Blockchain, Chief Data Officers, and fraud: Here’s what the Crystal Ball predicts for 2022
Hi there, Term Sheeters. Welcome to 2022, and a very special annual edition of Term Sheet.
To launch us into the New Year, we asked our readers to gaze into their crystal ball and tell us what comes next.
We asked, and you delivered. I’ve spent the last week or so parsing through and thinking over hundreds of quick takes, analytical predictions, and insight-induced hunches. Our readers are expecting dramatic change in 2022. Here’s what this year may have in store, in your words:
(Note: Some answers have been shortened for clarity and/or brevity)
E-COMMERCE: NFT time
“In a world of digital consumption that has only been accelerated by the pandemic, consumer brands focused on health wellness will integrate NFTs to 1) incentivize healthy behavior 2) reward loyalty and 3) build brand equity. There will be subscription-based membership models utilizing NFTs to provide exclusive access or a first look at new product drops as well as products and services leveraging NFTs for VIP status that can unlock giveaways, rewards or pricing,” Lisa Blau, founding partner, Able Partners
“The Amazon Third Party Seller Ecosystem will raise over $15 billion of capital,” Ali Hamed, general partner, Crossbeam Venture Partners
DATA: Privacy is king
“In 2022, we’ll see more Big Tech companies introduce new privacy features in an attempt to appease consumers and policymakers. The same companies introducing these changes will likely become more vulnerable as consumers hold them accountable for protecting user data,” Steffen Schebesta, CEO North America, Sendinblue
“Today 55% of F1000 enterprises have Chief Data Officers. Over the next 3 years, it’ll approach 100%,” Derek Zanutto, general partner, CapitalG
CRYPTO AND BLOCKCHAIN: All eyes on JPMorgan Chase
“Jamie Dimon will turn around and publicly support Bitcoin and start providing crypto custody solutions for their clients,” Edith Yeung, general partner, Race Capital
“In 2022, Amazon and/or Walmart will make a splashy $2.5B+ crypto acquisition. Among this crypto company’s core competencies will be online crypto payment processing and facilitation (i.e. a “Stripe for Crypto”),” Addie Lerner, founder and managing partner, Avid Ventures
“Wages will become visible via blockchain,” Joe Miller
“2022 will likely see a continuation of the 2021 trend of an increasing number of companies adding Bitcoin and other digital assets to their balance sheets, and that will result in traditional financial firms rushing to support these investments through their treasury departments and other business lines that will need to be able to support crypto assets,” Leah Wald, CEO at Valkyrie Funds
CYBERSECURITY: Crime on the rise
“Rogue states and bad actors enjoying the payoff from their successful recent exploits will become even more sophisticated, capable and dangerous adversaries. Expect the average cost of cybercrime to double for enterprises in 2022. Unfortunately, we predict 3-5 massive data breaches collectively compromising data on 1 billion individuals. The fraud will cost these companies hundreds of millions of dollars in direct losses and billions in long-term reputational damage,” James Luo, vice president, CapitalG
“Buy now, pay later fraud will skyrocket. BNPL exploded in 2021, with fintechs and banks alike offering consumers a more flexible alternative to traditional forms of financing and payment plans like layaway… In the year ahead, I expect BNPL to become an increasingly popular target for fraudsters. From false account signups to account takeover attacks using stolen personal information from the Dark Web, fraudsters will leverage loopholes in the application process to take advantage of the surge in BNPL payments to steal items ranging from fast food to big ticket items like electronics and furniture, leaving the vendor and the consumer to pay the price,” Brittany Allen, Trust and Safety Architect, Sift
“In 2022, expect greater demand for security from Boards, investors, customers, and employees for organizations to close the gap between cyber and physical security efforts. Companies will be thinking about how all actions they take keep people safe–from vaccine mandates to online security and everything in between–are connected and need to work together holistically,” Juliette Kayyem, former assistant secretary for intergovernmental affairs, U.S. Department of Homeland Security
CREATOR ECONOMY: More money, more content
“The value of the creator economy will double in 2022,” Mike Donoghue, CEO and co-founder, Subtext
“If every company was poised to become a fintech company in 2020, every creator is poised to need a fintech company and to become a business in 2022. There are 50M+ creators out there looking to turn their fun, after-hours passions into a money-making company and so much of the stack for these creators is still missing,” Jesse Middleton, general partner, Flybridge
