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November 30, 2020
Hello! Welcome back from what we hope was a restful break. Like thousands of other people, we were crushed to learn about one development over the weekend, the passing of Zappos's longtime CEO Tony Hsieh. We once had the opportunity to spend time with Hsieh in Las Vegas as he worked to revitalize the city's downtown and transform it into its own self-sustaining business hub. It was a privilege to be in his company; our heartfelt sympathy goes out to his family and close friends for their loss.
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Top News
DoorDash today said it plans to sell 33 million shares in an IPO that could give the food-delivery company a valuation of as much as $32 billion. The San Francisco outfit said it expects to sell its shares at between $75 and $85 a piece; pricing at the $80 midpoint of that range would yield net proceeds of about $2.54 billion. The WSJ has more here.
Stocks slipped today but they still closed out November with hefty gains. The Dow Jones Industrial Average rose 12%, marking its best month since January 1987. The S&P 500 soared 11% for its best showing since April, and the Nasdaq Composite climbed 12%. The WSJ has more here.
The Supreme Court today indicated serious reservations about the scope of the nation’s only major cybercrime law, hinting it may narrow the law’s applicability to avoid criminalizing such acts as checking social media at work. Politico has more here.
Salesforce’s deal to buy Slack is expected to be announced tomorrow (Tuesday) after markets close, sources tell CNBC. The deal is expected to be about half cash and half stock and will price Slack at a premium.
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Worried About Cyber Monday Scams? Fakespot Says It Can Identify Fraudulent Online Reviews and Sellers
The pandemic has made it all but impossible for a retail company without an online presence to survive. Yet while companies heavily dependent on foot traffic like J.Crew and Sur la Table have filed for bankruptcy this year, companies that are expert in e-commerce have thrived, including Target and Walmart. Amazon alone now attracts roughly one quarter of all dollars spent online by U.S. shoppers.
Unfortunately, as more shopping moves online, fraud is exploding, too. The problem is such that startups working with enterprises -- flagging transactions for banks, for example -- are raising buckets of funding. Meanwhile, one New York-based startup, Fakespot, is taking a different approach. It's using AI to notify online shoppers when the products they're looking to buy are fake listings or when reviews they're reading on marketplaces like Amazon or eBay are a fiction.
We talked earlier today with Kuwait-born Saoud Khalifah about the four-year-old business, which got started in his dorm room after his own frustrating experience in trying to buy nutritional supplements from Amazon. After he'd nabbed his master's degree in software engineering, he launched the company in earnest.
Like many other startups, Fakespot was originally focused on helping enterprise customers identify counterfeit outfits and fake reviews. When the pandemic struck, the company spied an "opening crack on the internet," as Khalifah describes it, and it instead began catering to consumers who use platforms that are struggling to keep up (and which are often more focused on protecting sellers from buyers and not the other way around).
The pivot seems to be working. Fakespot just closed on $4 million in Series A funding led by Bullpen Capital, which was joined by SRI Capital, Faith Capital and 500 Startups among others in a round that brings the company's total funding to $7 million.
The company is gaining more attention from shoppers, too.
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Massive Fundings
Cars24, a five-year-old, Gurgaon, India-based platform for buying and selling pre-owned vehicles, has raised $200 million in Series E funding led by DST Global. Earlier backers Exor Seeds, Moore Strategic Ventures, and Unbound also joined the round. Business Insider has more here.
CRED, a two-year-old, Bangalore, India-based startup that is helping credit card users in the country improve their financial behavior, has raised $80 million in Series C funding, says TechCrunch. Earlier backer DST Global led the round, joined by fellow insiders, including Sequoia Capital and Ribbit Capital. TechCrunch has more here.
Empower Education Online, a software-as-a-service company focused on edtech, has raised $265 million in Series C funding led by Hillhouse Capital. Other participants in the round included Tencent, SIG, INCE Capital, and Gaocheng Capital. DealStreetAsia has more here.
