The latest in the WeWork saga involves a SPAC January 29, 2021
This is the web version of Term Sheet, a daily newsletter on the biggest deals and dealmakers. Sign up to get it delivered free to your inbox.
Of course it did.
Just about every single late-stage company in private markets at the moment has been contacted by a blank-check company looking for a deal.
Kicking off the day, office-sharing startup WeWork has reportedly engaged in talks to combine with a special-purpose acquisition company, per the Wall Street Journal, in a deal that could take the business public and value it around $10 billion. The SPAC in question is Bow Capital Management, run by the owner of the NBA’s Sacramento Kings, Vivek Ranadivé.
If a deal were to be struck, it would be a surprisingly fast return to the public markets for WeWork, whose disastrous attempt at going public in 2019 left its valuation slashed to a fraction of its original figure. WeWork’s new CEO, Sandeep Mathrani, has also said that he plans to turn a profit for the company sometime in 2021 before revisiting the idea of an IPO.
ROBINHOOD: The popular stock trading app has reportedly raised another $1 billion from existing investors on top of hundreds of millions more in credit as it faces a liquidity crunch sparked by the ongoing trading frenzy.
It’s just the latest chapter in the saga that started with irreverent Reddit investors crusading against short-selling hedge funds. The wild trading made it difficult for Robinhood to pay customers who were owned from trades and offer collateral to clearing facilities. On Thursday, the startup paused the buying of shares in companies such as GameStop, drawing widespread ire from its users and even eliciting lawsuits. “In order to protect the firm and protect our customers, we had to limit buying of these stocks,” Robinhood CEO Vlad Tenev told CNBC Thursday. The company will allow for limited trading of shares of GameStop starting Friday.
Even while the story is posed as one of large investors battling retail players, the narrative is not so cut and dry: The rally in shares of movie chain AMC may have also been a boon to tech-focused private equity firm Silver Lake and credit investor Mudrick Capital Management.
ARE MORE SOFTWARE SPINOUTS ON THE WAY AFTER QUALTRICS’ IPO?: German software maker SAP acquired survey and analytics company Qualtrics for $8 billion roughly two years ago, with the SAP CEO at the time seeking to assuage critics of the pricey deal by likening it to Facebook’s famous acquisition of photo-sharing company, Instagram.
While Qualtrics’ IPO Thursday certainly doesn’t fulfill SAP original intent, the investment has paid off, at least on paper. Shares of Qualtrics rose 51% in their debut, valuing the company at $27.3 billion. SAP plans to maintain a controlling interest in the company.
Term Sheet caught up with Qualtrics Zig Serafin and founder Ryan Smith on Thursday to ask about the thinking behind the spinoff, and Smith had an interesting prediction:
“I think this will be a trend where you will see other companies look at this and say, this is a very good new path for people to IPO,” the chairman said over Zoom. “How many companies have been acquired and then spun out like this in enterprise? Not many. There are a lot of companies within larger ones whose market and category are in hyper-growth… As we looked out almost two years into the SAP and Qualtrics relationship, the real question came to: ‘Are we going to invest heavily under the current economic structure or is there another way we can invest more?’”
SAP has struggled in recent months to appease shareholders seeking growth, with shares of the company staying level through the last year. The Qualtrics spinoff meanwhile has also attracted Silver Lake as an investor.
- SpaceX, Elon Musk’s space exploration company, is finalizing a round of funding that could value it at above $60 billion, per Business Insider. Read more.
- Lyra Health, a Burlingame, Calif.-based provider of mental health care benefits for employers, raised $187 million in Series E funding. Addition led the round and was joined by Durable Capital Partners, Fidelity Management & Research Company, and Baillie Gifford.
- OwnBackup, a Englewood Cliffs, N.J.-based cloud cybersecurity company, raised $167.5 million in Series D funding. Insight Partners, Salesforce Ventures, and Sapphire Ventures led the round and were joined by investors including Innovation Endeavors, Vertex Ventures, and Oryzn Capital.
