Term Sheet — Friday, December 7

TIK-TOK

Good morning, Term Sheet readers.

ByteDance, a China-based media and content giant that operates an ecosystem of apps, is in talks to raise more than $1 billion for its first venture fund to invest in artificial intelligence and media content, according to The Information.

Never heard of ByteDance? With a valuation of $75 billion (!), it’s the world’s most valuable startup. (I know, hard to believe the world’s most valuable tech startup is a media company 😬) It largely owes its success to Toutiao, a wildly popular news aggregation app in China.

In a time when U.S.-based media companies are imploding, ByteDance is strategically expanding to include mobile video and other apps and extend its influence beyond Toutiao. TikTok, known as Douyin in China, is a platform that allows users to create and share 15-second videos and is designed for the “new generation of creators.” This one has gone far beyond China and become a hit in America.

In November, TikTok was the most popular free download in the App Store in the U.S., above Facebook, YouTube, and Amazon. If you have kids in middle or high school, they are likely part of its more than 500 million global monthly active users.

Now, its parent company will raise $1.45 billion to pour large amounts of capital into companies like the ones it operates — ones that have AI baked into their models. Why is this interesting? Because ByteDance’s astonishing rise could shed light on what the future of media looks like.

All of ByteDance’s products use AI and machine learning in some way to deliver hyper-personalized content that users want. The company uses computer vision and natural language processing to understand and analyze written content, images and videos. Based on your clicks and swipes and taps, the algorithms learn your reading habits and bring you content that it knows you’ll like.

As a human who curates a newsletter, I have personally never been able to wrap my head around the notion that machines can curate content better than humans for two reasons. One being that there are things people need to know versus things they want to know and the second that hyper-personalized feeds keep us in echo chambers of homogenous thought.

Yet I think ByteDance’s model is likely the future of media. Will the next generation go out of their way to go to the New York Times, Wall Street Journal, and Coins2Day homepages for a list of nicely curated articles? No. As more investment dollars flow into companies like Toutiao and TikTok, I genuinely believe traditional media as we know it will look a lot different in a decade or two.

VENTURE DEALS

• HomeToGo, a Germany-based vacation rental search engine, raised more than $150 million in funding. Investors include Insight Venture Partners, Acton Capital Partners, DN Capital, Global Founders Capital, Lakestar and Princeville Global. In addition to the fundraise, HomeToGo acquired its U.S. Rival Tripping.com for an undisclosed amount.

• Weave, a Lehi, Utah-based customer experience management platform, raised $37.5 million in Series C funding. Lead Edge Capital led the round, and was joined by investors including Bessemer Venture Partners, Catalyst Investors, Crosslink Capital and Pelion Venture Partners.

• EdCast, a Mountain View, Calif.-based operating system for the knowledge economy, raised $33.6 million in funding. Investors include Softbank, REV Venture Partners, The London Fund, Crescent Enterprises, Mistletoe, SSGA, Stanford University and Cervin Ventures.

• LeanIX, a Germany-based provider of Software-as-a-Service solutions in enterprise architecture management, raised $30 million in Series C funding. Insight Venture Partners led the round.

• Sansan, a Tokyo and Singapore-based provider of cloud-based business contact management services, raised $26.43 million in Series E funding. Investors include Japan Post Capital, T. Rowe Price, SBI Investment and DCM Ventures.

• NuORDER, a B2B wholesale eCommerce platform, raised $15 million in Series C funding. NewSpring led the round, and was joined by investors including Upfront Ventures and Argentum.

• Aquant, a New York-based AI-powered service intelligence platform for manufacturing and service companies, raised $10 million in Series A funding. Lightspeed led the round, and was joined by investors including World Trade Ventures, Angular Ventures and SilverTech Ventures.

• Trustology, a London-based digital key safeguarding platform, raised $8 million in seed funding. Two Sigma Ventures led the round, and was joined by investors including ConsenSys.

• Akumina, a Nashua, N.H.-based modern intranet platform powering personalized digital employee experiences, raised $7.5 million in Series A funding. Investors include Richard Berthy, RJB Investments, Accenture Ventures, and Stage 1 Ventures.