HungryPanda, a 3.5-year-old, U.K.-based startup that specializes in online Asia food delivery, has raised $70 million in Series C funding led by Kinnevik. Other participants in the round include Piton Capital, Burda Principal Investments, VNV Global and earlier investors 83North and Felix Capital. HungryPanda, which currently operates in 47 cities across six countries, had raised $20 million earlier this year. TechCrunch has more here.
Big-But-Not-Crazy-Big Fundings
Elevian, a three-year-old, Boston-based regenerative medicine company, has raised $15 million in funding led by Prime Movers Lab. Other participants in the round include Bold Capital Partners, For Good Ventures, Kizoo Ventures, Lauder Partners, Longevity Fund, SavEarth Fund, and WTI. FierceBiotech has more here.
Endomag, a 13-year-old, Cambridge, England-based company whose breast cancer screening tech helps physicians carry out tumor localizations, has raised £15 million in Series D funding led by Draper Esprit, with participation from Sussex Place Ventures. More here.
Infogrid, a two-year-old, London-based startup whose sensors are used to retrofit existing buildings to make them “smart," has raised $15.5 million in Series A funding. Northzone led the round, joined by JLL Spark, Concrete VC, The Venture Collective, and Jigsaw VC, among others. TechCrunch has more here.
Kinaset, a newly launched, Boston-based startup looking to develop an inhibitor that helps asthma patients regardless of what’s causing their disease, has raised $40 million from 5AM Ventures, Atlas Venture and Gimv The company licensed the drug around which it was formed from Vectura Group, a British company that had worked on respiratory disease R&D but is now a contract development and manufacturing organization. FierceBiotech has more here.
Materialize, a 1.5-year-old, New York-based SQL streaming database startup built on top of the open-source Timely Dataflow project, has raised $32 million in Series B funding led by Kleiner Perkins, with participation from Lightspeed Venture Partners. TechCrunch has more here.
Mursion, a five-year-old, San Francisco-based VR interpersonal training company for work professionals, has raised $20 million in Series B funding from Leeds Illuminate. More here.
Smaller Fundings
Salut, a seven-month-old, San Francisco-based app-based service that allows fitness trainers to host classes virtually, has raised $1.25 million in seed funding led by Precursor Ventures. TechCrunch has more here.
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New Funds
Firstminute Capital, a 4.5-year-old, seed-stage venture firm that's headquartered in London, has closed a second fund with $111 million in capital commitments from roughly 70 limited partners. (It had closed its debut fund with $100 million.) The outfit -- cofounded by renowned entrepreneur Brent Hoberman and Spencer Crawley, who worked formerly for a management consultancy called DMC Partners -- has offices in Stockholm and Berlin and plans to open its first U.S. office in L.A. next year. TechCrunch has more here.
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Going Public
Canadian electric truck and bus maker The Lion Electric Company says it's becoming a publicly traded company via a merger with special-purpose acquisition company (SPAC) Northern Genesis Acquisition Corp. The combined company, which will be listed on the New York Stock Exchange, will have a valuation of $1.9 billion. The companies raised $200 million in private investment in public equity, or PIPE, and hold about $320 million in cash proceeds. As TechCrunch notes, the deal is "the latest example of an electric automaker opting to go public via a SPAC merger in an aim to access the level of capital needed to become a high-volume vehicle manufacturer. Arrival, Canoo, Fisker, Lordstown Motors and Nikola Corp., have all announced SPAC mergers in 2020." More here.
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Exits
Facebook said today it is buying Kustomer, a 5.5-year-old startup that specializes in customer-service platforms and chatbots. Terms weren’t disclosed, but WSJ and TC sources say the deal values New York-based Kustomer at a little more than $1 billion. The company had raised around $174 million from investors, including Coatue, Tiger Global, Battery Ventures, and Boldstart VC. More here and here.
