Term Sheet — Thursday, October 11

LAWLESS

Good morning, Term Sheet readers.

I just re-read this article about the comments Bird’s CEO Travis VanderZanden made at the Vanity Fair New Establishment Summit. “There are very few places that explicitly outlaw e-scooters,” he said. “The places where there are no laws, that’s where we go in.”

Bird, the electric scooter startup that raised more than $400 million, operated in five cities worldwide in May. Now, in the second week of October, it counts 100.

This begs the chicken (Bird?) Or the egg question of which comes first — Bird deploying its scooters or the company working to educate cities about its service? “It usually happens at the same time," VanderZanden said.

He seems to think the first-mover advantage is the key to outmaneuvering his rivals, including Lyft and Uber/Lime. “We were the first in the world to do electric scooter sharing, and we launched a little over a year ago,” VanderZanden said of his deep-pocketed competition. “We’re the furthest along from a supply chain standpoint as well as from a government relations standpoint.”

From the story:

It’s easy to operate 50 to 100 scooters in a city, he said. It’s far more challenging to scale to 100-plus cities like Bird has. “Operationally, this business turns out to be a lot different than Uber and Lyft,” VanderZanden said. “It’s way more challenging.” You have to move scooters around the city for prime placement, recharge them, and repair them.

Besides, VanderZanden doesn’t subscribe to the view that Uber and Lyft’s existing customer base of millions of people will be as much as a threat as it initially seems. Most people see a scooter on the street, then open its corresponding mobile application, rather than the other way around. The notion of one app to rule them all, “we don’t think it’s actually the way things will evolve,” the CEO said.

My question to you is this: Who do you see winning the scooter wars, and why? (Your answers — along with your first name — may be included in a Term Sheet roundup.)

A STARTUP PONZI SCHEME? Social Capital founder Chamath Palihapitiya called the growth-focused startup scene “an enormous multivariate kind of Ponzi scheme,” yesterday at the Launch Scale conference in San Francisco. Palihapitiya, who once led user growth at Facebook, slammed startups who spend money to boost user growth to attract bigger funding rounds.

“I will not be a part of the charade anymore…At some point the whole grow, grow, grow at all costs runs out of juice,” said Palihapitiya. He told entrepreneurs at the conference to look for real and sustainable growth instead.

Palihapitiya also addressed the changes going on at his own firm. A month ago, he announced that Social Capital is no longer a venture firm, it won't raise any new capital, and it will turn into a $2 billion "technology holding company" that he'll fund almost completely with his own fortune.

"There have to be these moments where you basically circle the wagons and say enough is enough, or you capitulate," he said at the conference. "I had to either capitulate or rip it all down, and I chose to rip it all down." Read more.

PEOPLE MOVES: Shares of payment processor Square took a hit after CFO Sarah Friar announced she would be stepping down from her role in December to become the next CEO of local social network Nextdoor. And it will be quite a change — While Square has more than 2,000 employees and a market value of over $30 billion, Nextdoor has just 225 full-time employees and a valuation of about $1.5 billion. Read more.

VENTURE DEALS

• Snowflake Computing, a San Mateo, Calif.-based data warehouse built for the cloud, raised $450 million in funding at a $3.5 billion valuation. Sequoia Capital led the round, and was joined by investors including Altimeter Capital, Capital One Growth Ventures, ICONIQ Capital, Madrona Venture Group, Redpoint Ventures, Sutter Hill Ventures, Wing Ventures, and Meritech Capital.

• SmileDirectClub, a Nashville, Tenn.-based developer of at-home invisible teeth alignment products, raised $380 million in funding at a $3.2 billion valuation. Clayton, Dubilier & Rice led the round, and was joined by investors including Kleiner Perkins and Spark Capital.

• Allbirds, a San Francisco-based footwear startup, raised $50 million in funding. Investors include T. Rowe Price, Fidelity and Tiger Global Management.