“In 2022, corporations will choose synthetic video (often augmented with digital avatars) to produce ‘non-critical’ video assets—devouring once reliable demand for traditional video production,” Jeremy Kaufmann, principal, Scale Venture Partners
“Industries like healthcare that have long lagged behind in terms of technological advancement will start to catch up as they adopt automation: Healthcare will catch up in AI, because the pandemic forced many companies to test drive these solutions, and what they found is that today’s platforms are sophisticated enough to deal with the messy, human-generated data that’s endemic to this industry.” Dr. Bob Lindner, CTO, veda
“As practices offer more digital payment features, such as Card on File, online payments, text to pay, and QR codes, patients become more prone to pay. This also allows practices to replace outdated processes that involve manual data entry, paper-based bills, and phone-based follow-up calls with terminal-less, contactless payment options that modernize offices … We expect to see greater adoption of payment plans in the healthcare space as more patients are able to manage their financial expenses better by paying in affordable installments.” Michelle Dowling, VP of Marketing, Rectangle Health
CLIMATE: Dragons unite
“2022 will reveal the world’s first Climate-tech startup ‘dragon’ (a private startup valued at $12B+),” Brian Walsh, Head of WIND Ventures
“A blockchain collective will buy a coal company in order to shut it down,” Andy Frank, president, Sealed
“In 2022, VCs will widen their investment focus to include solutions that enable climate adaptation, alongside mitigation … Innovations like drought-resistant plant seeds, fireproof homes, and energy-efficient HVAC will see increased demand as the need to battle climate change today becomes more acute,” Julia Reichelstein, Investor, Piva Capital
“Crop shortages will lead to a spike in prices, creating widespread inflation fears leading to a huge bond selloff and other high spec assets like Bitcoin, etc.” Ed Amberger, HCM
“We will see further acceleration into investments in proptech, which last year decisively became one of the largest, highest-performing and most compelling categories of the venture capital markets,” Brendan Wallace, Co-Founder & Managing Partner, Fifth Wall
VR/META: Data meets virtual world
“The biggest trend will be the AR/VR space, especially with Facebook/Meta continuing to heavily invest. But, the topic that will arise from this trend is the privacy implications of these virtual environment[s] created by companies who have been liberal with how they share and sell customer data,” Paige Leidig, NetBase Quid
“The ‘metaverse”’is not a new concept. But as the pandemic continues to trudge on and more organizations turn to digital-native and digital-first platforms to fuel everyday communication, work, life and commerce experiences, the identity landscape will continue to grow exponentially – opening up new gateways and threat vectors to potential bad actors,” Larry Chinski, VP of Global IAM Strategy, One Identity
GEOGRAPHY: The Great Departure from Silicon Valley
“2022 is going to be the year that Africa breaks out. With all of the investment $ looking for places to land it is just a matter of time before all of the talent in Africa is discovered and investment follows,” Jules Walker, senior director, KPMG
“Regions outside Silicon Valley will continue to grow. The two I am most excited about: LA (Southern Cal): A terrific mix of available financing, creative talent (highest density of artists, musicians, creators, etc), and more and more entrepreneurs are moving to So Cal for the quality of life (beaches, sun, etc). Lisbon, Portugal: High percentage of English speakers, Very low tax basis, beautiful area, high quality of life,” Luke Pappas, Principal, New Enterprise Associates
“Latin America stays red hot. Investment activity in Latin America has exploded in the last couple of years, and shows no sign of slowing in 2022 … More services firms will expand into Latin America to build out nearshore delivery centers, taking advantage of the proximity, lower cost labor and access to an increasing number of STEM graduates. As LATAM interest picks up and more capital enters the region, the competition for tech talent in the major hubs will lift wages, but not to the extent of other markets,” Lisa Burton, Partner, Tercera
DEALMAKING, IN GENERAL: Overvalued
“Significantly more downrounds amongst VC-backed firms. LOTS more stories about conduct issues in high grown / high leverage PE and VC-backed firms,” Kevin
“The private secondaries market will cross $125 billion in transacted volume with more M&A from asset managers in the industry. Furthermore, given overvalued public markets, private equity will continue to boom with record inflows in 2022,” Sunaina Sinha Haldea, Global Head, Private Capital Advisory, Raymond James
“The S&P 500 will close down 10% or more in 2022,” Ryan Holden, ADP
“I expect that we’ll see more venture firms become registered investment advisors (RIAs),” Don Butler, Thomvest Ventures
ETC: Your mom
“Everyone and your mother will have a VC fund.”
