Sourcery (2/04/2020)
Deals of the day
Sources: TS, Pro Rata, FinSMEs
Sendoso, a San Francisco-based sending platform for e-gifts and customer engagement, raised $40 million in Series B funding. Oak HC/FT led, and was joined by was joined by Felicis Ventures, Prologis, and return backers Craft Ventures, Signia Venture Partners, Storm Ventures, Struck Capital, and Stage 2 Capital. www.sendoso.com
Dixa, a Denmark-based customer engagement platform, raised $36 million in Series B funding. Notion Capital led, and was joined by return backers Project A Ventures and Seed Capital. http://axios.link/zE7t
Emerge, a Phoenix-based digital freight marketplace, raised $20 million in Series A funding. NewRoad Capital Partners led, and was joined by Greycroft and 9Yards. www.emergetms.com
Lightship, a Los Angeles-based direct-to-patient clinical research startup, raised $20 million in Series B funding. McKesson Ventures and Define Ventures co-led, and were joined by Khosla Ventures, Brook Byers, and Marc Benioff. http://axios.link/DN2M
Inato, a Paris-based platform that helps drug companies increase the pool of clinical trial patients, raised $14 million in Series A funding. Obvious Ventures and Cathay Innovation co-led, and were joined by return backers Serena and Fly Ventures. www.inato.com
AppHarvest, a Morehead, Ky.-based developer of large-scale tomato greenhouses, raised $11 million from ValueAct Capital, Equilibrium, Rise of the Rest, and Blake Griffin Enterprises. http://axios.link/7yLB
Top Hat, a Canada-based company that makes software tools for teachers in higher education, raised $55 million in Series D funding. Georgian Partners and Inovia Capital co-led the round, and were joined by investors including Union Square Ventures, Emergence Capital and Leaders Fund.
CUUP, a New York-based direct-to-consumer intimates brand, raised $11 million in Series A funding. Insight Partners led the round, and was joined by investors including Forerunner Ventures, Global Founders Capital, Lerer Hippeau Ventures, and Bullish.
Mindance, a Leipzig, Germany-based mental fitness platform for office, raised a seven-figure seed financing round (read here)
Selfapy, a Berlin, Germany-based digital therapy provider, raised €6M in funding (read here)
Convelio, a Paris, France-based digital freight forwarder focused on fine-art shipping, closed a €9m Series A funding round (read here)
Funds:
8VC is raising $640 million for its third fund, per an SEC filing. http://axios.link/c8uB
Andreessen Horowitz raised $750 million for its third bio-focused fund. http://axios.link/01YW
ArcLight Capital raised $3.4 billion for its seventh energy infrastructure fund. http://axios.link/b2qT
Industry Ventures raised $125 million for it first hybrid fund-of-funds focused on tech buyouts. http://axios.link/Czov
U.S. Venture Partners raised $340 million for its twelfth early-stage VC fund. http://axios.link/6UFh
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Sources: MorningBrew, Axios, Fortune
Economy: U.S. factories expanded last month for the first time in half a year.
Asana, a workplace productivity software company led by Facebook co-founder Dustin Moskovitz, has filed confidentially for a direct listing.
Why it's the BFD: This seeks to challenge conventional wisdom around direct listings, particularly that issuers must be large, "household" names (e.g., Spotify, Slack, Airbnb).
ROI: San Francisco-basedAsana has raised over $200 million in VC funding, most recently at a $1.5 billion post-money valuation, from firms like Benchmark, Generation Investment Management, 8VC, Founders Fund, Lead Edge Capital, and World Innovation Lab.
Bottom line: "Slack... and other messaging and chat apps have transformed how coworkers communicate with each other... The rise of cloud-based services... have transformed how people in organizations manage and ultimately collaborate on files... The third area that has been less covered is work management: as people continue to multitask on multiple projects – partly spurred by the rise in the other two collaboration categories – they need a platform that helps keep them organised and on top of all that work. This is where Asana sits." —Ingrid Lunden, TechCrunch
Razor-maker Harry's last May agreed to be acquired for $1.37 billion by Schick parent Edgewell and, for the next six months, there were few concerns at either company. But then, shortly before Christmas, everything changed.
