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Will the war for talent spur dealmaking?

September 1, 2021, 3:02 PM UTC

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Talent is a priority for companies this year, according to KPMG CEO Paul Knopp.

Burnt out workers are looking for new jobs while companies are doing the previously unthinkable—raising wages—in a bid to keep them. At the same time in venture capital, startups are raising and hiring left and right as they grow rapidly.

Could this need for talent spur dealmaking? In some ways, the dynamic is already making an impact. The most on the nose deal recently is creator economy startup Patreon’s acquisition of a 40-strong tech recruiting firm that will grow its engineering and product teams, announced Tuesday.

But the need for talent and retention could take, and is taking, a number of different forms. 

Venture capital investors have invested billions into HR tech companies in 2021, betting that the as the combination of remote work and a talent shortages will continue to push businesses into rethinking how to keep and add to their workforces. Gig-worker job platform Instawork raised $60 million in July. Payroll software maker Remote raised $150 million in Series B at an over $1 billion valuation that same month. And today, Checkr, a background check company, announced it raised $250 million in Series E funding, valuing it at $4.6 billion. 

And we haven’t even gone into how efforts to retain talent by adding mental health and at-home fitness benefits could be impacting valuations of companies in those spaces.

Then there’s the acquihire, in which a company acquires another predominantly for its talent. Social media company Twitter is well known for this strategy: It acquihired Ueno, a creative agency, in January, and news-summarization app, Brief, in July. In this time of need for talent in Silicon Valley, could more companies be snapped up for their engineers rather than their tech?

I’m not the only one to speculate whether more acquihires may come throughout the tech industry: “The war for talent has never been more fierce and it’s shocking that most private unicorns don’t have an acquisition to go pick up talented teams that didn’t get to [product market fit],” wrote Sundeep Peechu, managing director at Felicis Ventures in a recent Tweet.

Granted, the acquihire isn’t exactly universally beloved. Just look back to the surge of stories on the dealmaking method in 2012: The acquihire historically has been considered a final refuge for dying startups that couldn’t quite get off the ground—a way for the acquired startup, often with few other options, to exit. That’s fine and all, but unfortunately not all of the VCs liked all these acquihires, especially in cases where they feel as if their funding was used to puff up the founders’ resumes, per Michael Arrington.

IS BRICK AND MORTAR SIMPLY A NATURAL PROGRESSION? Last week, glasses retailer Warby Parker went public, revealing that pre-pandemic, the majority of its revenue came from stores rather than digital channels. Allbirds, which makes the wool shoe of choice for Silicon Valley, filed for an IPO Tuesday revealing its ambitions to grow from 27 stores to “hundreds of potential locations.” Read more.

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

Jessica Mathews compiled the IPO section of this newsletter.

VENTURE DEALS

- Checkr, a San Francisco-based HR tech business, raised $250 million in Series E funding valuing it at $4.6 billion. Durable Capital led the round and was joined by investors including Fidelity Management & Research Company, Franklin Templeton, BOND Capital, Khosla Ventures, IVP, T. Rowe Price, Coatue, Accel, and Y Combinator.

- VanMoof, an Amsterdam-based e-bike company, raised $128 million in Series C funding. Hillhouse Investment led the round.

- Humane, a consumer device startup, raised $100 million in Series B funding. Tiger Global Management led the round and was joined by investors including SoftBank Group, BOND, Forerunner Ventures, and Qualcomm Ventures.

- Gatik, a Palo Alto, Calif.-based autonomous vehicle software company, raised $85 million in Series B funding. Koch Disruptive Technologies led the round and was joined by investors including Innovation Endeavours, Wittington Ventures, FM Capital, Dynamo Ventures, Trucks VC, and Intact Ventures

- Oviva, a London-based diet and lifestyle coaching company, raised $80 million in Series C funding. Sofina and Temasek led the round and were joined by investors including AlbionVC, Earlybird, Eight Roads Ventures, F-Prime Capital, and MTIP.

- CoachHub - a Berlin-based digital coaching platform, raised $80 million in Series B2 funding. Investors included Draper Esprit, RTP Global, HV Capital, Signals Venture Capital, Partech, and Speedinvest.

- Alma, a New York City-based membership based network for therapists, raised $50 million in Series C funding. Insight Partners led the round and was joined by investors including Optum Ventures, Tusk Venture Partners, Primary Venture Partners, Sound Ventures, BoxGroup, and Rainfall Ventures. 

- Code Climate, a New York City-based automated code platform, raised $50 million in Series C funding. PSG led the round and was joined by investors including Union Square Ventures, Foundry Group, Lerer Hippeau Ventures, and NextView Ventures.

- Vic.ai, a New York City-based A.I. platform, raised $50 million in Series B funding. ICONIQ Growth led the round and was joined by investors including GGV Capital, Cowboy Ventures, and Costanoa Ventures.

- Trengo, a Dutch omnichannel communications platform, raised $36 million in Series A funding. Insight Partners and Peak led the round.

- Borzo, an Amsterdam-based delivery startup, raised $35 million in Series C funding. Mubadala led the round and was joined by investors including VNV Global, RDIF, and Flashpoint Venture Capital.

- Fieldin, an American-Israeli agtech startup, raised $30 million in Series B funding. Fortissimo Capital led the round and was joined by investors including Zeev Ventures, Icon Ventures, Maor Investments, and Akkadian ventures

- PayEm, a New York City-based maker of a spending platform, raised $27 million in funding. A $7 million seed round was led by Pitango First and NFX while a $20 million Series A was led by Glilot+.

