Sourcery (6/29-7/3)
IPO-Pops; New “Unicorn Club” Members: Instacart, Anduril, Fivetran, and Discord. + New “IPO Club” Members: Lemonade, Accolade, and Dun & Bradstreet.
Last Week (6/29-7/3):
Relevant deals include the 60+ deals across stages below.
I've categorized the deals below into three categories, Care, Future of Work and Sustainability, and ordered from later-stage rounds to early-stage rounds. Highlighted deals include new “Unicorn Club” members: Instacart, Anduril, Fivetran, and Discord, as well as new “IPO Club” members: Lemonade, Accolade, and Dun & Bradstreet.
Final numbers on Lululemon Stock Price at the bottom.
. . .
IPO-Pops
On day 1 Agora (API) popped 153%, ZoomInfo (ZI) popped 62%, Lemonade (LMND) popped 139% and not so poppy, Accolade (ACCD) popped 35%.
“The second quarter is expected to see 39 IPOs raise $15 billion. After coronavirus volatility caused the slowest April and May since the Great Recession, IPO activity roared back in June, buoyed by stellar returns. During the quarter, nearly every IPO upsized or priced above the midpoint, and IPOs averaged a 38% first-day pop, and a 61% return from offer.” - Renaissance Capital
There are some issues with the surge in IPO-pops, in particular, this is just not supposed to happen if the security is priced well. As Bill Gurley puts it, “It’s really a true economic scam.” The scam and scrutiny for underwriters come as they’re pressured by anchor funds and incentivized to reap the rewards of pricing low to increase commissions the higher the security pops. In a market with accelerated and polarized demand for enduring software/tech companies, a workforce dependent on the worldwide web to survive a dramatic shift to online work and social distancing, it doesn’t take much to see that business-enabling software/tech companies will perform better than their counterparts with a public debut (hence why they’re relatively the only type of business (besides biotechs) able to go public now). The public markets were anxiously waiting, but now they’re standing there with their arms wide open, a little more welcoming to Silicon Valley multiples than they were before.
Banks may very well be taking advantage of the decreased volume in IPOs from COVID by pulling in more cash from commissions to balance out their losses. On the other hand, maybe they just don’t know how to effectively gauge investor appetite to price in a pandemic.
More on this, in-depth, from Jamin Ball of Redpoint: What it Takes to Become a Public SaaS Company: Part 2
Growing alternatives to IPOs:
Blank Check Companies or SPACs (ex. DraftKing’s (DKNG) recent $3.3B merger by Diamond Eagle) - 4 new ones recently filed below
Direct Listings (ex. Spotify’s (SPOT) 2018 DPO) - a DPO is preferred by companies that usually have cash leverage, don’t need to raise $$$, but want access to a greater liquidity event, transparent market-driven price discovery, allowance for existing shareholders to sell, + more
Want a deeper look into Lemonade? Check out Nima Wedlake from Thomvest Ventures Unpacking Lemonade’s S-1 Filing or Mario Gabriele’s S-1 Club: Is Lemonade More Than Another Softbank Growth-Machine?
Deals
Sources: TS, Pro Rata, FinSMEs, Pitchbook, StrictlyVC
Care:
- Kitu Life, the startup behind Super Coffee, raised $25 million in funding that values it at $200 million. Skyview Capital led the round. Read more.
- Evidation Health, a San Mateo, Calif.-based medical research platform, raised $45 million in Series D funding. B Capital Group led the round and was joined by investors including McKesson Ventures and Section 32 as well as existing investors Revelation Partners, Rethink Impact, and SV Health Investors.
- NexHealth, a three-year-old, San Francisco-based digital appointment platform that simplifies the appointment process for small medical and dental practices, has raised $15 million in Series A funding led by Mino Games founder-turned-angel investor Josh Buckley. Other investors include Behance founder Scott Belsky, AngelList cofounder Naval Ravikant and Superhuman founder Rahul Vohra. The company has now raised a total of $19.75 million. Forbes has more here.
- Airvet, a Los Angeles-based veterinarian startup, raised $14 million in Series A funding. Canvas Ventures led the round and was joined by investors including e.ventures, Burst Capital, Starting Line, TrueSight Ventures, Hawke Ventures ,and Bracket Capital. Read more.
