Term Sheet — Thursday, January 25

HIGH TIMES

Good morning, Term Sheet readers.

Let’s talk cannabis. Privateer Holdings, the Seattle-based private equity firm focused on cannabis industry investments, raised $100 million in Series C funding to back more cannabis startups and capitalize on an industry expected to reach nearly $22 billion in legal sales in the U.S. By 2020.

The new funding brings the firm’s fundraising total to $200 million since its inception in 2011, which makes it the largest private capital raise closed in the legal cannabis industry to date. The fresh funding values the company at around $600 million, according to media reports. Privateer’s founders are also pledging to commit the equity equivalent of $5 million at the firm’s current valuation from their own shares in the company, “to help communities harmed by cannabis prohibition.”

The company is not naming the investors in this round other than to say they are a mix of “high-net-worth individuals, family offices and institutional investors.” Existing investors include Peter Thiel’s Founders Fund. My colleague Tom Huddleston reported in 2016 that the investment from Founders Fund was one of the first instances of institutional money being invested with a company that directly handles cannabis.

Still, investors are treading carefully. When I spoke with Eric Hippeau a few months ago about Lerer Hippeau’s investments in the space, he said the firm made a decision not to invest in companies that grow or touch the product as it remains illegal on the federal level. “It’s an exciting market to invest in, but also in a very eyes-wide-open, cautious way,” he said. “We obviously want to invest in companies that operate where the market is fully legal.”

For an industry that has long been mostly ignored by large investment firms and major banks, this deal marks a huge step forward. It’s important to note this deal moved relatively slowly. Coins2Day first wrote about this Series C funding back in November 2016 when Privateer had closed $40 million. It took the company more than a year to raise the remaining amount.

That’s not so bad considering what it took for cannabis-focused companies to raise capital back in 2011. At the time, Privateer co-founder Brendan Kennedy pitched 500 investors over the course of two years just to raise $7 million in Series A funding. Seven years later, the timeline is getting significantly shorter and investors are getting increasingly open-minded. (There’s another cannabis deal in the VC section below.)

NEW SEQUOIA FUND? There are media reports that Sequoia Capital is raising up to $1 billion for its sixth India-focused fund. This would come only two years after it raised $930 million for its previous India fund. Term Sheet reached out to Sequoia for confirmation, but the firm declined to comment.

EXECUTIVE EXITS: In the last three days, Twitter’s COO, Facebook’s CMO, and Snap’s VP of product have all announced they’ll be leaving the tech behemoths. The departures come at pivotal moments for each of their respective companies. Is this just a coincidence or is it indicative of a larger trend where top social media executives begin to exit as their employers come under fire?

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...AND ELSEWHERE

Why Twitter let Noto walk away. Facebook hires a former White House official for cyber security policy. U.S. Venture capital swells and spreads. China to boost scrutiny of offshore PE funds. Why cash is overrated, according to Larry Fink. Not everyone is a winner of the Trump tax cuts.

VENTURE DEALS

• Snowflake Computing, a San Mateo, Calif.-based developer of a cloud-based data warehouse, raised $263 million in funding. Investors include ICONIQ Capital, Altimeter Capital, a nd Sequoia Capital.

• Opendoor, a San Francisco-based online home-selling service, raised $135 million in funding. Fifth Wall Ventures and Lennar led the round, and were joined by investors including Rialto Capital Management.

• EtaGen, a Menlo Park, Calif.-based manufacturer of linear generators, raised $83 million in Series C funding. Investors include American Electric Power (AEP), Centrica Innovations, Statoil Energy Ventures, and KCK Group.

• Front, a San Francisco-based shared inbox for teams, raised $66 million in Series B funding. Sequoia Capital led the round, and was joined by investors including DFJ.

• Stem, Inc., a Millbrae-based artificial intelligence-powered energy storage provider, raised $80 million in Series D funding. Activate Capital led the round.

• Showpad, a Belgium-based sales enablement platform, raised $25 million in funding. Investors include Insight Venture Partners.

• Arundo Analytics, a Houston, Texas-based software company powering advanced analytics in heavy industry, raised $25 million in Series A funding. Investors include Sundt AS, Stokke Industri, Horizon, Canica, Strømstangen, Arctic Fund Management, Stanford-StartX Fund and Northgate Partners.

• Appetize, a Los Angeles, Calif.-based point-of-sale (POS) company focused on food service and retail payment technology, raised $20 million in Series B funding. Shamrock Capital Advisors led the round, and was joined by investors including Silicon Valley Bank.

• StreetShares Inc, a Reston, Va.-based provider of small business loans and government contract financing for businesses owned by members of the military and veterans’ community, raised $20 million in funding. Investors include Rotunda Capital Partners LLC.

• Shiftboard, a Seattle-based provider of scheduling and hourly workforce management solutions, raised $11.5 million in Series A funding. NewRoad Capital Partners led the round.

• Tigera Inc, a San Francisco-based networking solutions provider, raised $10 million in funding. Madrona Venture Group led the round, and was joined by investors including New Enterprise Associates and Wing Venture Capital.

• Fleet, a Portland, Ore.-based online marketplace for international logistics, raised $10 million in Series A funding. Lufthansa Cargo led the round, and was joined by investors including investors including Hunt Technology Ventures.

• Canndescent, a Santa Barbara, Calif.-based cultivator of cannabis, raised $10 million in Series B funding. Investors include Floret Ventures and Altitude Investment Partners.

• Greenfly, a Santa Monica, Calif.-based software platform focused on brand storytelling, raised $8.5 million in Series B funding. Alpha Edison led the round, and was joined by investors including Iconica Partners, Elysian Park, and Corazon Capital.

