Sourcery (2/03/2020)
Deals of the day
Sources: TS, Pro Rata, FinSMEs
Doubtnut, an Indian math and science learning app, raised $15 million in Series A funding. Tencent led, and was joined by Omidyar Network India, AET, and Sequoia Capital India. http://axios.link/gkbm
H2O, a Japanese vacation rental management platform, raised $7 million in Series B funding from Samsung Ventures, Stonebridge Ventures, IMM Investment, and Shinhan Capital. http://axios.link/zHZH
OneDine, a Plano, Texas-based developer of tableside restaurant tech, raised $5 million in Series A funding at a $90 million pre-money valuation. Backers include TMW Capital and Hidden Lake Asset Management. http://axios.link/Xnm1
HeyMama, a NYC-based social and professional network of working mothers, raised $2m in seed funding (read here)
Kaigo, a NYC-based the end-to-end nutrition platform that delivers dietitian-designed meals tailored to a body's individual health needs, raised $3M in seed funding (read here)
The Bouqs Company, a Marina Del Rey, Calif.-based direct-to-consumer floral delivery company, raised $30M in growth financing (read here)
Funds:
8VC, a San Francisco, CA-based venture capital firm, is to raise $640m for its third flagship fund (read here)
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Sources: MorningBrew, Axios, Pitchbook, TS
Markets: The Dow and the S&P wiped out their gains for the year (see above) following a disastrous Friday. This week will feature more earnings reports from major companies and close with the January jobs report.
Energy: OPEC and its pals are considering having an emergency meeting to figure out a response to downer oil prices. After falling almost 16% in January over coronavirus-related concerns, they’re at a six-month low.
One Medical stock pops ahead of Casper IPO
Tech-enabled primary care company One Medical finished its first day of trading 58% above its IPO price on Friday, at $22.07 per share. The breakout performance came a day after Black Diamond Therapeutics' stock more than doubled in its trading debut.
The strong demand signals that public investors may still welcome unprofitable companies despite an industry reckoning in the second half of 2019. One Medical reported a net loss of $45.5 million in 2018, and Black Diamond does not yet earn revenue from product sales.
Sleep startup Casper, which also loses money, is planning an IPO this week. Even at the top of its target price range, Casper's IPO valuation would represent a haircut from its prior two rounds and a paper loss for recent investors like Target.
The Carlyle Group (22.9% post-IPO stake) was the biggest beneficiary of One Medical's first-day bump. The company's other backers include Benchmark (11.1%), Oak Investment Partners (9.8%) and GV (5%).WeWork’s new CEO. New year, new beverage policy, new CEO. On Saturday, WeWork said real estate exec Sandeep Mathrani will be its new chief.
The details: Mathrani will take over for Sebastian Gunningham and Artie Minson, who have been subbing in as co-CEOs since former CEO and founder Adam Neumann’s departure last fall. Mathrani will report to chairman Marcelo Claure, who recruited him through persistent LinkedIn DMs.
The backstory: After a catastrophic 2019, WeWork is getting back to first principles.
Principle 1: Real estate. Mathrani used to run Brookfield Property Partners’ retail group, one of the U.S.' largest mall owners. His presence signals WeWork will focus on bread-and-butter office leasing, as opposed to the Neumann-era positioning as a consciousness-elevating tech company...that also runs a school for some reason.
Principle 2: Profitability. WeWork has sustained huge losses driven by massive spending for years, and hasn’t come within sniffing distance of profitability. Mathrani and Claure will be responsible for nursing the company's financial health.
Looking ahead...Mathrani starts on Feb. 18.
The novel coronavirus has the potential to be as damaging to the global economy as the U.S.-China trade war, economists tell Axios, and if not contained could wreak havoc on businesses across the globe, with great uncertainty over how bad things could get.
Why it matters: The epicenter of the virus is China, which is now the world's top trading nation and largest commodity buyer, and the no. 1 trading partner for many of the world's biggest economies, including Germany and Japan, which both are already suffering from anemic growth.
Economists worry the fallout could crimp China's economy, potentially cutting its 2020 growth by tens of billions of dollars and dragging global GDP back to 2019 levels (the worst level of growth since the global financial crisis).
Europe, Asia and the Americas also will suffer.