- Scalapay, a Milan-based buy now and pay later startup, raised €40 million ($48 million) in seed funding. Fasanara Capital, Baleen Capital, and Ithaca Capital invested.
- Check, a New York-based payroll API company, raised $35 million in Series B funding. Stripe and Thrive Capital led the round. Read more.
- Encodia, a San Diego, Calif.-based biotech focused on proteomics research, raised $75 million in Series C funding. Northpond Ventures and Deerfield Management led the round and were joined by investors including GV, Alexandria Venture Investments, ARCH Venture Partners, Biomatics Capital, Decheng Capital, Tao Capital Partners, and Nan Fung Life Sciences.
- SWORD Health, a New York-based virtual physical therapy care provider, raised $25 million. Todd Cozzens of Transformation Capital led the round and was joined by investors including Khosla Ventures, Founders Fund, Green Innovations, Vesalius Biocapital, and Faber.
- Flowhaven, a Los Angeles-based software for media licensing, raised $16 million. Sapphire Sport led the round and was joined by investors including Global Founders Capital and Icebreaker.vc. Read more.
- Appdetex, a Boise, Id.-based scam detection company focused on brand protection, raised $12.2 million in Series C funding. Baird Capital led the round and was joined by investors including First Analysis, Origin Ventures, and EPIC Ventures.
- Yotta, a New York-based savings app maker, raised $13.2 million in Series A funding. Base10 Partners led the round and was joined by investors including Y Combinator, Core Innovation Capital, and Slow Ventures.
- Phospholutions, a State College, Penn.-based sustainable fertilizer startup, raised $10.3 million in Series A funding. Continental Grain Company led the round and was joined by investors including Tekfen Ventures, Maumee Ventures, Ag Ventures Alliance Cooperative, and 1855 Capital.
- Verusen, an Atlanta, Ga.-based supply chain tech company, raised $8 million in Series A funding. Forte Ventures and Flyover Capital co-led the round and were joined by investors including BMW i Ventures, Glasswing Ventures, Zetta Venture Partners, Kubera VC, and Engage.
- Gowalla, an Atlanta, Ga.-based augmented reality startup, raised $4 million in seed funding. GV and Spark Capital led the round and were joined by investors including Niantic, Upside Partnership, Otherwise Fund, Capital Factory, and Form Capital. Read more.
- Cutback Coach, a San Francisco-based company aimed at moderating alcohol consumption, raised $3.1 million in seed funding. Stephanie Palmeri of Uncork Capital led the round and was joined by investors including Nico Wittenborn of Adjacent Venture Capital.
- CybSafe, a London-based behavioural security platform, raised £5.6 million ($7.9 million) in Series A1 funding. IQ Capital led the round and was joined by investors including Hannover Digital Investments and B8 Ventures.
- RxRevu, a Denver, Colo.-based prescription pricing company, raised $7 million in Series B funding. JAZZ Venture Partners led the round.
- CHAOS, a Finnish maker of a real estate analysis platform, raised €1.5 million ($1.8 million) in funding. Nidoco led the round.
CONTENT FROM MASTERWORKS This Asset Class is Returning 13.6% Annually According to new research from Citi Private Bank, Contemporary Art has returned 13.6% a year since 1995, compared to 8.9% for the S&P 500. Over the same period, contemporary art had a lower loss rate than gold – and almost no correlation to the stock market. But unless you have $10,000,000 to buy yourself a Monet, the barriers to this asset class have been too high. Until now, that is: Masterworks lets you invest in paintings by artists like Basquiat and Banksy at a fraction of the price. Term Sheet Subscribers can skip the 13,500 person waitlist today. See important disclaimer.
- Ontario Teachers’ Pension Plan Board invested $150 million in Tanium, a Kirkland, Wash.-based cybersecurity company.
- Clearlake Capital Group acquired nThrive’s Technology Division, an Alpharetta, Ga.-based healthcare revenue cycle management software maker. Financial terms weren't disclosed.