- Sun Genomics, a San Diego, Calif.-based custom probiotics and gut health company, raised $8.7 million in Series A funding. Pangaea Ventures led the round and was joined by investors including Danone Manifesto Ventures, SOSV, Human Longevity, and Nascita Ventures.
- optimize.health, a Seattle, WA-based digital healthcare platform that powers provider reimbursements for the new wave of remote patient care, raised a $3.5m seed funding (read here)
. . .
Future of Work:
- TuSimple, a San Diego-based self-driving truck startup, is seeking to raise $250 million, per TechCrunch. Backers include Sina, Composite Capital, Nvidia, UPS, CDH Investments, and Lavender Capital. Read more.
- Instacart, the eight-year-old, San Francisco-based grocery-delivery company, has raised $100 million in new funding atop the $225 million it announced last month, the company tells Axios. The fresh capital brings its valuation to $13.8 billion (from $13.7 billion). T. Rowe Price provided the new funding. More here.
- Anduril, an Irvine, Calif.-based defense-tech startup, raised $200 million at a $1.9 billion valuation. Andreessen Horowitz led, and was joined by fellow return backers like Founders Fund. http://axios.link/Mh2A
- Fivetran, an Oakland, Calif.-based provider of automated data integration, raised $100 million in Series C funding. Andreessen Horowitz and General Catalyst led the round and was joined by investors including CEAS Investments and Matrix Partners. Fivetran is now valued at $1.2 billion.
- Discord, a San Francisco-based online chat app, raised $100 million in new funding led by Index Ventures at a $3.5 billion valuation. http://axios.link/S6xo
- Mynd Property Management, an Oakland, Calif.-based property management company, raised $41.5 million in Series C funding. Wells Fargo led the round and was joined by investors including Canaan Partners, Lightspeed Venture Partners, and Jackson Square Ventures.
- Codefresh, a Mountainview, Calif.-based Kubernetes DevOps tools, raised $27 million in funding. Red Dot Capital Partners led the round and was joined by investors including Shasta Ventures.
- Fauna, a San Francisco-based adaptive database platform, raised $27 million in new Series A funding. Madrona Venture Group led, and was joined by Addition, GV, CRV, and Quest Ventures. http://axios.link/3bgy
- The Mom Project, a Chicago-based online talent marketplace for women, raised $25 million in Series B funding. 7CG led, and was joined by Citi Ventures, Synchrony Financial, SVB, High Alpha, and return backers Initialized Capital, Grotech Ventures, OCA, Aspect Ventures, Wintrust Financial, Irish Angels, and Engage VC. http://axios.link/FCMz
- Area 1 Security, a Redwood City, Calif.-based email security company, raised $25 million in funding. ForgePoint Capital led the round and was joined by investors including Kleiner Perkins, Icon Ventures, and Top Tier Capital.
- Curv, a New York-based digital asset security infrastructure company, raised $23 million in Series A funding. Investors included CommerzVentures, Coinbase Ventures, Digital Currency Group, Team8, and Digital Garage Lab Fund.
- Scalefast, a Los Angeles-based digital commerce solution, raised $22 million in Series B funding. Investors include Xplorer Capital, Stereo Capital, FJLabs, as well as current investors Benhamou Global Ventures, Crédit Mutuel Equity and Adara Ventures.
- Netwerk, an Indian B2B online marketplace for manufacturing items, raised $21 million in Series C funding. Greenoaks led, and was joined by return backers Accel, Kae Capital, Lightspeed Venture Partners, and Sequoia Capital. http://axios.link/Bs3y
- Cynet, a New York-based autonomous breach protection company, raised $18 million in extended Series B funding. Deutsche Telekom’s Telekom Innovation Pool led the round and was joined by investors including BlueRed Partners, Merlin International, Norwest Venture Partners, and Ibex Investors.
- Sundae, a San Francisco-based residential real estate marketplace, raised $16.6 million in Series A funding. QED Investors led the round and was joined by investors including Founders Fund and Susa Ventures.
- DigniFi, a Seattle-based financing platform for auto repairs and services, raised $14 million in Series A. BuildGroup led the round and was joined by investors including Exor Seeds.
- Hunters, a cybersecurity startup, raised $15 million in Series A funding. Investors include M12 and U.S. Venture Partners, with participation by seed investors YL Ventures, Blumberg Capital, and Okta Ventures.