• Demisto, a Cupertino, Calif.-based provider of a security operations platform, raised $43 million in Series C funding. Greylock Partners led the round, and was joined by investors including Accel Partners and ClearSky Security.

• CNEX Labs Inc, a San Jose, Calif.-based developer of a transformative architecture for solid state drive controllers, raised more than $23 million in Series D funding. Dell Technologies Capital led the round.

• Once Upon a Farm, a Berkeley, Calif.-based provider of organic, cold-pressed baby food, applesauce and smoothies, raised $20 million in Series B funding. CAVU Venture Partners led the round.

• Total Expert, a Minneapolis-based fintech software pioneer powering the marketing behind billions in lender and banker revenue, raised $20 million in Series B funding. Emergence Capital led the round, and was joined by investors including Rally Ventures and Arthur Ventures.

• Cardialen Inc, a Minneapolis-based medical device company, raised $17 million in Series B funding. RiverVest Venture Partners led the round, and was joined by investors including Qiming Venture Partners, HBM Healthcare Investments and Cultivation Capital.

• Kahoot!, an Oslo, Norway-based interactive game-based learning platform, raised 126.5 million Norwegian kroner (~$15.4 million) at a valuation of 2.55 billion kroner (~$300 million). Datum AS led the round.

• GoWork, an Indonesia-based coworking space provider , raised $10 million in Series A funding. Gobi Partners and Indonesian Paradise Property led the round.

• Pipedrive Inc, a New York and Tallinn-based provider of sales pipeline software, raised $10 million in Series C funding from Deutsche Telekom Capital Partners.

• Foundry College, a San Francisco-based online school focused on teaching middle skills to working adults, raised $6 million in funding. The investor was Learn Capital.

• Paladin Cyber, a San Francisco-based provider of cyber protection services for small and medium businesses, raised $3.6 million in seed funding. Lightbank led the round, and was joined by investors including Aquiline Technology Growth, Haystack, Argo Ventures, Clocktower Technology Ventures, Ground Up Ventures, Hemi Ventures, Sutardja Ventures and Y Combinator.

• Lumenari, a Lexington, Ky.-based provider of LED phosphors for LCD displays, raised $3 million in Series A funding. Investors include TJ Rodgers, Jeremy Blank, Revolution’s Rise of the Rest Seed Fund and Hanover Partners.

• Shujinko, a Seattle-based developer of cloud solutions, raised $2.8 million in funding. Investors include Unusual Ventures, Defy, Vulcan Capital, PSL Ventures and Vas Ventures.

• Mission Secure Inc, a Charlottesville, Va.-based control system cybersecurity company, raised Series A funding of an undisclosed amount. Energy Innovation Capital and Chevron Technology Ventures led the round.

• My Ally, a San Jose, Calif.-based AI-powered candidate experience platform, raised Series A funding of an undisclosed amount. Storm Ventures led the round, and was joined by investors including Eileses Capital, Firebolt Ventures and Gokul Rajaram.

• VitaCup, Inc, a San Diego, Calif.-based maker of functionally infused coffee and tea products, raised funding of an undisclosed amount. Investors include North Castle Partners and First Beverage Ventures.

HEALTH AND LIFE SCIENCES DEALS

• RWDC Industries Pte Ltd, a Singapore-based biotech startup, raised $13 million in funding. Vickers Venture Partners and WI Harper Group led the round.

• NanoView Biosciences, a Boston-based provider of exosome detection and characterization solutions, raised $10 million in Series B funding. Northpond Ventures led the round, and was joined by investors including Sands Capital Ventures and PBM Capital Group.

• Optina Diagnostics Inc, a Montreal-based company that specializes in the early detection of Alzheimer through the use of artificial intelligence and spectral retinal imaging, raised C$4 million ($3 million) in funding. Zoic Capital led the round, and was joined by investors including Desjardins Capital, DigitalDx Ventures, Pallasite Ventures and Barney Pell.

