Even if a startup takes a cut to its valuation, it’s completely possible that investors who took an early stake may still be doing just fine. After all, these true believers took a bet on the company when it was just barely a full business, buying in often at a fraction of the valuation of the company even after a downround.
Meaning as a whole, said early investors may still make more than they put into the company, despite the turmoil that led to the haircut.
But that dynamic doesn’t seem to have played out in the same way for investors that led the earliest stages of venture funding for mattress company Casper.
Even after Durational Capital Management announced plans to take the company private Monday in a deal offering more than double Casper’s Friday share price, the new premium still fails to make those who led its Series A and Series B rounds whole again.
Once valued at roughly $1 billion, the Monday announcement values Casper at about $286 million, of $6.90 a share. Based on Securities and Exchange Commission filings as well as sources with knowledge of the matter, that means that NEA, which led Casper’s 2014 Series A, would be underwater with its stake with the Durational deal. The venture investor plowed about $66 million into the business over multiple private rounds, even acquiring an additional stake in the mattress startup’s IPO. That stake, which NEA still holds based on the most recent SEC filings, is now valued at about $43 million.
Similarly, Menlo Park, Calif.-based IVP led Casper’s 2015 Series B investment, participated in following rounds, and later also acquired an additional stake in the company’s 2020 public listing. In total, IVP invested about $46.5 million in Casper. Based on its most recent SEC filings, that stake is now worth $25 million with Durational’s deal.
Not all investors however failed to breakeven: New York City-based Lerer Hippeau led Casper’s nearly $1.9 million seed round, and also participated in later rounds of funding. In total, a spokesperson says the venture capital firm invested a total of $6 million in the business. Which means yes, the investor is above water in its investment, with a stake now worth about $9 million based on SEC filings. It’s far from the most dramatic returns, but it is better than a loss.
And that is also the underpinning of the Durational deal—Casper has lost so much public market investor confidence that Durational’s investment comes as something of a saving grace. While Casper’s revenue has been growing, it’s also been burning cash rapidly—a fact only worsened by its falling stock price. They were “on the verge of default,” says Seth Basham, an analyst with Wedbush.
Meaning taking Casper private via Durational may not be the best deal ever in mankind, but it does do a double duty of styming some of the losses felt by its private market investors—even if it does not make them whole again—while also taking the company out of the public eye. And that’s something that Casper, a company that has never really quite grown into the shoes of a public one, needs.
A WEWORK SPINOUT BOUNCES BACK: Conductor, which helps companies figure out their marketing strategy through say higher placements on Google, raised $150 million in funding—about half in primary, and the other secondary—valuing the company at about $500 million. Bergal Sagemount led the round.
It’s a stunning bounceback for the company, which was acquired by WeWork for approximately $120 million in 2018—only to be bought back at a mere fraction of that price (WeWork later said it gained about $3.5 million from the sale, though Conductor also returned additional WeWork shares) by Conductor’s founders in 2019, when WeWork was flailing and rushing to cut non-core businesses.
Conductor CEO Seth Besmertnik said the goal of the re-acquisition back then was to keep employees on the payroll. It seems to have paid off: Besmertnik says Conductor has not held any layoffs, and is now over 300 strong.
Lucinda Shen
Twitter: @shenlucinda
Email: lucinda.shen@fortune.com
VENTURE DEALS
- Faire, a San Francisco-based online wholesale marketplace, raised $400 millionin Series G funding. Durable Capital Partners led the round and was joined by investors including D1 Capital Partners and Dragoneer Investment Group. It values the company at $12.4 billion.
- Upgrade, a San Francisco-based credit and mobile banking company, raised $280 million in Series F funding valuing it at $6 billion pre-money. Coatue Management and DST Global led the round and were joined by investors including Dragoneer Investment Group, Gopher Asset Management, G-Squared, Koch Disruptive Technologies, Old Well Partners, Ribbit Capital, Sands Capital, Ventura Capital, and Vy Capital.