- Upsolver, a software provider, raised $13 million in Series A funding. Vertex Ventures led the round and was joined by investors including Wing Venture Capital and existing investor Jerusalem Venture Partners.
- Elementary Robotics, a Los Angeles-based hardware and software platform for machine learning in manufacturing and logistics industries, raised $12.7 million in Series A funding. Threshold Ventures led the round.
- Justo, a Mexico City-based delivery-only grocer, raised $12 million. Foundation Capital led, and was joined by Mountain Nazca, FEMSA Ventures, Quiet Capital, and 500 Startups. http://axios.link/L06j
- Prisma, an open-source database toolkit for developers, raised $12 million in Series A funding. Amplify Partners led the round and was joined by Kleiner Perkins.
- Aclamaint, a Chicago-based workflow solution for safety and risk management, raised $10 million in Series A funding. Mercury Fund led the round.
- Bluedot , a San Francisco-based location technology maker for mobile apps, raised $9.1 million in Series B funding. Autotech Ventures led the round and was joined by investors including Transurban and new investors Forefront Ventures, IAG Firemark Ventures, and Mighty Capital.
- Capital, a maker of an AI platform for startups to consider less-dilutive financing routes, raised $9 million in additional seed funding. AME Cloud Ventures led the round and was joined by investors including Future Ventures, Greycroft, Wavemaker Partners, and Partech. Read more.
- Hi Marley, a Boston-based communication platform for insurance, raised $8 million in extended Series A funding. True Ventures and Underscore VC led the round and was joined by investors including Bain Capital Ventures and Greenspring Associates.
- Zeller, a Melbourne, Australia-based alternative to business banking, raised $6.3 million in seed funding led by Square Peg.
- Shipup, a four-year-old, Paris-based company helping online retailers with the ‘post-purchase’ customer experience, has raised €6 million from Elaia and the Smart Cities Fund. Tech.eu has more here.
- Layr, an Atlanta-based business insure-tech startup, raised $5 million in seed funding. Sandbox Insurtech Ventures led, and was joined by Flyover Capital, Maschmeyer Group Ventures, and Lloyd’s of London. http://axios.link/S2Ig
- Nacelle, a Los Angeles-based ecommerce developer platform, raised $4.8 million in funding. Index Ventures and Accomplice led the investments. Read more.
- Work Shield, a Dallas-based service for reporting and investigating harassment and discrimination, raised $4 million in Series A funding. Hoak & Co. led the round.
- CoInspect, a San Francisco-based food safety startup, raised $4 million in seed funding. Active Impact Investments led the round.
- Willa, a freelancer payment platform, raised $3 million in seed funding led by EQT Ventures. http://axios.link/OtVw
- Arena, a San Francisco, Calif.-based experience and customer data platform, raised $2.3 million in extension seed funding. Redpoint eventures led the round and were joined by investors including Incubate Fund, Plug and Play, and Intango Ventures.
- FlyForm, a London-based ServiceNow partner, raised funding from Lloyds Bank in partnership with Izy Capital. Financial terms weren't disclosed.
. . .
Sustainability:
- CCSL, a London-based provider of carbon dioxide capture and separation tech, raised $22 million in Series B funding co-led by Equinor Ventures and ICOS Capital. http://axios.link/3J6z
Exits:
- Flexwise Health, a Nashville, Tenn.-based on-demand clinical staffing platform for hospitals, completed the merge with Prescience Health, a staffing optimization software company that uses data science to predict patient demand and align nurses (read here)
- Société Générale is acquiring Shine, a French neobank for young companies. Shine has raised from investors including Kima Ventures and Xange Private Equity. Financial terms weren't disclosed
- Teladoc Health (NYSE: TDOC), acquired InTouch Health, a Santa Barbara, Calif.-based telehealth company. Financial terms weren't disclosed.
- Distressed satellite constellation operator OneWeb, which had entered bankruptcy protection proceedings at the end of March, has completed a sale process, with a consortium led by the UK Government as the winner. The group also includes funding from India’s Bharti Global – part of business magnate Sunil Mittal’s Bharti Enterprises. TechCrunch has more here.
- Uber has made an offer to acquire Postmates, the delivery startup, the New York Times reports. Read more.
