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Having a bad quarter? The coronavirus is probably the reason.
Quibi, the short-form video streaming app formed by Jeffrey Katzenberg and Meg Whitman, is definitely blaming the pandemic for its anemic performance.
“I attribute everything that has gone wrong to coronavirus,” Katzenberg, a film producer whose credits include The Little Mermaid and The Lion King, told the New York Times. “Everything. But we own it.”
Despite a roster of bite-sized shows bolstered by the likes of Jennifer Lopez and Chrissy Teigen, Quibi dropped off of the list of top 50 most downloaded free iPhone apps in the U.S. A week after it went live.
Certainly, launching a product in the middle of coronavirus is no easy feat—especially not one that was designed for on-the-go consumers. But blaming it solely on the coronavirus rings hollow for an online-only business when customers desperate for entertainment are flocking to every other streaming service, such as Netflix, Amazon Prime Video, and YouTube.
KKR bets on beauty: Nail polish and makeup can become a form of therapy in recessions, and the beauty industry at large held up better than other industries during past downturns. French cosmetics giant L’Oréal famously posted higher revenues in 2008 as consumers looked for cheap ways to feel good about themselves. In the middle of the coronavirus, though, nail salons and hair stylists are closed for business, few people appear to be putting on makeup while working from home, and early signs show the industry is taking a hit.
Still, buyout giant KKR, with experience handling the likes of Unilever, is investing in troubled and debt-laden beauty giant Coty. KKR will invest an initial $750 million in the mass market-focused company via a sale of convertible preferred shares, and plans to acquire 60% of the company’s professional beauty and retail hair operations (Wella, Clairol, OPI and ghd brands) in a deal that values the carveout at $4.3 billion. Coty expects to gain cash proceeds of $3 billion from the divestment.
Remember Webvan? The rapid rise and fall of grocery delivery startup Webvan is often cited as a poster child for the headiness of the dot-com bubble. The company raised $1.2 billion fast from the likes of Sequoia, Benchmark, and SoftBank, and then went bankrupt after four years.
Now, as grocery delivery takes off amid the pandemic, Webvan founder Louis Borders is looking to Silicon Valley once again to fund his newest startup, focusing on where Webvan had failed two decades earlier. Borders tells Term Sheet that Home Delivery Services (HDS Global), founded in 2012, is looking to raise $25 million in Series A funding from “top tier” venture capital firms.
HDS, a warehouse automation startup that counts Ingram Micro and Toyota among its current investors, plans to use that capital to build out its first fulfillment center in San Francisco with an eye toward making deliveries to customers sometime next year. It plans to start with groceries and general merchandise first.
HDS is moving into a crowded market, with the likes of Amazon and Instacart all part of the pie—but Borders believes the industry is nascent, and that he can differentiate HDS enough by using proprietary software and robots to pack and move products across the warehouse (compared to Instacart, which has human shoppers), while using in-house delivery people (like Amazon Fresh does). The robotics, according to the company, “removes all human hands from the fulfillment process.”
A high tide doesn’t lift all boats though, as Borders knows well. He says about Webvan’s failures: “They moved too fast and they moved to open up 20 plus locations in one year when they should have opened two or three. Premature scaling is the number-one reason startups fail.”
Lucinda Shen
Twitter: @shenlucinda
Email: [email protected]
VENTURE DEALS
- UpKeep, a Los Angeles-based platform for maintenance and operations teams, raised $36 million in Series B funding. Insight Partners led the round and was joined by investors including Emergence Capital, Battery Ventures, Y Combinator, Mucker Capital, and Fundersclub.
- Lilt, a San Francisco-based AI-powered translation company, raised $25 million in Series B funding. Intel Capital led the round, and was joined by investors including Sequoia Capital, Redpoint Ventures, In-Q-Tel, and XSeed Capital.
- Nanit, a New York-based baby monitor and sleep tracker maker, raised $21 million in funding. Jerusalem Venture Partners, Upfront Ventures, RRE Ventures, and Rho invested.
- IRP Systems, a Tel Aviv-based electric powertrain products provider, raised $17 million in Series B funding. Fosun RZ Capital led the round and was joined by investors including JAL Ventures.
- Zeus Living, a San Francisco-based property management service for rentals, raised about $15 million in equity and debt at a valuation of about $110 million from existing investors CEAS Investments I, Initialized Capital Management, and Soros Fund Management, according to Bloomberg citing sources. Read more.
- Clyde, a New York-based startup focused on extended warranty product protection, raised $14 million in Series A funding. Spark Capital led the round and was joined by investors including Crosslink, RRE, Rea Sea Ventures, and others. Read more.
- Shiprocket, a New Delhi-based logistics aggregator,raised $13 million in Series C funding. Tribe Capital led the round, and was joined by investors including Innoven Capital and existing investor Bertelsmann India Investments. Read more.
- WakeData, a Chinese big data solutions provider,raised $10 million in Series B funding. Redpoint Ventures China and Sequoia Capital China led the round, and was joined by investors including IDG Capital. Read more.
- PlayPlay, a Paris-based video content creation tool, raised €10 million ($10.8 million) in Series A funding. Balderton Capital led the round, and was joined by investors including Point Nine and Kerala Ventures. Read more.
- Monument, a New York-based telemedicine platform focused on alcoholism, raised $7.5 million in seed funding. Lerer Hippeau, Collaborative Fund, Red Sea Ventures, NextView Ventures, Corigin Ventures, and Data Point Capital invested. Read more.