“Jerome Powell will say, ‘I was wrong, but so was everybody else,’” Joe M.
“Season 4 of Succession will feature a huckster VC character. NFTs will inevitably be involved,” Chase Roberts, Vertex Ventures
Still on hold re: Holmes: We’re still awaiting the verdict for Elizabeth Holmes, who, as we all know, has been on trial for 11 counts of wire fraud as well as conspiracy to commit wire fraud for allegedly lying about Theranos technology. If you’re like me, you may have spent a dozen hours of your holiday binge-listening the podcast Bad Blood: The Final Chapter in anticipation of the jury’s decision.
This whole case has me pondering just what questions investors and reporters should be asking to avoid this, and to whom. There’s far more than investment returns at stake here: Theranos delivered shoddy results to real people. The company had to void or correct nearly one million blood test results, some of which indicated that patients had prostate cancer—or, in at least one case, were HIV positive—when they were actually healthy. More on all that when the verdict comes out. In the meantime, I highly recommend this episode to learn how Holmes misled Fortune and used our Theranos cover story to help land hundreds of millions of funding.
Now, for a longer-than-usual deals section.
See you tomorrow,
- Rec Room, a Seattle, Wash.-based social gaming and virtual sports platform, raised $145 million in funding led by Coatue Management and was joined by investors including Sequoia Capital, Index Ventures, and Madrona Venture Group.
- Veho, a Coulder, Colo.-based e-commerce logistics company, raised $125 million in Series A funding led by General Catalyst and was joined by investors including Construct Capital, Bling Capital, Industry Ventures, Fontinalis Partners, and Origin Ventures.
- Bizongo, a Mumbai, India-based B2B e-commerce and supply chain enablement platform, raised $110 million in Series D funding led by Tiger Global Management and was joined by investors including CDC Group, IFC Emerging Asia Fund, B Capital Group, Chiratae Ventures, Schroder Adveq, IFC, and Add Ventures.
- Figment, a blockchain infrastructure and staking and application layer solution for token holders and Web3 developers, raised $110 million in Series C funding led by Thoma Bravo and was joined by investors including Counterpoint Global, Binance Labs, Mirae Asset, ParaFi Capital, Avon Ventures, and a Fidelity Investments affiliate.
- PlainID, a Tel Aviv-based cybersecurity, authorization, and identity access management solutions developer, raised $75 million in Series C funding led by Insight Partners and was joined by investors including Itai Tsiddon and Viola Ventures.
- MetaMap, a San Francisco-based data marketplace that powers high-trust services in emerging markets, raised $70 million in Series B funding led by Tribe Capital and was joined by investors including Craft Ventures, Alameda Research, Insight Partners founder Jerry Murdock, Snapdeal founder Kunal Bahl, and Global COO of HSBC Hussain Baig.
