Nextdoor CEO Sarah Friar throws down a gauntlet to social media companies—and to herself

It can connect people from completely different continents—but it can also silo neighbors in their own corners of the internet with algorithms that reinforce only what they already believe. It can increase voter turnout—but it can also unduly affect election outcomes with false information. 

At Fortune’s Most Powerful Women Summit in Washington D.C. on Wednesday, Nextdoor CEO Sarah Friar attributed these unintended outcomes to a mentality well-known within startups, blitzscaling. The solution? Slow people down. As my colleague, Christiaan Hetzner writes:

“‘Some of the toughest discussions have been the tradeoff between engagement and growth versus slowing people down, and I don’t think enough platforms are doing that,’ the CEO noted. ‘That growth-at-any-cost mentality is what is really damaging us in terms of areas like social media.’”

Her words come not only as a challenge to media giants like Facebook and Twitter, but also to Nextdoor itself: A challenge to find a new business model forward. And that won’t be easy because Nextdoor has faced some of the same issues described above. Backed by the likes of Greylock Partners, Benchmark, and Shasta Ventures, the company grew quickly during the pandemic. But with a heavy audience overlap with Facebook, it’s also increasingly played the role of a local newspaper in smaller communities. Last summer, the business came under fire over users racially profiling their peers. The company put in speed bumps for users that looked to be reporting a crime (making sure they aren’t using race as a decider). Though more controversially, it also appears to be using unpaid community moderators to enforce guidelines.

In contrast to Friar’s comments on slowing down, Nextdoor soared to a $4.3 billion valuation earlier this year after announcing plans to go public in a merger with a Khosla Ventures SPAC—a method of becoming a public company that is considered faster than the traditional IPO process. Hopefully, as the company grows and faces the new pressures of being a public company, it will also keep those words from Wednesday in mind.

CLASSPASS: After a tumultuous year for gyms, ClassPass, which offers passes to workout classes and more, is being acquired by Mindbody. Sixth Street is also investing $500 million in the deal. ClassPass was last valued at $1 billion in Jan. 2020—just before the pandemic hit. The question on everyone’s mind now: How much did it sell for?

LIGHTNING ROUND: Stripe is reentering crypto. The Sussexes are becoming “impact partners” at Ethic, a fintech asset manager backed by investors including Nyca Partners.

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

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

VENTURE DEALS

- Tala, a Los Angeles-based financial services startup, raised $145 million in Series E funding. Upstart (Nasdaq: UPST) led the round and was joined by investors including Stellar Development Foundation, Kindred Ventures, the J. Safra Group, IVP, Revolution Growth, Lowercase Capital, and PayPal Ventures.

- GRIN, a Sacramento, Calif.-based marketing software company focused on direct-to-consumer brands, raised $110 million in Series B funding. Lone Pine Capital led the round and was joined by investors including Danielle Bernstein (of WeWoreWhat), fitness influencer Devon Levesque, and The Chainsmokers. The deal values the business at $910 million.

- Outschool , a San Francisco-based edtech, raised $110 million in Series D funding valuing it at  $3 billion. Tiger Global Management led the round and was joined by investors including BOND, Lightspeed Ventures, Union Square Ventures, Reach Capital, Coatue, FundersClub, and SV Angel.

- Lark Health, a Mountainview, Calif.-based disease prevention health care company, raised $100 million in Series D funding. Deerfield Management Company led the round and was joined by investors including PFM Health Sciences, Franklin Templeton, King River Capital, Castlepeak, IPD, Olive Tree Capital, and Marvell Technology cofounder Weili Dai.

- Zone & Co, a Boston-based billing and revenue tech maker, raised $76 million. Insight Partners led the round.

- Zeus Living, a long-term stay marketplace, raised $55 million. SIG led the round and was joined by investors including Initialized Capital, CEAS Investments, TI Platform, NFX, Opendoor’s Eric Wu and Miras.

- Juni, a Swedish e-commerce and marketing spend tracking software company, raised $52 million in extended Series A funding. EQT Ventures led the round.

- Impartner, a Salt Lake City-based partner relationship software company, raised $50 million in funding. Brighton Park Capital led the round.

- Groove, a San Francisco-based sales engagement company, raised $45 million in Series B funding. Viking Global Investors led the round and was joined by investors including Capital One Ventures, Level Equity, Quest Venture Partners, and Uncork Capital.

- Space Perspective, a Cape Canaveral, Fla.-based spaceflight experience company, raised $40 million in Series A funding. Prime Movers Lab led the round.

- ResQ, a Toronto-based maker of software for restaurant repair and maintenance, raised $39 million in Series A funding.  Tiger Global and Canvas Ventures led the round.

- Axial Therapeutics, a Woburn, Mass.-based neurological diseases biopharmaceutical company, raised $37.3 million in Series C funding. OneVentures led the round and was joined by investors including Autism Impact Fund and Corundum Systems Biology.