• Hysolate, an Israel-based developer of a hybrid endpoint architecture, raised $8 million in funding. Investors include Team8 and Innovation Endeavors.

• STACK Construction Technologies, a Mason, Ohio-based provider of cloud-based takeoff and estimating software for the construction sector, raised $7 million in funding. Investors include Level Equity.

• Divvy Homes, a tech enabled real estate platform, raised $7 million in funding. Caffeinated Capital led the round, and was joined by investors including HVF and DFJ.

• Light Field Lab, a San Jose, Calif-based developer of holographic display technologies, raised $7 million in seed funding. Khosla Ventures and Sherpa Capital co-led the round, and were joined by investors including R7 Partners.

• Allure Security, a Boston-based developer of online security solutions, raised $5.3 million in funding. Glasswing Ventures led the round, and was joined by investors including Greycroft, Zetta Partners, and Portage Partners.

• Cylus, an Israel-based startup developing cybersecurity solutions for railways and metros, raised $4.7 million in seed funding. Investors include Zohar Zisapel, Magma Venture Partners, Vertex Ventures and the SBI Group.

• Strive Talent, a recruiting platform that helps companies hire candidates, raised $3.8 million in seed funding. Investors include Upfront Ventures, Kapor Capital, Webb Investment Network, NextView Ventures, University Ventures and Graph Ventures.

• Rally Rd., a New York-based marketplace for making investments in collector cars, raised $2.6 million in seed funding. Columbus Nova led the round, and was joined by investors including Social Leverage.

• Inprentus, a Champaign, Ill.-based maker of X-ray and EUV diffraction gratings for synchrotron radiation facilities, raised $2.5 million in Series A funding. Flyover Capital led the round, and was joined by investors including Serra Ventures.

• Uplevel Security, a New York City-based developer of an incident analysis and response platform, raised $2.5 million in funding. Work-Bench led the round.

• Blacklane, a Berlin-based professional drivers service, raised funding of an undisclosed amount. Investors include ALFAHIM, Daimler and btov Partners.

• Tender Armor, a fraud prevention payments technology provider, raised a “multi-million-dollar” Series A investment. Aubrey Strul and Barry Beck led the round, and were joined by investors including Strul Logistics and Technology LLC.

HEALTH AND LIFE SCIENCES DEALS

• Neuspera Medical Inc, a San Jose, Calif.-based neuromodulation company, raised $26 million in Series B funding. 6 Dimensions Capital led the round.

• Bonti, a Newport Beach, Calif.-based biotechnology company, raised $15.5 million in Series C funding. City Hill Ventures led the round.

PRIVATE EQUITY DEALS

• Frontier Capital invested in PowerDMS, an Orlando, Fla.-based document management solution company. Financial terms weren't disclosed.

• Promus Equity Partners acquired a minority stake in Event Network, a San Diego-based operator of specialty retail locations at aquariums, science centers, museums and other cultural attractions in North America. Financial terms weren't disclosed.

OTHER DEALS

• Brainly acquired Bask, a video learning platform that helps students visually learn and collaborate online. Financial terms weren't disclosed.

• Here Technologies acquired Micello, a Santa Clara, Calif.-based company that offers a database of indoor maps and provides a platform for businesses to build and use these maps and corresponding datasets across a variety of applications, according to TechCrunch. Financial terms weren't disclosed. Read more.

• HackerOne acquired Breaker 101, a provider of an online web security course. Financial terms weren't disclosed.

IPOs

• PagSeguro Digital, a San Paulo, Brazil-based payments solutions firm, raised $2.3 billion in an offering of 105.4 million shares at $21.50. PagSeguro previously said it planned to offer 92.1 million shares priced between $17.50 to $20.50 a unit. Universo Online backs the company. Goldman Sachs and Morgan Stanley are global coordinators in the deal. The company plans to list on the NYSE as “PAGS.”

• Gates Industrial, a Denver, Colo.-based manufacturer of power transmission and fluid power, plans to raise $732 million in an offering of 38.5 million shares pricedat $19. Blackstone (84.2% post-offering) backs the company. Citigroup, Morgan Stanley and UBS Investment are leading the deal. The firm plans to list on the NYSE as “GTES.”

• Menlo Therapeutics, a Redwood City, Calif.-based biotech developing therapies for pruritus associated with dermatologic conditions, raised $119 million in an offering of 7 million shares at $17 a piece, the high end of its range. Vivo Capital (18% post-offering), and Redmeditex Ventures (12.9% post-offering) back the firm. Jefferies, Piper Jaffray and Guggenheim Securities are joint bookrunning managers in the deal. The firm plans to list on the Nasdaq as “MNLO.”

EXITS

• Intermediate Capital Group acquired PSB Academy, a Singapore-based private education institution. The seller was Baring Private Equity Asia. Financial terms weren't disclosed.

• Fiverr will acquire And Co, a New York City-based startup building online tools that freelancers can use manage their client relationships. Financial terms weren't disclosed. And Co raised approximately $2.5 million in venture funding from Thrive Global and BoxGroup.

• RailPros Holdings, LLC, a portfolio company of Bow River Capital Partners, acquired Roadway Worker Training, LLC, a St. Augustine, Fla.-based provider of specialized support services to the railroad industry, from R.J. Corman Railroad Group, LLC.

FIRMS + FUNDS

• Sentinel Capital Partners, a New York-based private equity firm, raised $2.15 billion for its sixth fund.

• DN Capital, a London-based venture capital firm, raised €200 million ($248 million) for its fourth fund.

• Tiger Infrastructure Partners, a New York-based private equity firm, raised $176.5 million for its second fund, according to an SEC filing.

• Yes VC, a new, San Francisco-based pre-seed and seed-stage firm, is targeting $50 million for its debut fund, according to TechCrunch. Read more.