cantos Ventures.
- SentiLink, a San Francisco-based identity verification tech company, raised $70 million in Series B funding. David Sacks of Craft Ventures led the round and was joined by investors including Felicis Ventures, Andreessen Horowitz, and NYCA.
- Crehana, a Mexico City-based reskilling and upskilling tech maker, raised $70 million in Series B funding. General Atlantic led the round.
- Octane Lending, a New York City-based financier for ATVs and motorcycles, raised $52 million in Series D funding. Progressive Investment Company led the round and was joined by investors including Valar Ventures, Upper90, Contour Venture Partners, Citi Ventures, Third Prime, and Parkwood. A deal values it over $900 million.
- Tabby, a Dubai-based buy-now-pay-later startup, raised $50 million in Series B funding valuing it at $300 million. Global Founders Capital and STV led the round and were joined by investors including Delivery Hero and CCVA.
- Third Wave Automation, a Union City, Calif.-based machine learning company, raised $40 million in Series B funding. Norwest Venture Partners led the round and was joined by investors including Innovation Endeavors, Eclipse, and Toyota Ventures.
- DayTwo, a Walnut Creek, Calif.-based microbiome sciences company, raised $37 million in funding. Cathay Innovation and aMoon led the round.
- MakersPlace, a San Francisco-based NFT marketplace for digital art, raised $30 million in Series A funding. Bessemer Venture Partners and Pantera Capital led the round and were joined by investors including Eminem, 3LAU, Larry Fitzgerald Jr., Shari Glazer, Kevin Hartz, Vinny Lingham, and Tobias Lütke.
- Ultrahuman, an India-based health and fitness platform, raised $17.5 million in funding. Falcon Edge’s AWI, Steadview Capital, Nexus Venture Partners, and Blume Ventures invested.
- Lucid Lane, a Los Altos, Calif.based telehealth solution, raised $16 million in Series A funding. Accel led the round and was joined by investors including Battery Ventures, AME Cloud Ventures, and Morado Ventures.
- Villa, a San Francisco-based backyard building company, raised $15 million in seed funding. Atomic led the round.
- Encellin, a San Francisco-based cell implant company, raised $5.9 million in seed funding. Khosla Ventures and SV Latam Capital led the round and were joined by investors including Sandhill Angels and Y Combinator.
- HeyRenee, a Los Angeles-based personal care company, raised $3.8 million. Quiet Capital led the round and was joined by investors including Mucker Capital, Fika Ventures, Tau Ventures, Global Founders Capital, and SaaS Venture Capital.
- Correlated, a New York City-based sales platform, raised $8.3 million in seed funding. NextView Ventures and Harrison Metal led the round.
- VersusGame, a San Mateo, Calif.-based culture predictions and events game, raised $3 million in seed funding. Investors included Mark Pincus, Kevin Hart, Will.i.am, and Jeffrey Katzenberg.
Kensho Health, a New York City-based wellness company, raised $3.5 million in seed funding. KB Partners led the round and was joined by investors including Company Ventures and Gaingels.
- Humanity, a U.K.-based maker of an app focused on reversing aging, raised $2.5 million. Investors include Alex Tew and Michael Acton-Smith (co-founders of Calm), Taavet Hinrikus (co-founder of Wise), Robin Thurston (co-founder of MyFitnessPal), One Way Ventures, 7Percent, and Seedcamp.
- Apollo Global Management will acquire Lumen Technologies’ local exchange carrier business $7.5 billion.
- CVC Capital Partners will acquire a 10% stake from LA Liga, Spain’s top soccer league, for around $3 billion.
- Cressey & Company invested in Home Care Pulse, a Rexford, Id.-based provider of training and performance benchmarking solutions for the home care industry. Financial terms weren't disclosed.
- Morgan Health, the JPMorgan Chase & Co. (NYSE:JPM) business, invested $50 million in Vera Whole Health, a coordinated care company. Financial terms weren't disclosed.
- KnowFully, backed by NexPhase Capital, acquired ChiroCredit, a Wallingford, Conn.-based provider of continuing education for chiropractors, podiatric and naturopathic physicians. Financial terms weren't disclosed.
PSG invested in OfColor, a Maplewood, N.J.-based enterprise SAAS provider. Financial terms weren't disclosed.
- Serent invested in ParentSquare, a Goleta, Calif.-based provider of a parents and education communication platform for K-12. Financial terms weren't disclosed.
- WM Partners agreed to invest in Raw Sugar, a Sarasota, Fla.-based clean living brand. Financial terms weren't disclosed.
- VICI Properties will acquire MGM Growth Properties, a portfolio properties including 12 resorts in Las Vegas controlled by MGM Resorts, for $17.2 billion.
- Hitachi is in talks to acquire the GTS railway signalling business of Thales, a European defence electronics company, for €1.7 billion euros ($2 billion).
- The Hut Group agreed to acquire Cult Beauty, a U.K.-based beauty retailer, for 275 million pounds ($382.91 million).
- Jump Trading Group acquired Certus One, a San Francisco-based blockchain infrastructure company. Financial terms weren't disclosed.
- Weber, a Palatine, Ill.-based grill company, raised $250 million in an offering of 17.9 million shares priced at $14 per share—it previously planned to raise up to $797 million. Weber generated net sales of $1.5 billion in the year ending in Sept. 2020 and reported $609.7 million in gross profit. BDT Capital Partners backs the firm.
- European Wax Center, a Plano, Texas-based hair removal salon chain, raised $180.2 million in an offering of 10.6 million shares (16% sold by insiders) priced at $17 per share. The company generated $103.4 million in 2020 revenue and ran at a net loss of $21.5 million. General Atlantic backs the firm.
- Cian, a leading real estate marketplace in Russia, has reportedly hired investment bankers and is planning an initial public offering in the U.S. this autumn, according to Reuters.
- Geek+, a Beijing-based logistics technology company, is weighing an initial public offering, per Bloomberg. Warburg Pincus backs the firm.
- Craft Ventures, a San Francisco-based early-stage investor, raised $1.1 billion across two funds, Craft Ventures III ($612 million) and Craft Ventures Growth I ($510 million).
- Armory Square Ventures, a New York-based early-stage venture investor, promoted Neenah Jain and Pia Sawhney to partner.
- Blackstone (NYSE: BX), the New York City-based alternative asset investor, named Ramzi Ramsey and Mike Kirkman as managing directors in San Francisco, working on the firm’s Blackstone Growth and Tactical Opportunities businesses.
- ZX Ventures, AB InBev’s Investment group, named Bert Navarrete as a general partner.
Our mission to make business better is fueled by readers like you. To enjoy unlimited access to our journalism, subscribe today.