Who’s Getting Rich From Slack’s Direct Listing: Term Sheet

GETTING RICH

As Slack makes its public debut today, let’s take a look at who stands to win big.

Venture capital firm Accel is known for its early Facebook bet — its $12.2 million stake became worth over $9 billion on the day of the company’s IPO.

Now, at Slack’s debut, Accel stands to make about $3.1 billion at a reference price of $26 thanks to its 23.8% stake in the workplace messaging company. Hold on, you may think. Wasn’t Accel also an investor in cybersecurity CrowdStrike, which recently had a wildly successful IPO?

Yes. Accel was the second-biggest shareholder in CrowdStrike, owning stock worth $2.8 billion. In 2013, Accel led CrowdStrike’s $30 million Series B funding round.

From CNBC:

Those are huge hauls, particularly for a firm that has traditionally raised sub-billion-dollar funds, and they account for two of the biggest venture returns of 2019, a year that’s included the debuts of Uber and Lyft. Unlike those high-profile IPOs, Slack is choosing to go public through a direct listing, meaning the company won’t raise fresh capital but is letting existing shareholders convert their shares into stock that can be traded.

Here’s who else stands to benefit from Slack’s direct listing:

— Andreessen Horowitz owns 13% (worth $1.7 billion at the reference price)
— Social Capital controls 10% ($1.3 billion)
— Slack CEO Stewart Butterfield is the biggest individual shareholder, owning an 8.4% stake ($1.1 billion)
— Co-founder and CTO Cal Henderson owns 3.3% ($431 million)

More commentary to come tomorrow.

BRAINSTORM FINANCE HIGHLIGHTS: It was a full day yesterday at Coins2Day’s Brainstorm Finance. Some highlights from the conference:

LIBRA GOVERNANCE: Everyone is talking about Libra, Facebook’s big splash in the cryptocurrency space. But venture capital firm Andreessen Horowitz made one thing clear: It will have just as much power as Facebook in overseeing the governance of the new digital currency. Kathryn Haun, managing partner at Andreessen, said a consortium of 28 founding members, called the Libra Association, will spend the next few months debating decisions around how the new digital currency will be overseen. And all of those members will have a seat at the table in determining the direction. Read more.

OPTIMISM ABOUT LIBRA: Facebook’s ambitious plan to release its own cryptocurrency dubbed Libra has been met with an avalanche of concern from regulators worldwide. But the CEO of Tala, a mobile lending company that focuses on the under- and unbanked around the world, sees a more optimistic possibility.

“The promise of it is exciting. What it could do for a company like ours is it could accelerate our ability to go horizontally very quickly,” Tala CEO Shivani Siroya said. “Right now when going into a new country, we are having to build all our own connections.” Read more.

THE FUTURE OF MOBILE PAYMENTS: Hikmet Ersek, president and CEO of The Western Union Company, said the new Libra venture has considerable work ahead having developing a full payment and money transmission system, especially when considering so-called unbanked people who may need to pay and receive actual cash, not just a transaction on a mobile phone.

“The real cost is serving the customer in the last mile,” he said, referring to accepting and delivering money in local currencies, whether electronically or in person. “You have to be in the streets of Cairo, the streets of Nairobi. It took us many, many years to build a global system that moves $300 billion every year.” Read more.

‘KILLING IT WITH MILLENNIALS:’ Charles Schwab CEO Walt Bettinger disputed the conventional wisdom that his legacy brokerage firm was at a disadvantage in serving the hoodies-and-Allbirds crowd. “The math backs it up: We’re bringing in hundreds of thousands of millennials every year,” Bettinger said. What’s more, “If you map out [the investing needs] of Gen Y and Gen X, they don’t look very different” in the products and services they seek. “The behavior of millennials is quite consistent with other generations.” Read more.

A CASHLESS SOCIETY: Bank of America CEO Brian Moynihan emphasized that the importance of, and reliance on, technology has “changed the way money works,” not only improving the customer experience but also allowing banks to cut billions of dollars of costs. In that respect, the shift to a “cashless society” is one that Bank of America is embracing. “We want a cashless society,” he said. “We have more to gain than anybody from a pure operating costs [perspective].” Read more.

VENTURE DEALS

• Postman, a San Francisco-based collaboration platform for API development, raised $50 million in Series B funding. CRV led the round, and was joined by investors including Nexus Venture Partners.

• Valimail, a San Francisco-based provider of trust-based anti-phishing technologies, raised $45 million in Series C funding. Investors include Insight Partners.

• SmartRent, a Scottsdale, Ariz.-based smart home automation platform company for multifamily property managers and renters, raised $32 million in Series B funding. Bain Capital Ventures led the round.

• Everactive, a Santa Clara, Calif.-based developer of IoT sensors, raised $30 million in funding. Future Fund led the round, and was joined by investors including Blue Bear Capital, ABB Technology Ventures, New Enterprise Associates and Osage University Partners.