- ACELYRIN, a Los Angeles-based biopharma, raised $250 million in Series B funding. Investors included AyurMaya (linked to Matrix Capital), Surveyor Capital (a Citadel company), and Westlake Village BioPartners.
- GrubMarket, a San Francisco-based food tech company, raised $200 million in Series E funding. Tiger Global Management led the round and were joined by investors including BlackRock, Liberty Street Funds, Apeira Capital, Japan Post Capital, Celtic House Asia Partners, We Capital, and Walleye Capital valuing it over $1.2 billion.
- Mixpanel, a San Francisco and Boston-based provider of product analytics, raised $200 million in Series C funding. Bain Capital Tech Opportunities led the round valuing it at $1.1 billion.
- H1, a New York City-based healthcare network, raised $100 million in Series C funding. Altimeter Capital led the round.
- Justt, a chargeback mitigation solution maker, raised $70 million across three tranches, including a Series B round led by Oak HC/FT and two rounds led by Zeev Ventures and F2 Venture Capital, respectively.
- Lifen, a French medtech startup, raised $58 million (€50 million). Creadev and Lauxera Capital Partners led the round.
- Ribbon Health, a New York City-based API data healthcare company, raised $43.5 million in Series B funding. General Catalyst led the round and was joined by investors including Andreessen Horowitz, BoxGroup, Rock Health, and Sachin Jain.
- Dubit, a London and Washington D.C.-based games studio, raised $8 million. Metaventures Jean-Charles Capelli led the round valuing it at $55 million.
- EasySend, an Israel-based customer platform, raised $50.5 million in Series B funding. Oak HC/FT led the round and was joined by investors including Vertex IL, Intel Capital, and Hanaco Venture.
- Alluxio, a San Mateo, Calif.-based open source data orchestration software company, raised $50 million in Series C funding. Investors included a16z, Seven Seas Partners, and Volcanics Ventures.
- Synthace, a London and Boston-based life sciences software company, raised $35 million in Series C funding. Horizons Ventures and Sofinnova Partners led the round.
- Aplazo, a Mexico City-based buy now, pay later company, raised $27 million in Series A funding. Oak HC/FT led the round and was joined by investors including Kaszek and Picus Capital.
- Steadily, an Austin-based landlord insurance company, raised about $27 million in Series A funding. Matrix Partners and Zigg Capital led the round and were joined by investors including Vesta Ventures, Peak State Ventures, Nine Four Ventures, and Next Coast Ventures.
- PathologyWatch, a Salt Lake City-based digital lab and pathology platform for dermatologists, raised $25 million in Series B funding. Investors included Ceros Capital Markets, Rock Creek Capital, Springtide Capital, Spark Growth Ventures, Blueprint Health, and Blackbrook Management Group.
- Bit, an Israel-based maker of open-source tools, raised $25 million in Series B funding. Insight Partners led the round and was joined by investors including Disruptive VC.
- JuneShine, a San Diego-based alcohol brand, raised $24 million in Series B funding. Amberstone and Litani Ventures led the round.
- Intelligo, a New York City-based risk intelligence platform for investment due diligence, raised $22 million from Felicitas Global Partners.
- XTEND, an autonomous drone company, raised $20 million as part of its Series A. Chartered Group led the round.
- GlossGenius, a New York-based business solution for the beauty and wellness industry, raised $16.4 million in Series A funding. Bessemer Venture Partners led the round and was joined by investors including Tobias Lutke (co-founder & CEO of Shopify), Chris Comparato (co-founder & CEO of Toast), and Robert Murphy (co-founder of Mindbody).
- Clarapath, a Hawthrone, N.Y.-based pathology robotics company, raised $15.5 million in additional Series B funding. Investors included The 4100 Group (Investment Arm of Delta Dental).
- Sleek.com, a Singapore-based company for incorporation and accounting services, raised $14 million in Series A funding. White Star Capital and Jungle Ventures led the round.
- Goody, a Miami-based maker of a personalized corporate and consumer gifting app, raised $15 million in funding. SoftBank through its Latin America Fund led the round.
