Term Sheet — Tuesday, February 13

BIOTECH BOOM

Good morning, Term Sheet readers.

Bill and Melinda Gates published their annual letter today in the form of a Q&A consisting of the 10 toughest questions they get asked. One of the questions is: Why do you work with corporations? Bill said the following:

We think poor people should benefit from the same kind of innovation in health and agriculture that has improved life in the richest parts of the world. Much of that innovation comes out of the private sector. But companies have to make a return on their investments, which means they have little incentive to work on problems that mainly affect the world’s poorest people. We’re trying to change that—to encourage companies to focus a bit of their expertise on the problems of the poor without asking them to lose money along the way.

The best examples so far are in global health. Some diseases of the poor require new vaccines and drugs, which as Melinda says is an area where biotech companies excel. So, for instance, we’re funding two early-stage companies that are working on ways to use messenger RNA to teach your body how to produce its own vaccines. It could lead to breakthroughs in HIV and malaria—as well as flu and even cancer.

The Bill & Melinda Gates Foundation, which is the largest philanthropy in the world, has poured money in various biotech & biopharma startups to help fuel innovation in the space. One of those mRNA investments Bill is referring to is likely Moderna Therapeutics, a Cambridge, Mass.-based biotechnology firm developing drugs that work on a genetic messaging system. In other words, the company is working on being able to instruct the body's cells to create proteins and antibodies to fight off various types of diseases. It’s an audacious goal that has attracted nearly $2 billion in venture funding (it just announced an additional $500 million), making Moderna one of the country’s most valuable startups at a valuation of approximately $7 billion.

This is indicative of a larger trend in biopharma & biotech that is ripping through the industry. There were 31 U.S. VC-backed biopharma IPOs in 2017, with median proceeds of $81 million, according to Silicon Valley Bank. Additionally, healthcare-focused venture capitalists raised $9.1 billion last year. That’s plenty of dry powder they’re sitting on. I’m curious to see whether this trend will continue in 2018, but as Bill Gates said, companies need to be incentivized to focus “on the problems of the poor without asking them to lose money along the way.” Easier said than done.

IN OTHER NEWS…

….Steve Cohen’s Point72 Asset Management has been accused of discriminating against women and promoting a culture of sexism. A female executive filed a lawsuit saying the firm "was a testosterone-fueled 'boys' club' in which men commented on women's bodies, belittled their abilities and paid them less than their male peers." Point72 said it “emphatically denies these allegations and will defend itself in a more appropriate venue than the media.”

...Here’s one fun/scary thing: Boston Dynamics, a robotics design company, released a jaw-dropping video yesterday. Yet again, it featured a robot doing things that robots aren’t supposed to be able to do. A robo-dog opens a door for its robo-dog friend, leaving us humans confused and a little terrified. Like someone said on Twitter, “Boston Dynamics is going to be the end of us all, and the last remaining humans will be wondering how we didn't see it coming.”

THE LATEST FROM FORTUNE...

• Bitcoin Investors Aren't Paying Their Cryptocurrency Taxes (by Jen Wieczner)

• Trump Wants to Cut Food Stamps —And Replace Them With Blue Apron-Like Meal Kits (by Natasha Bach)

• Amazon Is Laying Off Hundreds of Employees at Its Seattle Headquarters (by Phil Wahba)

• President Trump Wants $686 Billion for the Military. Here's How He Plans to Spend It

...AND ELSEWHERE

Inside the two years that shook Facebook. Russia threatens to block YouTube and Instagram. 5G is making its debut at the Olympics. Five key numbers from President Donald Trump’s 2019 budget.

VENTURE DEALS

• Instacart, a San Francisco-based provider of online grocery delivery services, raised $200 million in funding. Coatue Management led the round, and was joined by investors including Glade Brook Capital Partners. Instacart was last valued at $3.4 billion.

• XebiaLabs, a Boston-based provider of enterprise DevOps and continuous delivery software, raised $100 million in Series B funding. Investors include Susquehanna Growth Equity and Accel.

• YapStone, a Walnut Creek, Calif.-based provider of online and mobile payment solutions, raised $71 million in Series C funding. Premji Invest led the round, and was joined by investors including MasterCard, Accel, and Meritech Capital Partners.

• Stash, a New York City-based investing app, raised $37.5 million in Series D funding. Union Square Ventures led the round, and was joined by investors including Breyer Capital, Coatue Management, Entree Capital, Goodwater Capital and Valar Ventures.

• Tipalti, a San Mateo, Calif.-based global payables automation solution, raised $30 million in Series C funding. Zeev Ventures led the round.

• UJET Inc., a San Francisco-based real-time customer communications platform, raised a $25 million in Series B funding. GV led the round, and was joined by investors including Citi Ventures, Kleiner Perkins and DCM Ventures.

• Outdoorsy, a San Francisco-based peer-to-peer online marketplace that connects travelers with a network of RV owners. Raised $25 million in Series B funding. Aviva Ventures and Altos Ventures led the round, and were joined by investors including Tandem Capital and Autotech Ventures.

• Onsite Dental LLC, an Arlington, Va.-based provider of workplace-based dental services, raised $20 million in funding. The investor was Norwest Venture Partners.

