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November 25, 2020
Happy Thanksgiving, fellow Americans and also those of you in Australia and Brazil and wherever else you might be celebrating this week. We very much hope it's a happy, healthy time for you and your families and friends.
Note that we are pulling the plug on the newsletter until Monday so we can be slothful (we hope) for a few days (needed). More then.:)
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Top News
According to the WSJ, Salesforce is in advanced talks to buy the popular workplace chat company Slack in a deal would likely value Slack at more than $17 billion and become Salesforce’s largest acquisition ever. The report sent shares of Slack up sharply, while Salesforce saw its shares fall. More here.
German media giant Bertelsmann said today that its Penguin Random House division is buying rival Simon & Schuster in a $2.17 billion megadeal poised to reshape the U.S. publishing industry. The Associated Press has more here.
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Enterprise Investor Jason Green on SPAC Hopefuls Versus Startups Bound for a Traditional IPO
Jason Green has a pretty solid reputation as venture capitalists go. The enterprise-focused firm he co-founded 17 years ago, Emergence Capital, has backed Saleforce, Box and Zoom, among many other companies, and even while every firm is now investing in software-as-a-service startups, his remains a go-to for many top founders selling business products and services.
To learn more about the trends impacting Green's slice of the investing universe, we talked with him late last week about everything from special purpose acquisition companies (SPACs) to valuations to how the firm differentiates itself from the many rivals with which it's now competing. Below are some outtakes edited lightly for length. You can listen to the full interview here.
What do you make of the assessment that SPACs are for companies that aren't generating enough revenue to go public the traditional route?
Well, yeah, it'll be really interesting. This has been quite a year for SPACs, right? I can't remember the number, but it's been something like $50 billion of capital raised this year in SPACs, and all of those have to put that money to work within the next 12 to 18 months or they give it back. So there's this incredible pent-up demand to find opportunities for those SPACs to convert into companies. And the companies that are at the top of the charts, the ones that are the high-growth and profitable companies, will probably do a traditional IPO, I would imagine.
[SPAC candidates are] going to be companies that are growing fast enough to be attractive as a potential public company but not top of the charts. I think [sponsors are] going to target companies that are probably either growing slightly slower than the top-quartile public companies but slightly profitable, or companies that are growing faster but still burning a lot of cash and might actually scare all the traditional IPO investors.
Are you having conversations with CEOs about whether or not they should pursue this avenue?
We just started having those conversations now. There are several companies in the portfolio that will probably be public companies in the next year or two, so it's definitely an alternative to consider. I would say there's nothing impending I see in the portfolio. With most entrepreneurs, there's a little bit of this dream of going public the traditional way, where SPACs tend to be a little bit less exciting from that perspective.
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Massive Fundings
Somalogic, a 20-year-old, Boulder, Co.-based proteomics firm, just raised $121 million in Series A funding led by life science investment firm Casdin Capital, which was joined by a long list of other participants. Among them was: Farallon Capital Management, Foresite Capital, funds and accounts advised by T. Rowe Price Associates, Blue Water Life Science Advisors, Madryn Asset Management, Fiscus Ventures, Reimagined Ventures, Monashee Investment Management, Mossrock Capital, and Soleus Capital. More here.
Unacademy, a nearly six-year-old, Bangalore, India-based online learning platform that focuses on K-12 online education, has raised fresh capital from Tiger Global Management and Dragoneer Investment Group. Unacademy isn't disclosing the size of the round -- a TechCrunch source pegs it at between $75 million and $100 million -- but it says the investment values the company at $2 billion. That's up 25% from earlier this year, when it closed a separate round. Facebook and SoftBank are also investors in the company. TechCrunch has more here.
Big-But-Not-Crazy-Big Fundings
Logz.io, a six-year-old, Tel Aviv, Israel-based cloud DevOps platform, has raised $23 million in funding from investors led by Pitango Growth. Calcalist has more here.
Morse Micro, a four-year-old, Sydney, Australia-based company that makes an ultra-low-power, long-range and secure Wi-Fi chip specifically designed for IoT environments, has raised $13 million in extended Series A funding that brings the round total to $30 million. Investors include Blackbird Ventures, Main Sequence Ventures, Clean Energy Innovation Fund, Skip Capital, and Analog Devices cofounder Ray Stata. Electronics Weekly has more here.
WithMe Health, a 2.5-year-old, San Mateo, Ca.-based company that provides personalized guidance and evaluations of medications, has raised $20 million in Series B funding. OMERS Ventures led the round, joined by Section 32, Shulman Ventures, MTS Ventures and Oak HC/FT. MedCity News has more here.