Intuit’s $7 billion bid to acquire the fintech company Credit Karma received Department of Justice approval last week with the divestiture of Credit Karma’s tax business, which the payments company Square has agreed to acquire for $50 million in cash. The WSJ has more here.
ServiceNow, the publicly traded cloud-based IT services company, is acquiring Element AI, a buzzy four-year-old, Montreal-based startup that had raised hundreds of millions of dollars from the likes of Microsoft, Intel, Nvidia and Tencent, among others, and whose aim was to build and provision AI-based IT services for enterprises, including organizations that are not tech companies. More here.
Private equity firm Vista Equity Partners just added a new bauble to its growing portfolio of software companies by acquiring Gainsight. The 11-year-old's software helps clients with so-called customer success -- basically creating a positive customer experience so when a customer interacts with a brand, they'll be more likely to return and to recommend the brand. Deal terms weren't disclosed but TechCrunch sources peg the price at $1.1 billion. According to Crunchbase, Gainsight had raised around $156 million from investors, including Lightspeed Venture Partners, Bessemer Venture Partners, and Battery Ventures. More here.
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People
Shriram Bhashyam, a cofounder of the secondary marketplace EquityZen, has jumped to a competing company, Forge Global, where he is now its senior VP of business development. Bhashyam left EquityZen early last year and had lately been spending time with Citi Ventures as an entrepreneur in residence. More here.
Josh Buckley, a former teenage startup founder and angel investor who became the CEO of Product Hunt last month, is looking to raise up to $200 million for a second fund that would feature Buckley as the sole general partner, shows an SEC filing. Last month, the WSJ reported that Buckley was working on a second fund and said it was targeting $150 million.
Josh Elman, a former product manager at LinkedIn, Facebook, Twitter, and Robinhood, has taken a role at Apple, saying he will be focused on the company’s App Store and helping “customers discover the best apps for them.” In addition to working in product management, Elman has since 2011 been affiliated with the venture firm Greylock, where he was been a principal, a general partner, and until now, a venture partner. More here.
FCC Chair Ajit Pai has announced he will leave his position on January 20 as President-elect Joe Biden is sworn in. Pai’s tenure has been controversial and will mostly be remembered for his successful efforts to dismantle net neutrality. TechCrunch has more here.
Robert Smith and Brian Sheth, the co-founders of the powerhouse investment firm Vista Equity Partners, have officially broken up, reports Forbes. Following Smith's tax evasion case, Sheth is leaving the Vista for good and handing back his minority ownership in the firm. In exchange, he will "retain his valuable cut of Vista’s performance fee earnings, which could be worth billions of dollars a decade from now. Almost as important, he will eventually be freed from the restrictive bonds embedded in Wall Street partnership agreements, and able to make his own name as an investor in the future." Forbes says the men were once best friends. It also reports that Sheth, 45, contracted COVID-19 in October, a development that landed him in an Austin hospital for a week. “If I didn’t get the care that I got in Austin and I wasn’t lucky enough to have access to great doctors, there’s no doubt I’d be dead right now," he tells the outlet.
Martin Tripp, a former Tesla employee who locked horns with CEO Elon Musk, has agreed to pay the company $400,000 for telling reporters about production delays at the company's Gigafactory in Nevada. The payment is part of a proposed settlement of a lawsuit that Tesla filed in 2018 that accused Tripp of divulging trade secrets about the production of Tesla's Model 3. Bloomberg has the story here.
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Data
GitLab, a six-year-old site that helps developers share and manage code, is letting some employees sell a portion of their equity in an offering that values the company at over $6 billion, according to CNBC. That’s more than double GitLab’s $2.7 billion valuation from September 2019, when it raised almost $270 million in a round led by Goldman Sachs and Iconiq Capital. More here.
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Essential Reads
Nikola isn’t turning out to be the next Tesla that investors -- and General Motors -- were hoping for.
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Detours
A look at how one of Greece's last traditional phyllo masters works his magic.
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