"[Regulators] started asking different sorts of questions, and you could see where they were heading," says a source familiar with the situation.
On January 16, Harry's co-CEO Jeff Raider posted a pro-merger argument via Medium, which suggests he felt the writing was on the wall.
Yesterday the Federal Trade Commission said it will sue to block the deal, believing that it would further strengthen a duopoly between Edgewell and market leader Procter & Gamble.
The FTC argues that the direct-to-consumer business of Harry's and rival Dollar Shave Club did little to lower industry prices or spur innovation, but rather that those things happened in 2016 when Harry's entered physical retail.
Read the FTC's full administrative complaint.
Sources say that Edgewell and Harry's haven't yet decided on next steps, but expectations are that they'll fight this in court. And, if so, expect them to be emboldened by the FTC's recent failure to block a merger of hydrogen peroxide companies, with a judge ruling that the agency's argument amounted to an "oversimplification."
The FTC's new complaint mostly ignores the impact of Dollar Shave Club, which was purchased for $1 billion in 2016 by Unilever — suggesting that its business model was already viewed as appealing before either it or Harry's moved big into physical retail.
Plus, it's odd to argue duopoly when a company with such major resources as Unilever is now involved. Let alone the recent, U.S. entry of South Korea's Dorco, which also supplies razors to Dollar Shave, or the continuing presence of Bic (which is working on a connected razor product, which speaks to the innovation angle).
And don't forget about Billie, the women's-focused brand that P&G recently agreed to buy (possibly to take it off the antitrust chess board, or perhaps as a strategic replay of the mid-1980's soda wars).
The bottom line: One possibility is that the FTC is missing the boat on direct-to-consumer. Another is that this is actually its way to test the limits of omni-channel retail, maybe as a precursor to future actions against giants like Amazon. But no matter the backstory, this one will come down to the numbers — particularly pricing — and each side thinks they have the data to prove their case.
Casper could’ve potentially stayed private through 2020.
The direct-to-consumer mattress startup tried to raise up to $200 million in funding days before filing to go public, according to a new report in The Information. Company executives reportedly felt comfortable going down the IPO path after they felt the dust had settled following WeWork’s failed public offering attempt. But the fact that it didn’t raise more funding could be indicative of a larger trend in the direct-to-consumer world.
Casper took a 32% haircut on its valuation as it filed for an IPO, estimating that it would sell 8.3 million shares at a price range of $17 to $19 apiece—raising as much as $182.4 million.
My colleague Lucinda Shen wrote about why investors’ enthusiasm about direct-to-consumer businesses has waned in recent days. There are questions about their valuations, growth prospects, competition, and the fundamental strategies they pursue.
“I’m not optimistic that they are going to have a strong acceptance form public markets,” Sandy Kory, managing director at Horizon Partners, told Fortune. “Right now, markets are saying, if you are spending a lot on sales and marketing, and you have software unit economics, you might not make it.”
I’m not so sure. Private investors may be over the direct-to-consumer trend, but does the same remain true for the public investor?
Read more at Fortune.Disclosing YouTube revenue separately for the first time, Alphabet said that the Google-owned video site accounted for more than 10% of the company's $46.1 billion in revenue last quarter, and more than $15 billion for the year.
Why it matters: Everyone knew YouTube was a big business, but until now, we didn't know exactly how big, Axios' Kyle Daly writes.
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More headlines…
Sources: MorningBrew, Fitt Insider
Jeff Bezos is being sued for defamation by his girlfriend’s brother, Michael Sanchez.
Rush Limbaugh, the conservative radio host, revealed he has advanced lung cancer.
Citigroup has suspended a senior bond trader in London for allegedly stealing food from the office cafeteria.
Forever 21 agreed to sell its business to a pair of mall owners and Authentic Brands for $81 million.
Is Hoka the next billion-dollar shoe brand?
Mapping the mental health startup landscape.
Personalized nutrition to be worth $64B by 2040.
Healthy cereal upstart Three Wishes hits Wegmans.
lululemon teams up with Mirror for meditation classes.
Peloton vs. Equinox: two diverging approaches to brand strategy.
Beans, peas, and legumes: the unsung proteins of plant-based eating.