- Copley Equity Partners invested in AeroMed Group, a Charlotte, N.C.-based supply chain solutions provider to the aerospace and defense industries. AeroMed also acquired etaGLOBAL, a Palestine, Texas-based Aerospace and defense supply chain solution. Financial terms weren't disclosed.
- L Catterton invested in Just Over The Top, a French casual outerwear brands. Financial terms weren't disclosed.
- Pollen Street Capital invested in Markerstudy Group, a U.K.-based motor insurance provider. Financial terms weren't disclosed.
- Skydeck Capital invested in Urban Elevator Service, a Chicago-based elevator company. Skydeck Capital. Financial terms weren't disclosed.
EXITS
- TPG Capital agreed to acquire a majority stake in Centrify, a Santa Clara, Calif.-based provider of access solutions. Thoma Bravo was the seller. Financial terms weren't disclosed.
- Akzo Nobel (AS: AKZA) offered to acquire Tikkurila (HEL: TIK1V), a Finnish paint maker, valuing it at around €1.4 billion ($1.7 billion).
- Workday (NASDAQ:WDAY) acquired Peakon, a Denmark-based employee feedback and insights platform, for about $700 million.
- Xerox (NYSE: XRX) acquired CareAR, an augmented reality support platform. Financial terms weren't disclosed.
- Thai Beverage, the brewery unit of Thailand’s ThaiBev, plans to go public in Singapore in an offering that could value it at $10 billion, per Bloomberg. ThaiBev is backed by Thailand’s richest man. Read more.
- Dr. Martens, the U.K.-based boot maker, raised £1.3 billion ($1.7 billion) in its London IPO. Read more.
- Ortho Clinical Diagnostics, a Raritan, N.J.-based maker of diagnostic products, raised $1.3 billion in its IPO. Carlyle backs the firm. Read more.
- Vinci Partners, the Brazil-based alternative asset manager, raised $250 million.
- Ninepoint Partners, a Canadian investment manager, raised C$230 million ($180 million) for its cryptocurrency fund. Read more.
- Southeastern Grocers, which operates the supermarket chains Winn-Dixie and Harveys, pulled its IPO that aimed to raise as much as $142 million. Lone Star Funds backs the firm.
- Roblox Corp, a San Mateo, Calif.-based game company, has postponed plans to go public due to scrutiny from the U.S. Securities and Exchange Commission over its accounting, per Reuters. Read more.
- Coinbase, a San Francisco-based cryptocurrency trading platform, says it plans to go public via direct listing.
- MoneyLion, a New York-based fintech, is in talks to go public via merger with Fusion Acquisition Corp., a SPAC, per Bloomberg. Read more.
- FREYR, a Norweigan developer of clean battery cells, will go public via merger with Alussa Energy Acquisition Corp, a SPAC. A deal values the business at $1.4 billion.
- L Catterton, the private equity firm co-founded by LVMH, has filed confidentially for a $250 million SPAC focused on Asia, per Bloomberg. Read more.
- Arch Venture Partners, a Chicago, Ill.-based venture capital firm, closed Arch Venture Fund XI, with over $1.9 billion.
- Tercera, a partnership between Trilantic North America and former GGV Partner Chris Barbin, will invest $225 million in cloud businesses.
- Bank of America, the Charlotte, N.C.-based bank, plans to invest $150 million into 40 funds focused on minority entrepreneurs. Read more.
- Hamilton Lane (NASDAQ: HLNE), a Bala Cynwyd, Penn. asset manager, acquired 361 Capital, a Denver-based boutique alternative asset management firm. Financial terms weren't disclosed.
- Foundation Capital, a Palo Alto, Calif.-based venture capital firm, promoted Joanne Chen to general partner.
- Levine Leichtman, Beverly Hills, Calif.-based firm, hired Debbie Habib as a director.
- Pine Island Capital Partners, a Fort Lauderdale, Fla.-based private equity firm, named David Wajsgras and Matthew Levine as partners.
Thanks for reading. If you liked this email, pay it forward. Share it with someone you know: Did someone share this with you? Sign up here. For previous editions, click here. To view all of Fortune's newsletters on the latest in business, go here. |