State of play: "If this virus begins to mutate rapidly so that it becomes increasingly more difficult to find a cure for it, that would be extremely alarming," Bernard Baumohl, chief global economist at the Economic Outlook Group, tells Axios.
"And if [the World Health Organization] declares it as a pandemic, that too will have a depressing effect on the global economy because countries will put in certain limitations on commerce, on trade, and that will obviously slow down growth."
The big picture: The global manufacturing sector is already in recession in advanced countries like the U.S. and eurozone, and the coronavirus outbreak is threatening the services sector.
A swath of industries already have felt the sting, with American companies ranging from Starbucks, Levi Strauss and Disney to Apple, Google and JPMorgan shutting down operations in China or halting production and banning employee travel.
Between the lines: Fed chair Jerome Powell demurred action from the U.S. central bank at last week's January policy meeting, but his hand (and that of other central bankers) may be forced, Joseph Brusuelas, chief economist at tax and consulting firm RSM, tells Axios.
"If this continues for another week or two, we will begin debating fresh central bank action to put a floor under asset markets."
Yes, but: The fact that the outbreak originated in China may just be what helps keeps it contained, Foster Finley, global co-leader of the transportation and infrastructure practice AlixPartners, tells Axios.
“As much as we Westerners like to wag fingers at authoritarian China, this is one of those rare circumstances where the manner China could go after this may be pretty effective.”
Go deeper:What's happening with the coronavirus
The Shanghai Composite Index fell by nearly 8%, losing around $375 billion in value and touching a one-year low in the first day of trading since the Lunar New Year holiday. (Wall Street Journal)
China's central bank lowered reverse repo rates and injected a record 1.2 trillion yuan ($173.8 billion) into markets to ensure ample liquidity Monday. (Reuters)
FERTILITY FUNDING: Legacy, a sperm testing and freezing startup, has raised $3.5 million in funding from Section 32, Y Combinator and Bain Capital Ventures. Last year, I noticed an uptick in venture capital funding for male fertility startups. At the time, I noted that awareness is growing around male fertility, and startups and their deep-pocketed backers are here to capitalize on it. Investors poured $646 million into the fertility sector in 2018, according to PitchBook.
In the last decade, fertility startups have been focused on hyper-targeting female millennials even though men cause or contribute to infertility in about half of cases. Companies are just now turning their attention to male partners.
Legacy founder and CEO Khaled Kteily told TechCrunch last week: “Women are taught about their fertility but men aren’t, yet the quality of their sperm is degrading over the years. Sperm counts have gone down by 50 to 60% over the last 40 years, too.”
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More headlines…
Sources: MorningBrew
Victoria’s Secret had an “entrenched culture of misogyny, bullying, and harassment” according to a NYT investigation.
The FDA approved the first treatment for peanut allergies.
Global M&A activity in January was its slowest in seven years, the FT reports.
A British startup claims it has developed the first drug created using artificial intelligence to be tested on humans.
Relive the Super Bowl commercials.
The Federal Trade Commission filed a lawsuit to block Edgewell Personal Care's planned $1.4 billion acquisition of subscription shaving service Harry's.
Forever 21 will sell its retail business for $81 million to a group that includes Authentic Brands, Simon Property Group, and Brookfield Property Partners.
Apple has temporarily closed all its official stores and corporate offices in mainland China due to the coronavirus outbreak.
H-E-B opened a kosher-focused store in Houston.
Moda Operandi, an online luxury fashion marketplace, raised $100 million.
French Connection scrapped plans to sell the company.
The FBI tweeted "the Super Bowl is a NO DRONE ZONE" ahead of last night's game and arrested a Florida man who violated the temporary flight restrictions.
A video leaked of Samsung's alleged new foldable phone, the Galaxy Z Flip.
Apple whisperer Ming-Chi Kuo forecast that Apple's iPhone production will dip 10% this quarter due to the coronavirus outbreak.
West Virginia is expected to institute smartphone voting for disabled residents.
Tablet shipments dropped 1.5% globally year-over-year in 2019, per IDC.
Yandex (Russia's Google) is launching a free Moscow delivery service that will bring users groceries in 15 minutes, powered by bike couriers and tiny warehouses throughout the capital. Amazon, u up?