- Taptap Send, a New York-based cross-border money transfer platform, raised $65 million in Series B funding led by Spark Capital and was joined by investors including Unbound, Canaan Partners, Slow Ventures, Breyer Capital, Wamda Capital, and Flourish Ventures.
- Chai, a Seoul-based payment solutions company, raised $45 million in Series B funding led by Nyca Partners and Softbank Ventures Asia and was joined by investors including KT Investment, Conductive Ventures, Nordstar Capital, Samsung NEXT, and B Capital.
- Ampla, a New York-based credit services company for sales and marketing firms, raised $40 million in Series A funding co-led by Forerunner Ventures and VMG Partners and was joined by Core Innovation Capital.
- Formel Skin, a Berlin-based dermatology e-health platform, raised €30 million ($34.1 million) in Series A funding led by Singular and was joined by investors including Heal Capital, Cherry Ventures, Heartcore Capital, and Vorwerk Ventures.
- DermBiont, a clinical-stage biotechnology company developing topical therapeutics to address the root causes of skin diseases, raised $28 million in a second Series A round from investors including Pivotal Life Sciences, Viking Global Investors, Olive Tree Capital, Toba Capital, and Civilization Ventures. DermBiont acquired Chromaderm, a Cambridge, Mass.-based clinical-stage biotechnology company developing a topical inhibitor of melanin production as a therapy for skin brightening, melasma, and other skin diseases, alongside the investment.
- Zing Health, a Chicago-based Medicare Advantage provider, raised $25 million in funding from Town Hall Ventures and Leavitt Equity Partners.
- Ekos, a Charlotte, N.C.-based craft beverage business management software company, raised $21 million in Series B funding led by Catalyst Investors and was joined by Noro-Moseley Partners.
- Searchlight, a San Francisco-based AI-powered recruiting platform, raised $17 million in Series A funding led by Founders Fund and was joined by investors including Accel, Shasta Ventures, Kapor Capital, and Operator Collective.
- Voyant Photonics, a Long Island City-based light detection manufacturer, raised $15.4 million in Series A funding led by UP.Partners and was joined by LDV Capital and Contour Ventures.
- Arcade, a DeFi marketplace and lending platform for financing NFTs, raised $15 million in Series A funding from Pantera Capital, Castle Island Ventures, Franklin Templeton Blockchain Fund, Golden Tree Asset Management, Eniac Ventures, Protofund, Probably Nothing Capital, Lemniscap, BlockFi CEO Zac Prince, and Quantstamp CEO Richard Ma.
- Avoma, a Palo Alto-based meeting assistant company, raised $12 million in Series A funding led by Headline and was joined by investors including Storm Ventures, Global Founder Capital, the Zoom Apps Fund, Operator Partners, Industry Ventures, K9 Ventures, Dragon Capital, and Twin Ventures.
- Lapse, a Milton Keynes, U.K.-based photo-sharing app, raised $11 million in seed funding led by Octopus Ventures and GV and was joined by investors including Speedinvest and angel investor Soleio Cuervo.
- Humanz, a Tel Aviv-based SaaS platform for influencer marketing, raised $8 million in seed funding led by Stardom Ventures and was joined by investors including More Investment House and the Schestowitz Group.
- Adventr, a New York-based video communications software platform, raised $5 million in seed funding led by Paladin Capital and was joined by investors including Reinventure Capital, Invisible Ventures, and John Legend.
- Mperativ, a San Francisco-based revenue marketing platform developer, raised $5 million in Series A funding led by GFT Ventures and was joined by investors including Heroic Ventures and Westwave Capital.
- Sarcophagus, a decentralized app that uses smart contracts to store and recover files, raised $3.67 million in on-chain funding from investors including Inflection, Infinite, and Lo Enterprises.