• Frank And Oak, a Canada-based retailer of clothing and accessories for men and women, raised $16 million in funding. Caisse de dépôt et placement du Québec led the round, and was joined by investors including Goodwater Capital and Investissement Québec.

• Homesnap, a Rockville, Md.-based real estate technology company, raised $14 million in Series B funding. Updata Partners led the round, and was joined by investors including Moderne Ventures.

• Adikteev, a Paris-based mobile marketing platform, raised $12 million in Series B funding. Ring Capital and BNP Developpement led the round, and were joined by investors including ISAI, Ventech and Laurent Asscher.

• Phyn, a Los Angeles-based company focused on water solutions, raised $10 million in funding from Uponor.

• NepFin, a San Francisco-based financial services company, raised a $10 million in Series A funding. Sands Capital Ventures led the round.

• Infocyte, a San Antonio, Texas-based cyber security company, raised $5.2 million in Series B funding. Toba Capital led the round, and was joined by investors including LiveOak Venture Partners and Feik Enterprises.

• FreeWire Technologies Inc., a San Leandro, Calif.-based manufacturer of mobile rapid charging systems for electric vehicles, raised $5 million in funding from BP Ventures.

• Volantio, an Atlanta-based provider of post-booking revenue and capacity optimization software for airlines, raised $2.6 million in funding. Investors include Ingleside Investors, International Airlines Group, JetBlue Technology Ventures and Qantas Ventures.

• Postr, a New Zealand-based ad tech company, raised $2.5 million in funding. Koh Boon Hwee led the round, and was joined by investors including MDI Ventures, NZVIF, and K1W1.

• GemmaCert, an Israel-based provider of cannabis analysis technology, raised $2.25 million in funding. NEO Ventures, Stony Hill, and Arba Finance led the round, and were joined by investors including Aggrinovation.

• Backpacker Panda, an India-based backpacking hospitality platform, raised $1.4 million in Series A funding. 37.37 North Capital led the round.

• Hatch Apps, a Washington D.C.-based automated app creation platform, raised $1.3 million in funding. The investors were not disclosed.

• SecFi, a provider of loans for option exercise and holders of private company stock, raised $1 million in seed funding. Social Leverage, FJLabs, and CoVenture led the round.

• nOCD, a Chicago-based mental health app, raised $1 million in funding. The investor was 7wire Ventures.

• Stoop, a New York City-based flexible living platform and Mdrn., an end-to-end residential platform for sales and leasing, raised more than $1 million in funding. The investors were not named.

HEALTH AND LIFE SCIENCES DEALS

• Procyrion, Inc., a Houston, Texas-based clinical-stage medical device company, raised $16 million in Series C funding. Fannin Partners led the round.

PRIVATE EQUITY DEALS

• Blackford Capital made an investment in Online Tech Stores, a Reno, Nevada-based distributor of compatible imaging supplies and accessories. Financial terms weren't disclosed.

• Knowland, a portfolio company of Serent Capital, acquired Competitive Marketing Exchange, a Chicago-based provider of event space marketing intelligence for hotels. Financial terms weren't disclosed.

• Bregal Partners made an investment in Ju-Ju-Be International, a San Clemente, Calif.-based lifestyle brand in the juvenile products industry and provider of diaper bags, backpacks, and accessories. Financial terms weren't disclosed.

OTHER DEALS

• Walgreens Boots Alliance Inc. Made a takeover approach to drug distributor AmerisourceBergen Corp. (NYSE:ABC). Read more at Coins2Day.

• Crystal Rock Holdings, Inc. (AMEX:CRVP) agreed to be acquired by Cott Corporation for $0.97 per share in cash. The transaction values Crystal Rock at approximately $35 million.

IPOs

• BioXcel Therapeutics, a Branford, Conn.-based firm seeking AI solutions to neurological disorders, filed for an IPO to raise up to $69 million. Barclays, UBS Investments, and BMO are underwriters in the deal. The firm plans to list on the Nasdaq as “BTAI.”

• Haya, a Spanish property firm, has hired advisors for an IPO in Spain, Reuters reports citing sources. The deal could value the firm at up to $1.35 billion. Cerberus backs the company. Read more.

EXITS

• Bowmark Capital will acquire ASK4 Limited, a U.K.-based internet solutions provider. The seller was Darwin Private Equity. Financial terms weren't disclosed.

• Bridgepoint acquired Safety Technology Holdings, a Plymouth, Mich.-based manufacturer of critical safety related test and measurement systems, from Golden Gate Capital. Financial terms weren't disclosed.

• OpenGate agreed to acquire Jøtul Group, a Norway-based maker of residential stoves and fireplaces, from Ratos AB. Financial terms weren't disclosed.

FIRMS + FUNDS

• Orion Energy Partners, L.P., a New York-based private equity firm, raised $816 million for its second fund, Orion Energy Credit Opportunities Fund II.

• 1315 Capital, a Philadelphia-based private equity and venture capital firm, raised more than $300 million for its second healthcare growth equity fund.

• Homebrew, a San Francisco-based venture capital firm, raised $90 million for its third fund, according to TechCrunch. Read more.

• Omnivore Partners, an India-based venture capital firm, raised $46 million for its second fund. The firm is targeting a total of $75 million.