- Rafay Systems, a Sunnyvale, Calif.-based operations platform, raised $25 million in Series B funding.  ForgePoint Capital led the round and was joined by investors including Ridge Ventures, Costanoa Ventures, and Moment Ventures.

- Plantible Foods, a San Diego-based food tech company, raised $21.5 million in Series A funding. Astanor Ventures led the round.

- Osana Salud, an Argentina-based healthcare infrastructure company, raised $20 million in Series A funding. General Catalyst led the round

- Open, an Australian insurtech, raised roughly $22.8 million. Movac with Latitude led the round and were joined by investors including AirTree Ventures.

- Walnut, a New York City-based sales platform, raised $15 million in Series A funding. Eight Roads Ventures led the round.

- Oddup, a Hong Kong-based provider of data to the startup and cryptocurrency industries, raised $12.8 million in Series C funding. Investors included IRO Capital, Elliot Capital, and Jervois Hillier.

- OneRail, an Austin-based point-of-sale startup, raised $9 million in Series A funding. Ironspring Ventures led the round.

- Octane, a New York City-based billing startup, raised $2 million. Basis Set Ventures led the round and was joined by investors including Dropbox co-founder Arash Ferdowsi, Github CTO Jason Warner, Fortress CTO Assunta Gaglione, and Scale AI CRO Chetan Chaudhary.

PRIVATE EQUITY

- Vice Media, the New York City-based media business, is raising $85 million and is no longer pursuing a SPAC, per the Information. Investors included Lupa Systems, TPG, TCV, and Sixth Street Partners.

- Centre Partners recapitalized Midwest Mobility Solutions, an AT&T authorized retailer. Financial terms weren't disclosed.

- CVC Capital Partners and TA Associates are acquiring a stake in Mediaocean, a New York City-based advertising platform, from Vista Equity Partners. Financial terms weren't disclosed.

- Computer Design & Integration, a portfolio company of One Equity Partners, acquired Candoris, an Annville, Pa.-based tech consultancy. Financial terms weren't disclosed.

- Empire Portfolio Group, backed by Revelstoke Capital, acquired ten Orangetheory Fitness studios in North Carolina. Financial terms weren't disclosed.

- Pritzker Private Capital acquired a stake in Monogram Foods, a Memphis, Tenn.-based food manufacturing business. HF Capital also invested. Financial terms weren't disclosed.

- Smart Care Equipment Solutions, backed by Audax Private Equity, acquired Horizon Bradco, a New York City-based service provider of commercial refrigeration to supermarkets. Financial terms weren't disclosed.

- Turnspire Capital Partners acquired Daniel Measurement and Control business, an energy measurement business, from Emerson Electric (NYSE: EMR). Financial terms weren't disclosed.

EXIT

- Playtika will acquire Reworks Oy, a Finnish maker of a design gaming app, for up to $600 million. EQT Ventures backs Reworks.

- Lightspeed (NYSE: LSPD) acquired NuOrder, Los Angeles-based platform connecting retailers to brands, for $425 million from Argentum. Financial terms weren't disclosed.

- Genstar Capital acquired Arrowhead Engineered Products, a Blaine, Minn.-based distributor of aftermarket replacement parts for the off-road end markets, from Investcorp and The Riverside Company. Financial terms weren't disclosed.

 - VectivBio (Nasdaq: VECT) agreed to acquire Comet Therapeutics, a Cambridge, Mass.-based biotech focused on severe rare conditions. Comet is backed by investors including Inkef Capital and Sofinnova Partners. Financial terms weren't disclosed.

OTHER

- Prosus NV acquired BillDesk, an Indian payments company, for $4.7 billion. 

- Yandex acquired Uber's stakes in their joint Russian foodtech, delivery and self-driving businesses. It also increased its stake in their ride-hailing joint venture. The deal is valued at $1 billion.

- Sequential Brands Group, the parent company of brands including Jessica Simpson’s brands, filed for bankruptcy.

IPO

- iFIT Health & Fitness, a Logan, Ut.-based exercise equipment maker, filed for an IPO. The company posted $851.7 million in revenue in 2020 and a net loss of $98.5 million. Pamplona and L Catterton back the firm.

- Mattress Firm, a Houston-based mattress company, is weighing a public offering, according to Bloomberg. Steinhoff International Holdings owns a majority stake in the company.

- Brusa Elektronik, a Swiss electric train components developer, is planning to go public this year, per Reuters. An IPO could value the company at up to $1.1 billion.

- TAB Food Investments, which runs the Chinese and Turkish chains for Burger King and Popeyes, is preparing to go public in Turkey, according to Bloomberg. An IPO could raise about $250 million.

- ACWA Power International, a Saudi Arabian power, renewable energy and water production plant operator, intends to announce plans to go public in the country as soon as this week, per Bloomberg. Saudi Arabia’s Public Investment Fund owns 50% of the company.

- Sunac China Holdings, a Beijing-based property developer, is weighing whether to take its ski parks business public in a Hong Kong IPO, according to Bloomberg.

PEOPLE

- Telstra Ventures, a San Francisco-based venture investor, promoted Saad Siddiqui to general partner.  

- Verizon Ventures, the venture arm of Verizon, added Eyal Mamistvalov, a former member of Amazon Web Services' business development team, as a principal based in Tel Aviv.

F+FS

- Clearlake Capital, a private equity investor, set a $10 billion target for its seventh namesake fund, per The Wall Street Journal.

- Coral Capital, a Tokyo-based early-stage venture capital investor, is raising $130 million. Investors include Founders Fund. 

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