PRIVATE EQUITY DEALS

• Northleaf Capital Partners made an investment in Lifemark Health Group, a Toronto-based provider of physiotherapy, independent medical assessments and homecare services in Canada. Lifemark is a portfolio company of Audax Private Equity.

• FFL Partners made an investment in Accordion, a New York-based private equity-focused financial consulting and technology firm. Financial terms weren't disclosed.

• Thoma Bravo will buy Imperva Inc, a Redwood Shores, Calif.-based cybersecurity company, in an all-cash deal valued at $2.1 billion. Imperva stockholders will receive $55.75 per share in cash.

• Marlin Equity Partners acquired Total Defense, a New York-based provider of subscription-based endpoint security software, including virus and malware protection. Financial terms weren't disclosed.

• Abry Partners made an investment in Lighthouse Autism Center, a provider of center-based, Applied Behavioral Analysis therapy. Financial terms weren't disclosed.

OTHER DEALS

• Apple Inc. Agreed to buy a portion of Dialog Semiconductor’s (XTRA:DLG) business in a $600 million deal. Apple will pay Dialog $300 million in cash and prepay $300 million for Dialog products to be delivered over the next three years. Read more.

IPOs

• Livent, Philadelphia, Penn.-based lithium batteries maker for electric cars spun out of FMC, raised $340 million in an IPO of 20 million shares priced at $17, below its $18 to $20 range. The segment posted revenue of $347.4 million and income of $42.2 million in 2017. BofA Merrill Lynch, Goldman Sachs and Credit Suisse are underwriters. FMC backs the firm. It plans to list on the NYSE as “LTMH.” Read more.

• Anaplan, a San Francisco, Calif.-based cloud-based enterprise software maker, plans to raise $248 million in an offering 15.5 million shares priced between $15 to $17, above its previous $13 to $15 range. Shasta Ventures, Premji Invest, and Granite Ventures back the firm. The firm posted revenue of $168.3 million and loss of 47.6 million. Goldman Sachs, Morgan Stanley and Barclays are underwriters. It plans to list on the NYSE as “PLAN.” Read more.

• Allogene Therapeutics, a South San Francisco-based maker of cancer therapies, raised $288 million in an offering of 16 million shares priced at $18 apiece, the high end of its $16 to $18 range. Goldman Sachs, J.P. Morgan, Cowen, and Jefferies are underwriters. It plans to list on the Nasdaq as “ALLO.”

• Allseeds, the Ukrainian multi seed oil extraction plants, plans to list overseas in the next four years, Reuters reports. FMO and Diligent Capital Partners backs the firm. Read more.

• Stadler, the Swiss trainmaker, has reportedly hired UBS and Credit Suisse to lead its IPO. Read more.

EXITS

• The Riverside Company sold BeneSys, a Troy, Mich.-based provider of third-party administration services for employee healthcare and pension benefit programs for Taft-Hartley multiemployer plans. Financial terms weren't disclosed.

• Geritrex, a portfolio company of BelHealth Investment Partners LLC, acquired a portfolio of OTC topical products from PL Developments. Financial terms weren't disclosed.

• Therachon acquired GLyPharma Therapeutic Inc, a Montreal-based developer of drugs for short bowel syndrome and other rare gastrointestinal diseases. Financial terms weren't disclosed. GLyPharma Therapeutic had raised approximately CA$12 million ($9.2 million) in venture funding from investors including CTI Life Sciences Fund.

• Palladium Equity Partners acquired Kymera International, a Piedmont, N.C.-based specialty materials company, from Platinum Equity. Financial terms weren't disclosed.

• Kainos Capital agreed to sell SlimFast, a Palm Beach, Fla.-based producer of nutritional products, to Glanbia plc in a deal valued at $350 million.

FIRMS + FUNDS

• Edison Partners, a Princeton, N.J.-based growth investment firm, raised $365 million for its growth equity fund, Edison Partners IX.

• RiverVest Venture Partners, a St. Louis, Mo.-based private equity and venture capital firm, raised more than $167 million for its fourth fund, according to an SEC filing.