Smaller Fundings
F3, a 2.5-year-old, Latvia-base anonymous Q&A app targeting Gen Z teens, has raised $3.9 million in seed funding from investors, including Russian dating site Mamba and its investor Mail.ru Group, a venture firm called Adfirst, and former Musical.ly president Alex Hofmann. TechCrunch has more here.
Glue, an 11-month-old, Israel-based platform for small business loyalty programs, has raised $8 million in Series A funding from private investors led by consulting company called Unicorn Technologies. VentureBeat has more here.
Productfy, a two-year-old, Santa Clara, Ca.-based platform that enables non-bank companies to develop and launch their own fintech applications, has raised $2.35 million in seed funding led by Point72 Ventures, with participation from Envestnet Yodlee Incubator. Crunchbase News has more here.
Vanti Analytics, a 1.5-year-old, Israel-based analytics platform that aims to reveal errors in to electronics manufacturers to they can increase their productivity at less cost, has raised $4.5 million in seed funding round co-led by True Ventures and Israel's More VC. Crunchbase News has more here.
WeGift, a six-year-old, U.K.-based digital rewards platform that helps businesses give gift cards to customers, has raised $8 million in extended Series A funding. AlbionVC led the round, joined by Stride.vc, SAP.iO fund and Unilever Ventures. TechCrunch has more here.
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New Funds
Sinai Capital Partners, a two-year-old, L.A.-based multi-stage venture firm whose founders worked previously at Insight Partners and Eagle Advisors (a family office for one of the founders of SAP), has raised $500 million for a tech-focused venture fund and a separate $100 million for a media-focused venture fund. More here and here.
Griffin Gaming Partners, a nearly two-year-old, Santa Monica, Ca.-based venture capital fund, has raised $235 million to invest in game companies and related technologies around the world. VentureBeat has more here.
SR One, a trans-Atlantic biotech venture capital firm has closed its first independent fund, after having recently spun out of GlaxoSmithKline (GSK). GSK is the largest investor in the $500 million fund; other investors in the outfit, which has offices in San Francisco and London, include endowments, foundations, pension funds and family offices, it says. More here.
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IPOs
908 Devices, an eight-year-old, Boston-based startup that makes a suite of mass spectrometry devices for scientific research, has registered plans with the SEC to raise up to $75 million in an IPO. Among the company's biggest outside shareholders is Arch Venture Partners and Razor's Edge Ventures. Renaissance Capital has more here.
Compass, the SoftBank-backed company that’s among the largest real estate brokerages in the U.S., has selected underwriters for a potential IPO, according to Bloomberg. It says the nearly nine-year-old, New York-based outfit is working with Goldman Sachs and Morgan Stanley ahead of a listing that’s slated for next year. According to Crunchbase, Compass has raised $1.6 billion from private investors altogether. More here.
The parent company of Mytheresa Group, a luxury online retailer specializing in women’s clothing, says it has filed confidentially for a U.S. IPO. The German e-commerce company hasn’t determined a size and price range for the share sale, it says, but the company is working with advisers and planning to go public in early 2021, says The Business of Fashion, adding that the company plans to seek a valuation of between $1 billion and $1.5 billion. More here.
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Essential Reads
In a newly filed lawsuit, Xerox PARC has accused Facebook, Twitter, and Snap of patent infringement, including through tools the companies use for advertising, notifications, and flagging fake COVID-19 news.
“It is surprising to me and to a lot of people,” says an artificial intelligence researcher at the Santa Fe Institute of the newest tech out of the prominent lab OpenAI. “It is hard to figure out exactly what this thing is doing.”
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Detours
A 19-year veteran of the Butterball Turkey Talk Line on how callers changed this year.
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Retail Therapy
I Survived Another Meeting mug.
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Sponsored By. . .
Shareworks by Morgan Stanley. Curious about the state of secondary markets or why some companies are choosing to avoid the traditional IPO? Then join us for our inaugural, two-part Virtual Liquidity series December 3 and December 10 and hear from industry thought leaders as they explore the evolution of secondary markets and the different paths to public markets. Visit the Shareworks by Morgan Stanley website to learn more. Shareworks by Morgan Stanley services are provided by Morgan Stanley Smith Barney LLC, member SIPC, and its affiliates, all wholly owned subsidiaries of Morgan Stanley. CRC 3315395 11/2020
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