- Sprinter Health, a Menlo Park, Calif.-based company sending nurses and phlebotomists into the home, raised $33 million in Series A funding. Andreessen Horowitz led the round and was joined by investors including General Catalyst, Accel, and Google Ventures.

- Karma, a Tel Aviv-based shopping assistant tech maker, raised $25 million in Series A funding. Target Global led the round and was joined by investors including MoreTech Ventures, NFX, and Altair Capital.

- At-Bay, a San Francisco-based insurance company, raised $20 million in extended Series D funding valuing it at $1.4 billion. ION Crossover Partners was among the investors.

- Matik, a San Francisco-based maker software for creating presentations, raised $20 million in Series A funding. Andreessen Horowitz led the round and was joined by investors including Menlo Ventures, BoxGroup, and Oceans Ventures.

- Ohi, a New York City-based warehousing company focused on delivering under two-hours, raised $19 million in Series A funding. Palm Drive Capital led the round and was joined by investors including JAM Fund.

- Nexla, a San Mateo, Calif.-based maker of data collaboration software, raised $12 million in Series A funding. Industry Ventures led the round and was joined by investors including Liberty Global Ventures, Blumberg Capital, Engineering Capital, Storm Ventures, and Correlation Ventures.

- Flux, a San Francisco-based maker of a collaboration platform for electronics design and engineering, raised $12 million. Outsiders Fund led the round and was joined by investors including Bain Capital Ventures, 8VC, and Liquid2VC.

- Seraphina Therapeutics, a San Diego-based company focused on the discovery of fatty acids and micronutrient therapeutics, raised $5 million in Series A funding. Investors include Domain Associates, Benvolio Group, former Coach CEO Lew Frankfort, and former Vitamin Shoppe CFO Larry Segall, and Cue Ball Capital.

- SWFT, a New York City-based mobility company, raised $10 million. Investors include Martin Lauber (Managing Partner of 19 York), Mark Joseph (CEO of Mobitas Advisor), and David Zwick (Managing Director, RedCap Technologies). 

- Better Health, a San Francisco-based medical supply company, raised $10 million in Series A funding. Caffeinated Capital and General Catalyst led the round and were joined by investors including Bill Ackman’s family office, Table Management, 8VC, Anorak Ventures, Tank Hill Venture Partners, Motive Science, Modern Ventures, and Unpopular VC.

- ScienceIO, a patient data startup, raised $8 million in seed funding. Investors include Section 32, Sea Lane Ventures, Lachy Groom, and Josh Buckley.

- Stage11, a Paris-based music startup, raised €5 million in seed funding. Otium Capital led the round.

- SparkPlug, a San Francisco-based retail tech startup, raised $2.5 million in seed funding. Investors include TenOneTen Ventures, Jason Calacanis, and Argonautic Ventures.

- Perx Health, an Australian digital health startup, raised AUD$3 million ($2.2 million) in seed funding. AirTree Ventures led the round.

- Grounded Foods Co., a California-based maker of dairy cheese alternatives, raised $2.5 million in pre-Series A funding. Investors include Big Idea Ventures and Stray Dog Capital.

- Spaced Ventures, a Cape Carnaveral, Fla.-based crowdfunding platform for investing in space startups, raised $1.2 million in seed funding. WorldQuant Ventures led the round.

PRIVATE EQUITY

- Francisco Partners invested in Paradigm, a San Francisco-based legal software solutions provider. The deal values the company at $400 million, per Reuters.

- Francisco Partners invested $50 million in MATRIXX Software, a Silicon Valley, Calif.-based 5G monetization company.

- 48forty Solutions, a portfolio company of Audax Private Equity, acquired J&B Pallet, a Lake City, Minn.-based provider of recycled wood pallets. Financial terms weren't disclosed.

- Adenia Partners acquired Red Lands Roses, a grower of roses in Kenya. Financial terms weren't disclosed.

- Aevi Capital and Sage Capital acquired ATS Scientific, an Ontario-based laboratory equipment company. Financial terms weren't disclosed.

EXITS

- A group of investors including Gamut Capital Management and British Columbia Investment Management acquired PS Logistics, a Birmingham, Ala.-based freight transportation company, from One Equity Partners. Financial terms weren't disclosed.

- SumUp acquired Fivestars, a San Francisco-based payments and marketing company, for about $317 million in cash and stock. Fivestars had been backed by investors including HarbourVest Partners and Menlo Ventures.

- Ontario Teachers' Pension Plan Board agreed to acquire a majority stake in Vantage Elevator Solutions, a North American designer, manufacturer and distributor of elevator components and systems. Golden Gate Capital, will retain a significant minority stake. Financial terms weren't disclosed.