- LiveFlow, a Redwood City, Calif.-based income statement platform provider, raised $3.5 million in seed funding led by Moonfire Ventures and was joined by investors including Y Combinator, Seedcamp, and WndrCo.
- Zeet, a San Francisco-based DevOps platform, raised $2 million in seed funding led by Race Capital and was joined by investors including GGV Capital and Founders Inc.
- Flourish, an Austin, Tex.-based health and wellness app nutrition app for women, raised $1 million in pre-seed funding led by True Wealth Ventures and was joined by investors including Halogen VC and Monique Nolk-Yates.
- 3G Capital agreed to acquire a 75% stake of the holding company of Hunter Douglas, a Netherlands-based window covering and architectural product manufacturer, from Ralph Sonnenberg in a deal valued at $7.1 billion, including debt.
- Alpargatas S.A. agreed to acquire a 49.9% stake in Rothy's, a San Francisco-based sustainable shoe company for $475 million in primary capital and stock.
- Alta Growth Capital and Fondo de Fondos acquired Interquim, a Mexican active pharmaceutical ingredient producer. Financial terms were not disclosed.
- Bessemer Investors acquired a majority stake in Pet Flavors, a Melbourne, Fla.-based flavor developer for chewable pet pharmaceuticals. Financial terms were not disclosed.
- Blackstone agreed to acquire a majority stake in Supergoop, a San Antonio, Tex.-based sunscreen beauty product manufacturer. Financial terms were not disclosed.
- CVC Capital Partners acquired a majority stake of Unily, a Godalming, U.K.-based enterprise collaboration software company. Silversmith Capital Partners and Farview Equity Partners also invested. Financial terms were not disclosed.
- Edifecs, owned by TA Associates and Francisco Partners, acquired Health Fidelity, a San Mateo, Calif.-based risk adjustment solution provider. Financial terms were not disclosed.
- Francisco Partners acquired Office Ally, a Vancouver, Wa.-based provider of healthcare clearinghouse and software solutions. Financial terms were not disclosed.
- Garnett Station Partners recapitalized PJW Restaurant Group, a Haddonfield, N.J.-based parent company of pub and restaurant chain P.J. Whelihan’s. Financial terms were not disclosed.
- Gryphon Investors acquired Vivify Specialty Ingredients, a Glendale Heights, Ill.-based specialty chemicals for colorant and related specialty applications provider. Financial terms were not disclosed.
- Midwest Products & Engineering, a BPOC portfolio company, agreed to acquire Racine Metal-Fab, a Sturtevant, Wis.-based highly aesthetic sheet metal component manufacturer. Financial terms were not disclosed.
- Open Road Capital and Bain Capital Credit invested in three auto dealership groups: Pritchard Automotive Group, a Clear Lake, Iowa-based dealership representing several brands; a Monrovia, California-based group; and a Ridgefield, Conn.-based BMW dealership. Keeler Motor Car Company also invested in the BMW dealership.
- Producers Midstream II, backed by Tailwater Capital, agreed to acquire a 100% stake of Anadarko G&P, Midcoast Energy’s gas gathering and processing assets in the Anadarko Basin, and a 35% stake in Texas Express Gathering, Midcoast Energy’s Houston, Tex.-based natural gas pipeline operator. Financial terms were not disclosed
- Reverence Capital Partners acquired a majority stake and spun out Ministry Brands, a Lenoir City, Tenn.-based SaaS platform for churches, parachurch ministries and other faith-based organizations, from Community Brands.
- San Francisco Equity Partners acquired a majority stake in Rustic Bakery, a Petaluma, Calif.-based organic cracker and specialty foods producer. Financial erms were not disclosed.
- SK Capital Partners acquired a majority stake in SEQENS, an Ecully, France-based pharmaceutical solution and specialty ingredient company, and combined it with existing portfolio company Wavelength Pharmaceuticals. Bpifrance, Nov Santé, Mérieux Equity Partners, Ardian, and Eximium also invested as part of the deal.