- Sears is considering a sale of its home improvement unit, which could fetch around $1 billion, per Reuters. http://axios.link/Q0Ds
IPOs:
- Lemonade, a digital insurer for homeowners and renters, raised $319 million in its IPO. The company priced 11 million shares at $29 (above upwardly-revised range), for an initial market cap of $1.59 billion. It will list on the NYSE (LMND), and had raised around $480 million from firms like SoftBank (27.3% pre-IPO stake), Sequoia Capital Israel (10.3%), Aleph (10.3%), General Catalyst (7.3%), XL Innovate (5.2%), and Thrive Capital. http://axios.link/81MD
- Accolade, a Seattle-based personalized health and benefits platform, raised $220 million in its IPO. The company priced 10 million shares at $22, versus initial plans to offer 8.75 million shares at $19-$21, for a fully diluted market value of $1.2 billion. It will list on the Nasdaq (ACCD), reports a $53 million net loss on $133 million in revenue for the fiscal year ending 2/28/20, and raised around $240 million in VC funding from firms like Accretive (26.9% pre-IPO stake), Andreessen Horowitz (16.2%), Carrick Capital (9.9%), and Comcast Ventures (6.9%). http://axios.link/WahG
- Dun & Bradstreet, a Short Hills, N.J.-based business analytics firm owned by CC Capital Partners and other private equity firms, raised $1.7 billion in its IPO. The company raised 78.3 million shares at $22, versus plans to sell 65.8 million shares at $19–$21. It will list on the NYSE (DNB), and used Goldman Sachs and BofA as lead underwriters. http://axios.link/WkcO
- D8 Holdings, a blank check acquisition company focused regional or global consumer brands, filed for a $250 million IPO. It’s led by Nautica founder David Chu. http://axios.link/I7lv
- GS Acquisition Holdings II, Goldman Sachs’ second blank check company, raised $700 million in an offering of 70 million units priced at $10 apiece. It plans to list on the NYSE as “GSAH.U.” Read more.
-HPX, a blank-check acquisition company targeting a Brazilian business, filed for a $200 million IPO. It’s led by current and former Kraft Heinz executives. http://axios.link/7AvB
- Jamf, a Minneapolis-based Apple device management company, filed to raise up to $100 million in an initial public offering. It posted revenue of $204 million in 2019 and a loss of $32.6 million. Vista Equity backs the firm. It has yet to choose an exchange. Read more.
- GO Acquisition, a New York-based blank check company founded by the co-founder of GLG Partners (Noam Gottesman) and the founder of Certares (Gregory O’Hara), filed to raise $500 million. It is targeting a company in the travel industry. Read more.
- Montrose Environmental Group, ae Irvine, Calif.-based provider of environmental assessment, filed to raise up to $160 million. It posted revenue of $233.9 million in 2019 and a loss of $23.6 million. Oaktree (17.2% pre-offering), CTEH Holdings (8.7%) and Yukon Environmental (8.4%) back the firm. It plans to list on the NYSE as “MEG.” Read more.
Acquisitions:
- Coty (NYSE: COTY) agreed to buy a 20% stake in KKW, Kim Kardashian West’s makeup brand, for around $200 million. http://axios.link/rS1h
- Empower Retirement to acquire startup Personal Capital
Empower Retirement will buy wealth management startup Personal Capital in a deal that could be valued as much as $1 billion. Empower said it will initially pay $825 million for the company but the compensation could grow by as much as $175 million if Personal Capital hits certain milestones. Full Story: TechCrunch (tiered subscription model) (6/29), The Wall Street Journal (tiered subscription model) (6/29)
Funds:
- Scotts Miracle-Gro launched a $50 million corporate venture arm called 1868 Ventures. http://axios.link/xJ3W
- 645 Ventures, a New York-based early-stage firm, is raising $100 million for its third fund, per an SEC filing. www.645ventures.com
-B Capital Group raised $820 million for its second growth equity fund. www.bcapgroup.com
-Reach Capital, an early-stage VC firm focused on ed-tech, is raising $150 million for its third fund, per an SEC filing. www.reachcapital.com
-Oakpi Venture Capital is raising $30 million for its sixth fund, per an SEC filing. www.okapivc.com
Final Numbers:
Data: Yahoo; Chart: Axios Visuals