- Penn Foster acquired Carrus, a healthcare learning content company, from Revelstoke Capital Partners. Financial terms weren't disclosed.

- Riot Games acquired the team from Kanga, a maker of products in the gaming space. Kanga was backed by Courtside Ventures, Tusk Ventures, Point72 Ventures, BAM Ventures, Oceans Ventures, Cassius Family, Dune Ventures, and SV Angel.

OTHER

- Poshmark (NAS: POSH) acquired Suede One, a New York City-based virtual authentication platform for sneakers. Financial terms weren't disclosed.

- Dataminr acquired Krizo, a Denmark-based crisis response software maker. Financial terms weren't disclosed.

- AlphaSense will acquire Stream Mosaic, a San Jose, Calif.-based transcript library. Financial terms weren't disclosed.

IPO

- Rubix Group Holdings, a UK-based industrial maintenance and repair company, plans to raise $986 million in an IPO in London, per Bloomberg. Advent International backs the firm.

- GitLab, a remote web-based development operations company, raised $801 million in an offering of 10.4 million shares (19% sold by insiders) priced at $77 apiece—it had previously planned to price shares up to $69. The company posted $152.2 million in revenue in the 12 months ending in Jan. 2021 and a net loss of $192.2 million. August Capital, Google Ventures, ICONIQ Capital, and Khosla Ventures back the firm.

- WCG Clinical, a Princeton, New Jersey-based clinical trial solutions company, withdrew its registration for an IPO. It had planned to raise up to $765 million. Leonard Green & Partners and Arsenal Capital Partners back the firm.

- IHS Holding, a London-based telecom infrastructure developer, raised $378 million in an offering of 18 million shares priced at $21 per share—it had previously planned to offer 23 million shares. The company posted $1.4 billion in revenue in 2020 and a loss of approximately $323 million. Wendel, Emerging Capital Partners, Mobile Telephone Networks, and Korea Investment Corporation back the firm.

- Aris Water Solutions, a Houston, Tex.-based environmental infrastructure and solutions company, plans to raise up to $318 million in an offering of 17.7 million shares priced between $16 and $18 per share. The company reported $171 million in total revenue in 2020 and net income of $7,000. ConocoPhillips, Trilantic Capital Partners, Yorktown Partners, and HBC Investments back the firm.

- Stronghold Digital Mining, a Kennerdell, Pa.-based eco-friendly Bitcoin mining company, plans to raise up to $106 million in an offering of 5.9 million shares priced between $16 and $18 per share. The company generated $4.1 million in total operating revenue in 2020 and reported a net loss of $145,000. 

- ​​​​Winc, a Santa Monica, Calif.-based wine club membership company, plans to raise up to $80 million in an offering of 5 million shares priced between $14 and $16 per share. The company posted $65 million in net revenue in 2020 and reported a $7 million net loss. Bessemer Venture Partners, Shining Capital, and Cool Japan Fund back the firm.

- Lucid Diagnostics, a New York City-based chronic heartburn diagnostics company, raised $70 million in an offering of 5 million shares priced at $14 per share. The company reported a net loss of $8 million in 2020 and has yet to post significant revenue. Medical device company PAVmed and Case Western Reserve University back the firm.

- UserTesting, a San Francisco-based customer insights platform, filed for an IPO. The company reported $93 million in revenue in 2020 and a net loss of $34 million. Accel, Insight Partners, Greenspring Associates, and OpenView Venture Partners back the firm.

- Cian, a Russian online real estate classifieds site, filed for an IPO in the U.S. The company posted $55 million in revenue in 2020 and reported a loss of $9 million. Elbrus Capital and Goldman Sachs back the firm.

- MDxHealth, a Belgian urologic solution diagnostics company, filed for an IPO in the U.S. The company posted $18 million in revenue in 2020 and reported $29 million in losses for the year. MVM Partners, Valiance Asset Management, and Soleus Capital Management back the firm.

- Zongteng Group, a Chinese logistics company, is weighing an IPO as soon as next year, per Bloomberg. GLP backs the firm.

SPAC

- SeatGeek, a New York City-based ticket platform, agreed to merge with RedBall Acquisition Corp., a SPAC led by Billy Beane, backer of Oakland Athletics, and Gerry Cardinale of RedBird Capital Partners.

F+FS

- Paradigm, a cryptocurrency firm backed by Coinbase co-founder Fred Ehrsam, is looking to raise a $1.5 billion fund for startup investments, per CoinDesk.

- Sole Source Capital, a Dallas-based industrial-focused private equity firm, raised $555 million for SSC Partners II.

- Evolution Equity Partners, focused on cybersecurity and enterprise, closed a $400 million

PEOPLE

- Angular Ventures, a London-based investor, added David Peterson as the firm’s second full partner. It also raised $80 million for its second fund.