• Bitwise Industries, a Fresno, Calif.-based tech ecosystem, raised $27 million in Series A funding. Kapor Capital and New Voices Fund led the round.

• DouxMatok, an Israel-based food tech company, raised $22 million in Series B funding. BlueRed Partners led the round.

• Bitrise, a London-based mobile continuous integration and delivery platform, raised $20 million Series B funding. Partech led the round, and was joined by investors including Zobito, OpenOcean, Y Combinator, and Fiedler Capital.

• Valtix, a Santa Clara, Calif.-based provider of a cloud-native network security platform, raised more than $14 million in funding. Investors include Trinity Ventures, Vertex Ventures and Wing Venture Capital.

• Vynca, a Palo Alto, Calif.-based provider of advance care planning solutions, raised $10.3 million in Series B funding. Investors include First Trust Capital Partners, OCA Ventures, Spectrum Health Ventures, Generator Ventures and the Ziegler LinkAge Longevity Fund.

• ZeaKal, a San Diego, Calif.-based plant trait technology company, raised $10 million in funding from Canopy Rivers.

• Humanising Autonomy, a London-based developer of software for self-driving vehicles, raised $5.3 million in funding. Anthemis led the round, and was joined by investors including Global Brain, Amplifier and Synapse Partners.

• Whitebox, a Baltimore-based ecommerce automation and fulfillment technology company, raised $5 million in Series A funding. Investors include TDF Ventures led the round.

• Defendify, a cybersecurity startup, raised $1.6 million in funding. Investors include Maine Technology Institute and 3dot6 Ventures.

HEALTH AND LIFE SCIENCES DEALS

• Vida Health, a San Francisco-based personalized virtual care platform for physical and behavioral health, raised $30 million in Series C funding. Investors include GuideWell Mutual Holding Corporation, Teladoc Health and Workday Ventures.

• Comet Therapeutics, a Cambridge-based company focused on rare genetic diseases and inborn errors of metabolism, raised $28.5 million in Series A funding. Canaan and Sofinnova Partners led the round.

PRIVATE EQUITY DEALS

• Thomas H. Lee Partners agreed to acquire AutoStore, a Norway-based robotics and software company. Financial terms weren't disclosed.

• Wynnchurch Capital acquired MPL, a Fairland, Ind.-based provider of cultured marble products for the hospitality and multifamily housing markets. Financial terms weren't disclosed.

• Quorum Software, a portfolio company of Thoma Bravo, acquired Archeio Technologies, a Dallas-based provider of oil and gas document classification and smart search technology. Financial terms weren't disclosed.

OTHER DEALS

• FAT Brands Inc. (NASDAQ: FAT) acquired Elevation Burger, a West Coast-based chain specializing in grass-fed, free-range options, for $10 million which was funded through a combination of sellers’ notes and cash.

IPOs

• Personalis, a Menlo Park, Calif.-based maker of a cancer genome sequencing platform for cancer research, raised $135 million in an IPO of 7.9 million shares priced between at $17. It posted revenue of $38 million in 2018 and loss of $19.9 million. Lightspeed (27.8%) Abingworth Bioventures (25%) backs the firm. Morgan Stanley, BofA Merrill Lynch, and Cowen are underwriters. It plans to list on the Nasdaq as “PSNL.” Read more.

• Atreca, a Redwood City,-Calif-based preclinical biotech for immunotherapies focused on solid tumors, raised $125 million in an IPO of 7.4 million shares priced at $17. It has yet to post a revenue, and posted a loss of $37.9 in 2018. Baker Brothers (22.8%), Bill and Melinda Gates (9%) and Wellington Management (12.5%) back the firm. Cowen, Evercore ISI and Stifel are underwriters. It plans to list on the Nasdaq as “BCEL.” Read more.

• Prevail Therapeutics, a New York-based early stage gene therapy maker focused on neurodegenerative diseases, raised $125 million in an IPO of 7.4 million shares priced at $17. It has yet to post a revenue, and posted a loss of $19.1 million in 2018. OrbiMed (48.6%) backs the firm. Morgan Stanley, BofA Merrill Lynch, and Cowen are underwriters. It plans to list on the Nasdaq as “PRVL.” Read more.

• Akero Therapeutics Inc, a Cambridge, Mass.-based biotechnology company focused on treating non-alcoholic steatohepatitis and other serious metabolic diseases, raised$135 million in an IPO of 7.9 million shares priced between $14 to $16. Apple Tree Partners (20.2% pre-offering ), Atlas Venture ( 17.4%), venBio Partners ( 17.4%), and Versant Ventures( 17.4%). And it plans to list on the Nasdaq under the symbol AKRO. J.P. Morgan, Jefferies, and, Evercore ISI are underwriters. It plans to list on the Nasdaq as “AKRO.” Read more.