- Cognixion, a Santa Barbara, Calif.-based a smart home control startup, raised $12 million in seed funding. Prime Movers Lab led the round with co-investors Northwell Health, Amazon Alexa Fund, and Volta Circle.
- Imprint, a New York City-based branded payments and rewards company, raised $38 million in Series A funding. Kleiner Perkins led the round and was joined by investors including Stripe.
- Marani Health, a Minneapolis-based digital prenatal and postpartum care company, raised $7.6 million in seed funding . Investors included OneAlphaNorth Capital.
- Nirvana, a New York City-based mental healthcare payments company, raised $7.5 million. Inspired Capital led the round and was joined by investors including Eniac Ventures, RTP Seed, and Arc Ventures.
- FoodByUs, an Australian wholesale foods marketplace, raised A$10 million ($7.4 million) in Series A funding. Investors included FJ Labs.
- SnapAttack, a Washington D.C.-based cybersecurity firm, raised $8 million in funding. Volition Capital led the round.
- Carketa, the Utah-based developer of car dealership software, raised $6 million in Seed funding. Origin Ventures and Crosslink Capital led the round.
- SOS, an interactive vending machine operator, raised $3.4 million in funding. For Later led the round.
PRIVATE EQUITY
- KKR & Co and Global Infrastructure Partners agreed to take CyrusOne, a data center operator, for about $11.5 billion in cash.
- KKR is investing in Beacon Pointe, a New Port Beach, Calif.-based registered investment advisor, valuing it over $1 billion, per Barron’s. Abry Partners exited. Financial terms weren't disclosed.
- Arbor Investments recapitalized Dr. G's Creations, an Athens Ga.-based bread and bakery ingredients maker. Financial terms weren't disclosed.
- Kiniciti, backed by Biospring Partners and Welsh, Carson, Anderson & Stowe, acquired Ncardia, a leader in developing stem cell-based drug discovery and cell therapy firms, for about $60 million.
- New Mountain Capital acquired Profile Products, a Buffalo Grove, Ill.-based developer and manufacturer of specialty agriscience materials. Financial terms weren't disclosed.
- PestCo, backed by Thompson Street Capital Partners, invested in Ecoteam, a pest control services provider. Financial terms weren't disclosed.
- The Stepping Stones Group, backed by Five Arrows Capital Partners, acquired Behavioral Learning Center, a California-based therapeutic and behavioral company. Financial terms weren't disclosed.
- TPG Capital invested in Troon, a Scottsdale, Ariz.-based golf and club-related leisure and hospitality services company. Financial terms weren't disclosed.
- Spectra Premium Mobility Solutions, backed by Turnspire Capital Partners, acquired the assets of Spectra Premium Industries, a Canadian manufacturer and distributor of thermal and fluid management products. Financial terms weren't disclosed.
- Wind Point Partners, a portfolio company of The Kleinfelder Group, acquired Century Engineering, a Hunt Valley, Md.-based engineering services company. Financial terms weren't disclosed.
EXIT
- EQT and Goldman Sachs Asset Management acquired Parexel, a clinical research organization, from Pamplona Capital Management for $8.5 billion.
- Centre Partners Management acquired KNS, a U.S. designer of branded footwear, from Tower Arch Capital.
- MoneyLion acquired MALKA Media Group, a Jersey City, N.J.-based creator network and content platform. Financial terms weren't disclosed.
- Ensign-Bickford Industries acquired Cawood Scientific, a European scientific research and analysis group, from Waterland Private Equity. Financial terms weren't disclosed.
- Restaurant Brands International will acquire Firehouse Subs, the quick-service sandwich maker, for $1 billion.
OTHER
- CBOE Global Markets agreed to buy Aequitas Innovations, a Canadian stock exchange operator. Financial terms weren't disclosed.
F+FS
- Point72 closed a $600 million funding round for Point72 Hyperscale, its inaugural private equity fund.
- Paradigm raised $2.5 billion in the largest crypto fund yet.
PEOPLE
- Radical Ventures added John Megrue as a partner and vice chairman. He was previously co-Chairman of Bridgewater.
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