- Primer, a U.K.-based payments fintech, raised £3.8 million ($4.6 million) in seed funding. Balderton Capital led the round. Read more.
- Shoreline, a Stavanger, Norway-based renewable energy development and operations software company for wind projects, raised $4 million Series A funding. Ingenious led the round and was joined by investors including Blue Bear Capital, Alliance Ventures, and Investinor.
- LexCheck, a New York-based AI legal technology platform, raised $3 million in seed funding. Kli Capital led the round and was joined by investors including Howard Morgan (retired co-founder of First Round Capital) and Vivek Garipalli ( CEO of Clover Health).
- Construyo, a Berlin-based construction project management service, raised €2million ($2.2 million) in Seed funding from Talis Capital.
- Rogue Games, a Los Angeles-based game publishing company, raised $2 million in funding. Runa Capital led the round, and was joined by investors including Mighty Capital, Liquid 2 Ventures, and Grishin Robotics.
- Vochi, a Belarus-based “computer vision”-based video editing and effects app for mobile phones, has raised $1.5 million in seed funding. Genesis Investments led the round. Read more.
PRIVATE EQUITY
- The Carlyle Group agreed to acquire up to 74% of SeQuent Scientific Limited, an Indian animal healthcare company, for about $210 million.
- Spectrum Equity invested $144 million in DispatchTrack, a San Jose-based company dealing with last-mile logistics.
- KKR acquired 5.2% of ProSiebenSat.1 Media, a German broadcaster. Financial terms weren't disclosed. Read more.
- INVL Baltic Sea Growth Fund acquired a controlling stake in Eco Baltia, a Latvian-based waste collection company. Financial terms weren't disclosed.
- Right Networks, a portfolio company of BV Investment Partners, acquired Rootworks, a Bloombington, In.-based platform for accounting firms and small businesses. Financial terms weren't disclosed.
- ClearLight Partners invested in ICS, an Endicott, New York-based provider of IT managed services. Financial terms weren't disclosed.
- Clayton, Dubilier & Rice acquired Radio Systems Corporation, a Knoxville, Tenn.-based pet health and safety company. Financial terms weren't disclosed.
IPOS
- ZoomInfo Technologies, a Vancouver, Wash.-based platform for sales and marketing, plans to move forward with its IPO in June, per Bloomberg. The company previously filed for a $500 million in an initial public offering. It posted revenue of $293 million in 2019 and loss of $78 million. TA Associates and Carlyle back the firm. It plans to list on the Nasdaq as “ZI.” Read more.
- New Horizon Health, a Chinese maker of home test kits for colon cancer, is considering raising about $300 million via an IPO in Hong Kong. Qiming Venture Partners and Duke Management Co. Are investors. Read more.
- ADC Therapeutics SA, a Switzerland-based biotech focused on antibody therapies for cancer, plans to raise $125 million in an IPO of 7.4 million shares priced between $16 to $18 apiece. It posted revenue of $2.3 million and losses of $116.5 million in 2018. Auven Therapeutics (42.8% pre-offering) and AstraZeneca (7.1%) back the firm. It plans to list on the NYSE as “ADCT.” Read more.
- Pliant Therapeutics, a San Francisco-based Phase 2 biotech developing therapies for the treatment of fibrosis, filed for an $86 million IPO. It posted revenue of $57.1 million in 2019 and loss of $631 million in 2019. Third Rock Ventures (32.3% pre-offering), Eventide Asset Management (9.3%), and Redmile Biopharma (7.8%) back the firm.. It plans to list on the Nasdaq as “PLRX.” Read more.
- Deutsche Bahn, a German state-owned rail operator, is delaying IPO plans of its international passenger transport business Arriva, per Reuters. Read more.
OTHERS
- SSR Mining will acquire Alacer Gold, a Denver, Colo.-based mining company, in an all-stock deal valued at C$2.41 billion ($1.72 billion).
- Tencent invested in Tim Hortons China, the Chinese arm of the Canadian coffee brewer. Financial terms weren't disclosed.
- ECI Software Solutions acquired BuildTools, a Minnesota-based web-based construction management platform. Financial terms weren't disclosed.
- PNC Financial Services Group (NYSE: PNC) plans to sell its 22.4% stake in BlackRock (NYSE: BLK). PNC owns 34.8 million common and Series B preferred shares of Blackrock, representing 22.4% ownership.
- Mak Capital One invested $35 million in Agilysys (Nasdaq: AGYS), an Alpharetta, Ga.-based provider of hospitality software solutions and services. The investment comes in the form of preferred stock.
- Atlassian acquired Halp, a Boulder, Colo-based tool that integrates with Slack as a customer support solution. Financial terms weren’t disclosed.
BANKRUPTCIES AND BREAKUPS
- Chesapeake Energy, an Oklahoma City-based oil exploration company, is weighing a bankruptcy filing. Read more.
EXITS
- Melody Investment Advisors acquired 90% of Uniti Towers, a Little Rock, Ar.-based wireless tower business, from real estate investment trust Uniti Group (NASDAQ: UNIT) for $220 million in cash.
- AAC Capital sold Corilus, a Belgium-based provider of software solutions to the primary care market, to Gilde Buy Out Partners. Financial terms weren't disclosed.
F+FS
- Amulet Capital Partners raised $210.8 million for its second fund, according to an SEC filing. Read more.
