Arqit is what you could call a venture capital success story. It had raised a meager $6.5 million in funding (in addition to various grants) before it hit the public markets via a SPAC merger last year at around a $1 billion dollar valuation. It was given $70 million in development capital as part of the SPAC deal. 

But here’s a problem: Former employees allege that Arqit’s technology isn’t as far along as its executives have let on—nor its technology as poised to scale as it asserts, according to a new Wall Street Journal investigation.

Despite projections that the company would generate $660 million in revenue in 2025 and assertions that Arqit had an “impressive backlog” of revenue and was on track for “hyperscale growth,” the company’s revenue was comprised of only a handful of government grants and small research contracts at the time of its public listing, people with knowledge of the matter told the Journal. Unless there are major changes in internet protocols, its encryption technology “might never apply beyond niche uses.” 

Some of the misgivings have bubbled up over the last year. Arqit’s Chief Revenue Officer resigned from the company last spring, about a month before the company announced its SPAC merger, after raising concerns that the CEO was “overstating contracts and giving unrealistic revenue projections to potential investors.” A handful of other employees have departed the company since over similar concerns of its business model and the status of its technology.

Arqit maintains that its software was ready when it went public and that “this was a live production software release and not a demonstration or trial. It was being used by enterprise customers on that day and subsequently for testing and integration purposes, because they need to build Arqit’s software into their products.” A company spokesperson didn’t respond to an immediate request for comment from Fortune.

The ordeal underscores a key aspect of the SPAC model that has come under fire from regulators in the last years, as companies are able to make projections about their future financials in SPAC disclosures, which is disallowed in an IPO. Arqit appears to be yet another example of a company taking advantage of it. 

Say hello… I would like to introduce you to Copper, the newest member of the Term Sheet team. I adopted her from a local animal shelter this weekend, and we have quickly become fast friends. This morning she offered some sleepy emotional support in getting this newsletter into your inboxes and would like to remind you to take breaks from looking at your screen too long.

See you tomorrow,

Jessica Mathews
Twitter: @jessicakmathews
Email: jessica.mathews@fortune.com
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Jackson Fordyce curated the deals section of today’s newsletter.

VENTURE DEALS

- BlueOcean, a San Francisco-based brand decision platform for executive leadership, raised $30 million in Series B funding led by Insight Partners and was joined by FJ Labs. 

- JULO, a Jakarta-based digital lending platform, raised $30 million in funding from Credit Saison. 

- Cal.com, a remote-based scheduling platform, raised $25 million in Series A funding led by Seven Seven Six and was joined by investors including Obvious Ventures, OSS Capital, Jack Altman, Tobi Lutke, Anthony Pompliano, and others. 

- Backbone, a San Francisco-based supply chain software company, raised $14 million in funding from investors including Nautilus Ventures, 12/12 Ventures, and angels including Wired’s John Battelle and Netsuite’s Brian Taylor. 

- Mytaverse, a Miami-based VR/AR meetings platform, raised $7.6 million in seed funding led by Blumberg Capital and was joined by investors including Baselayer Ventures, Correlation Ventures, Accelerator Ventures, and others. 

- Nowadays, a San Francisco-based plant-based meat company, raised $7 million in seed funding led by Stray Dog Capital and was joined by investors including VegInvest Trust, Tenacious Ventures, Cornucopian Capital, Good Protein Fund, Selva Ventures, Vanterra Accelerator Fund, FoodHack, Gaingels, Beyond Impact, Unpopular Ventures, and other angels. 

- Theia, a Sao-Paulo-based women's health company connecting pregnant women to maternity professionals, raised $6 million in seed funding led by 8VC and was joined by investors including Canaan and Kaszek.

- OnePlan, a London-based mapping and digital software company for sports venues and events, raised $5.3 million in funding from Pembroke VCT.

- Sika, a New York-based payments platform using FSA/HSA wallets, raised $5 million in seed funding led by Forerunner Ventures and was joined by investors including Shine Capital, Ulu Ventures, PrimeSet, Atacama, and the co-founders of Plaid.

- trac, a Los Angeles-based musician monetization platform, raised $2.5 million in pre-seed funding led by Lagos and was joined by investors including AppWorks, InfinityVC, Calm Company Fund, Dapper Labs, and other angels. 

PRIVATE EQUITY

- Smash Capital, Insight Partners, and GIC acquired a minority stake in Coda Payments, a Singapore-based payment collection company for mobile and online games, live streaming, video on demand, music streaming, and more, for $690 million. 

- Alpine Air Express, backed by AE Industrial Partners, acquired Suburban Air Freight Inc., an Omaha, Neb.-based air cargo carrier. Financial terms were not disclosed. 

- CVC Capital Partners VII acquired Neolith Group, a Castellón, Spain-based sintered stone manufacturer. Financial terms were not disclosed. 

- Fortis Solutions Group, a portfolio company of funds managed by Harvest Partners, acquired Profecta Labels, a St-Hubert, Quebec manufacturer of labels and flexible packaging printing. Financial terms were not disclosed. 

- Renovus Capital Partners acquired ProfitOptics, a Glen Allen, Va.-based IT consulting company. Financial terms were not disclosed. 

- RoadSafe Traffic Systems, backed by Investcorp and Trilantic North America, acquired North Valley Barricade, a Yuba City, Calif-based construction equipment supplier. Financial terms were not disclosed.

Speciality Networks, a portfolio company of Linden Capital Partners, acquired United Rheumatology, a Hauppauge, N.Y.-based rheumatology care management organization. Financial terms were not disclosed. 

- Versapay, backed by Great Hill Partners, acquired DadeSystems, a Miami-based automated accounts receivable software company. Financial terms were not disclosed. 

OTHER

- OpenWeb acquired ADYOULIKE, a Paris-based global advertising platform, for $100 million. 

- Lygos, a Berkeley, Calif.-based biological engineering platform developer, and Flexible Solutions International, a Taber, Alberta, Canada-based environmental technology company, agreed to merge for an all-stock transaction. 

- Mindtree, a Bangalore-based IT services and consulting company, and L&T Infotech, a Mumbai-based IT services and consulting company, are considering a merger, according to Bloomberg. Larsen & Toubro back the companies. 

- Uniphore acquired Colabo, a San Carlos, Calif.-based conversational A.I. and automation platform. Financial terms were not disclosed. 

IPOS 

- ClubCorp, a Dallas, Texas-based country club operator, is weighing an IPO, according to Bloomberg. A deal could value the company at $4.5 billion. Apollo Global Management backs the company.

- Didi Global, a Beijing-based ride-hailing company, said it plans to delist from the New York Stock Exchange before going public elsewhere.