SUMMER READING
Good morning, Term Sheet readers.
M&A OUTLOOK: PwC just released its 2018 Mid-Year M&A Review and Outlook, and it looks like we are in the middle of an unprecedented M&A cycle that’s about to get more complicated. Here are some of the takeaways from the report:
• M&A momentum continues: Mega-deals are here to stay. The number of deals north of $5 billion is on pace to double last year’s total, and to date has driven overall deal value up by more than 50%, Deals are also getting bigger, with more announced deals of at least $30 billion so far in 2018 than in all of 2017.
• Tax implications more important than ever: The new tax law has prompted executives to re-evaluate their growth strategies, including how much to commit toward M&A versus other investment options like stock buybacks or increased dividends. Sellers may reconsider assets that were previously too tax-efficient or complex to spin off or sell, while buyers in search of particular assets can more efficiently acquire a company and sell parts that don’t fit.
• Companies are crossing sector lines: Four out of ten tech company acquisitions have been by companies in other industries, with consumer and retail leading the way.
Dealmakers will continue to face some unknowns for the duration of 2018. Privacy data concerns are urging some governments to consider regulating major tech firms, which could have some unforeseen consequences. “Between a still-healthy economy and an abundance of capital, companies and PE firms largely continue to be well positioned for pursuing new investments,” the report says.
BEST BIOGRAPHIES: A few weeks ago, I asked you to send me recommendations for your favorite business biographies. There were so many great ones, so I compiled a reading list bound to keep you entertained all summer. Some of the suggestions include:
• Shoe Dog by Phil Knight (this continues to be the most popular book with Term Sheet readers)
• Personal History by Katharine Graham
• The Patriarch by David Nasaw
THE LATEST FROM FORTUNE...
• Here's How Some of America's Biggest Companies Plan to Shake Up Worker Training (by Matthew Heimer)
• How Exos Is Designing High-Tech Fitness Programs for Couch Potatoes (by Phil Wahba)
• How SpaceX's Falcon Heavy Just Muscled Its Way Into a $130 Million Military Contract (by Natasha Bach)
• Facebook's Sheryl Sandberg Just Met With State Attorneys General Behind Closed Doors
VENTURE DEALS
• Vipkid, an education technology company, raised $500 million in Series D+ funding. Coatue Management, Tencent, Sequoia Capital and Yunfeng Capital led the round.
• QuantumScape, a San Jose, Calif.-based solid-state battery technology startup, raised $100 million in funding from Volkswagen AG.
• Agari, a Foster City, California-based cybersecurity company, raised $40 million in funding. Goldman Sachs Growth Equity led the round, and was joined by investors including Norwest Venture Partners, Scale Venture Partners, Battery Ventures, Greylock Partners, First Round Capital and Alloy Ventures.
• Fantom, a blockchain platform, raised $40 million in funding. Investors include Hyperchain Capital, Signum Capital, 8Decimal, Arrington XRP Capital, Bibox Fund, Link VC, Nirvana Capital and JRR Crypto.
• Silexica, a Germany-based developer of the SLX programming tools, raised $18 million in Series B funding. EQT Ventures led the round, and was joined by investors including Merus Capital, Paua Ventures, Seed Fonds Aachen and DSA Invest.
• Cape Analytics, a Mountain View, Calif.-based provider of property data for insurers and reinsurers, raised $17 million in funding. XL Innovate led the round, and was joined by investors including The Hartford, Nephila, CSAA Insurance Group, The Cincinnati Insurance Company and State Auto Labs Fund.
• Mercator MedSystems, Inc., a medical tech company, raised $11 million in Series D funding. Shenzhen Salubris Pharmaceuticals Co. Led the round.
• Truepic, a San Diego-based digital photo authentication platform, raised $8 million in Series A funding. Investors include Dowling Capital Partners.
• Renoviso, a North Andover, Mass.-based service that helps homeowners complete renovation projects, raised $7 million in funding. Corigin Ventures led the round, and was joined by investors including Bessemer Venture Partners, NextView Partners and FJ Labs.
• Roambee, a Silicon Valley-based Internet of Things supply chain and enterprise asset visibility company, raised $2 million in funding. Investors include MDI Ventures.
• Liongard, a Houston, Texas-based provider of unifying and maintaining system documentation for MSPs, raised $1.25 million in seed funding. Investors include Station Houston Ventures, Gestalt Cybersecurity, members of the Houston Angel Network, TiE Houston and UH Cougar Venture Fund.
• SitePro, a Texas-based digital oilfield water management company, raised funding of an undisclosed amount. Cottonwood Venture Partners led the round.
PRIVATE EQUITY DEALS
• Siris Capital will buy Web.com Group Inc, a Jacksonville, Fla.-based provider of internet domain name registration services, for about $2 billion in cash.
• Anju Software Inc, which is backed by Providence Equity Partners, acquired MDCPartners, a provider of business intelligence data solutions. Financial terms weren't disclosed.
IPOs
• Electrocore, a Basking Ridge, N.J.-based vagus nerve stimulation therapy maker, raised $78 million in an IPO of 5.2 million shares priced at $15, the midpoint of its $14 to $16 range. The firm posted sales of $811,500 in 2017. Core Ventures and Merck back the firm. Cantor Fitzgerald, BTIG, Evercore ISI, and JMP Securities are underwriters in the deal. The firm plans to list on the Nasdaq as “ECOR.” Read more.
EXITS
• PayPal will buy Simility, a Palo Alto, Calif.-based fraud prevention specialist, for $120 million in cash. Simility had raised approximately $24.7 million in venture funding from venture investors including Accel, Trinity Ventures,
FIRMS + FUNDS
• Matrix Partners China, a China-based venture capital firm, raised $750 million for a fifth venture-capital fund, according to a filing with the SEC.
• World Innovation Lab, a Palo Alto, Calif.-based venture capital firm, raised $521 million for its second fund, according to an SEC filing.
• Fifth Wall Ventures, a Los Angeles, Calif.-based venture capital firm, raised $100 million for its second real estate technology fund. The fund’s target is $400 million.
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Polina Marinova produces Term Sheet, and Lucinda Shen compiles the IPO news. Send deal announcements to Polina here and IPO news to Lucinda here.