• Wise Systems, a Cambridge, Mass.-based developer of autonomous dispatch and routing software for delivery fleets, raised $7 million in Series A funding. Gradient Ventures led the round, and was joined by investors including E14 Fund, Neoteny, Trucks Venture Capital and Fontinalis Partners.

• SourceDay, an Austin, Texas-based provider of automating direct spend procurement, purchase order management and supplier collaboration solutions, raised $6.5 million in Series A funding. Investors include Silverton Partners, Draper Associates and ATX Seed Ventures.

• OnSiteIQ, a New York-based visual documentation and risk assessment platform provider for construction projects, raised $2 million in seed funding. Anthemis Group led the round, and was joined by investors including MetaProp.

HEALTH AND LIFE SCIENCES DEALS

• Impel NeuroPharma, a Seattle-based developer of therapies that treat central nervous system disorders with unmet medical needs, raised $67.5 million in Series D funding. KKR and Norwest Venture Partners led the round, and were joined by investors including Vivo Capital, 5AM Ventures and venBio Partners.

• XyloCor Therapeutics, a Newtown Square, Penn.-based private clinical-stage biopharmaceutical company focused on the development of gene therapy for unmet needs in cardiovascular disease, raised $17 million in Series A funding. Sofinnova Ventures and LSP (Life Sciences Partners) co-led the round.

PRIVATE EQUITY DEALS

• Sun Capital Partners Inc acquired Tier One Relocation, a Weirton, W.V.-based provider of household moving services for the military. Financial terms weren't disclosed.

OTHER DEALS

• Dash Financial Technologies agreed to acquire eRoom Securities, a Chicago-based provider of multi-asset trading technology, agency execution, risk management, reporting and clearing services. Financial terms weren't disclosed.

IPOs

• Moderna, a Cambridge, Mass.-based biotech startup creating medicines based on messenger RNA, plans to raise $604 million in an IPO of 26.3 million shares priced at $23, an upsized offering at the midpoint of its $22 to $24 range. It posted revenue of $205.8 million and loss of $269.8 million in 2017. Flagship Pioneering and AstraZeneca back the firm. Morgan Stanley, Goldman Sachs, and J.P. Morgan are underwriters. It plans to list on the Nasdaq as “MRNA.” Read more.

• Synthorx, a La Jolla, Calif.-based developer of immunotherapies for solid tumors, plans to raise $100 million in an offering of 9.1 million shares priced between $10 to $12. Avalon Ventures (32% pre-offering), RA Capital Management (28.2%), and OrbiMed (21.5%) back the firm. Jefferies, Leerink Partners, and Evercore ISI are underwriters. It plans to list on the Nasdaq as “THOR.” Read more.

• MOGU, a Hangzhou, China-based online fashion platform, raised $67 million in an IPO of 4.8 million ADSs priced at $14, the low end of its $14 to $16 range. It posted revenue of $69.4 million and loss of $181.5 million in the year ending March 2018. Tencent (18% pre-offering) and Hillhouse Capital Management (10.2%) back the firm. Morgan Stanley, Credit Suisse, and China Renaissance are underwriters. Plans to list on the NYSE as “MOGU.” Read more.

• 360 Finance, a Shanghai-based online consumer lending platform, plans to raise $54 million in an IPO of 3.1 million shares (20% insider) priced between $16.50 to $18.50. It posted revenue of $46.7 million and loss of $25.1 million in 2017. Qihoo Technology backs the firm. Goldman Sachs and Citi are underwriters. It plans to list on the NYSE as “QFIN.” Read more.

EXITS

• Sagewind Capital acquired The Athene Group, a software and services company serving the wealth management industry. Investors Insight Venture Partners and Salesforce Ventures also participated. Financial terms weren't disclosed.

• Clearlake Capital Group acquired symplr, a Houston, Texas-based provider of a software-as-service platform for the healthcare industry, from Pamlico Capital and CapStreet Group. Financial terms weren't disclosed.

FIRMS + FUNDS

• Building Ventures, an early-stage investment firm, raised $53 million for its debut fund.

PEOPLE

• Lightspeed Venture Partners hired five new partners: Jana Messerschmidt, Ashley Brasier, Merci Victoria Grace, Jerry Ye and Jay Madheswaran.

• Kirthiga Reddy joined SoftBank Investment Advisers, which oversees the $100 billion Vision Fund. Previously, she was at Facebook.