- Avesi Partners acquired a stake in Danforth Advisors, a Boston-based financial services and operational support and financial planning firm, from Stone-Goff Partners. Financial terms were not disclosed.
- Marcone, a Genstar Capital portfolio company, acquired Professional Plumbing Group, a Glenn Mills, Pa.-based plumbing product distributor for repair and remodel applications, from Dunes Point Capital. Financial terms were not disclosed.
- Oracle is in talks to buy Cerner, a Kansas City, Mo.-based healthcare information technology solution, in a deal that could be worth around $30 billion, according to the Wall Street Journal.
- FactSet agreed to acquire CUSIP Global Services, a New York-based standardized security and entity identifier company, from S&P Global for $1.9 billion in cash.
- Glass House Brands agreed to acquire Plus Products, a San Mateo, Calif.-based cannabis edibles company for approximately $25.6 million in debt and equity.
- CinCor Pharma, a Boston, Mass.-based hypertension and other cardio-renal disease treatment development company, plans to raise up to $187 million in an offering of 11 million shares priced between $15 and $17 per share. The company reported a net loss of $21 million in the nine months ending in Sep. 2021 and has yet to post revenue. Sofinnova, 5AM Ventures, CinRx Pharma, and General Atlantic back the firm.
- Amylyx Pharmaceuticals, a Cambridge, Mass.-based amyotrophic lateral sclerosis therapy development company, plans to raise up to $175 million in an offering of 8.8 million shares priced between $18 and $20 per share. The company reported a net loss of $59.6 million in the nine months ending Sep. 2021 and has yet to post product sales revenue. Morningside, ALS Investment Fund, and Viking Global back the firm.
- Vigil Neuroscience, a Cambridge, Mass.-based therapeutic development company for neurodegenerative diseases, plans to raise up to $119 million in an offering of 7 million shares priced between $15 and $17 per share. The company reported a net loss and comprehensive loss of $30.3 million in the nine months ending in Sep. 2021. Vigil has yet to post revenue. Atlas Venture, Northpond Ventures, Vida Ventures, and Amgen back the firm.
- ZeroFox, a Baltimore, Md.-based cyber security SaaS company, agreed to go public via a merger with L&F Acquisition Corp., a SPAC. The company will acquire IDX, a Portland, Or.-based digital privacy protection and data breach response services company, as part of the merger. A deal values ZeroFox at approximately $1.4 billion.
- Grandview Capital Acquisition Corp., a blank check company focused on the food industry, plans to raise $300 million in a public offering. The SPAC is led by Rajiv Singh and Torrey Rossetter, who are both managing partners at Grandview Capital Partners.
- PowerUp Acquisition Corp., a blank check company focused on video gaming, gaming adjacent, and new metaverse video gaming businesses, plans to raise $225 million in a public offering. The SPAC is led by Jack Tretton, former Sony Computer Entertainment America CEO and Bruce Hack, former CEO of Vivendi Games.
- Forafric, a Moroccan flour product manufacturer, agreed to go public via a merger with Globis Acquisition Corp., a SPAC. A deal values the company at approximately $300 million.
- Crossbeam Venture Partners, a New York-based venture capital firm, raised $70 million for a second fund.
- Fifth Wall, a Marina Del Rey, Calif.-based venture capital firm, hired Angela Johnson, Jon Hong, and Ofer Harduf as partners. They were formerly with Torchlight Investors, SoftBank, and J.P. Morgan, respectively. The firm also hired Tommy Wesely from Buzzfeed to be its first Chief Marketing Officer.
- Monomoy Capital Partners, a New York-based private equity firm, promoted Jaime Forsyth to partner.
- Oak HC/FT, a Greenwich, Conn.-based venture and growth equity firm, promoted Vig Chandramouli to partner, Oivind Lorentzen to principal, Andy Smith to principal, and Chelsea Chen to senior associate.