Did Salesforce just jumpstart a productivity dealmaking bonanza?

Why couldn’t Slack go it alone?

The maker of collaboration software went public just over a year ago and should have boomed amid the pandemic. But on Tuesday, Slack agreed to combine with cloud-based software maker Salesforce in a deal valued at about $27.7 billion, ending its short run as a standalone public company.

Here’s one part of the answer: The company has struggled with competition especially from Microsoft, even during the pandemic. Earlier this year, Slack filed a complaint with the European Commission accusing Microsoft of illegally quashing younger competition by bundling Slack competitor Microsoft Teams into the “market-dominant” Microsoft Office suite that includes Outlook and Excel. (And as one Term Sheet reader cheekily noted in a recent email, giants like Alphabet have increasingly emphasized their work-from-home tools, with “some jokes circling about how the Google Meets option appears bigger every time you see it.”)

In theory, by joining Salesforce, Slack too can also reach a broader audience. As Slack CEO Stewart Butterfield wrote in letter to employees, “Their scale will propel us forward.”

But if rollups of collaboration tools are the path forward in the space—then who will be the next acquiree? Here’s my colleague, Robert Hackett, on the topic:

“Analysts expect Salesforce’s move to spur competitors—from Microsoft and Google to Oracle and SAP—to make big moves of their own in the so-called cloud collaboration industry. Earlier this month Adobebought work management firm Workfront for $1.5 billion.

There are plenty of other potential acquisition targets. Some include Asana, Box, and Dropbox.”

It’s a trend Index Ventures Partner Sarah Cannon alluded to me back in May. Workplace collaboration an incredibly competitive space, and while the rare companies will be able to go it alone—as Zoom has managed—others may  do better as features rather than full-out companies. Here’s the relevant excerpt of our chat:

“I think there will be a consolidation of a few tools. I was like, I think it is going to be Zoom, and Slack, and Notion, and I think it may be Airtable. Talk about the Balkanization of  productivity tools—you could spend days interviewing the founders of productivity companies, and they all sound the same. So at the end of this, there are going to be a few that we choose to use. 

I think we’ll see more consolidation and we’ll see market leaders being revealed.”

THE NASDAQ CALLS FOR MORE BOARD DIVERSITY: The tech and biotech-heavy stock exchange proposed new rules Tuesday that could potentially delist companies that lack at least one director that is female and another that identifies either as an underrepresented minority or as a member of the LGBTQ community. It would be no small overhaul: About 75% of companies listed through the exchange fail to meet the criteria, per the New York Times. Granted, the rule still needs to be approved by the Securities and Exchange Commission, and, after said approval, companies have as much as five years to fulfill those rules. Companies that fear that they cannot meet those requirements can avoid delisting by explaining publically why they were unable to fulfill those goals.

The rule would also require all companies listed on exchange to publicly disclose what it calls “consistent, transparent” diversity statistics regarding their board of directors.

Lucinda Shen
Twitter: @shenlucinda
Email: [email protected]

VENTURE DEALS

- ShipMonk, a Fort Lauderdale, Fla.-based shipping solution for e-commerce businesses, raised $290 million. Summit Partners led the round.

- Olive, a U.S.-based provider of A.I. To healthcare providers, raised $225.5 million. Tiger Global led the round and was joined by investors including General Catalyst, Drive Capital, and Silicon Valley Bank as well as GV, Sequoia Capital Global Equities, Dragoneer Investment Group and Transformation Capital Partners . It values the firm at $1.5 billion. 

- Voi, a Stockholm-based scooter company, raised $160 million in funding. The Raine Group led the round and was joined by investors including VNV Global, Balderton, Creandum, Project A, Inbox, and Stena Sessan.

- Function of Beauty, a maker of customizable hair, skin, and body care products, raised $150 million from L Catterton. CircleUp and GGV also reinvested.

- Bizzabo, a New York-based event software company, raised $138 million in Series E funding. Insight Partners led the round and was joined by investors including Viola Growth, Next47, and OurCrowd. 

- Flock Freight, a Solana Beach, Calif.-based logistics provider with shared truckload shipping services, raised $113.5 million. Softbank Vision Fund 2 led the round and was joined by investors including SignalFire, GLP Capital Partners, Google Ventures, and Volvo Group Venture Capital. 

- Tallac Therapeutics, a Burlingame, Calif.-based biopharmaceutical company focused on cancer, raised $62 million in Series A funding. Investors included venBio Partners, Morningside Venture, Lightstone Ventures, Matrix Partners China, and MRL Ventures Fund.  

- Genesis Therapeutics, a Burlingame, Calif.-based company with medicines for patients with severe medical needs, raised $52 million in Series A funding. Rock Springs Capital led the round and was joined by investors including T. Rowe Price Associates, Andreessen Horowitz, Menlo Ventures, and Radical Ventures.

- Step, a San Francisco-based financial services company for teens and families, raised $50 million in Series B funding. Coatue led the round and was joined by investors including Stripe, Crosslink Capital, Collaborative Fund, and Will Smith’s Dreamers VC. Other investors include Charli D’Amelio, Justin Timberlake, The Chainsmokers, Eli Manning, Kelvin Beachum, Larry Fitzgerald, and Andre Iguodala.

- Ridecell, a San Francisco-based fleet management software maker, raised $45 million in Series C funding. Fort Ross Ventures led the round and was joined by investors including Solasta Ventures. Existing investors Activate Capital, DENSO, LG Technology Ventures, and Initialized Capital.

- ConnexPay, an Atlanta-based payment technology company, raised $61 million in extended Series A funding. F-Prime Capital led the round. 

- MEL Science, a London-based science education platform, raised $14 million in Series B funding. Investors include Mubadala Investment Company and Channel 4 Ventures.

- Caja Robotics, an Israel-based warehouse robotics company, raised $12 million in Series B funding. New Era Capital led the round and was joined by investors including Philip Spruch, Gigi Levy Weis, IAngels, and CRA fund.

- LambdaTest, a London-based cloud testing company, raised $6 million in funding. Sequoia Capital India’s Surge led the round and was joined by investors including Blume Ventures, Entrée Capital and Leo Capital.

- Loop Team, a Menlo Park, Calif.-based virtual office for distributed teams, raised $4.8 million in seed funding from ENIAC, Crosslink, Golden, Redpoint, and Precursor.

- CoreStack, a Seattle-based cloud governance and compliance SaaS startup, raised $4 million from Iron Pillar.

- Novakid, an English tutoring startup, raised $4.3 million in Series A funding. PortfoLion led the round and was joined by investors including LearnStart. Read more.

- Heru, a Mexico City-based worker service platform, raised $1.7 million USD pre-seed funding. Mountain Nazca led the round and was joined by investors including Flourish Ventures, YCombinator, Magma Partners, and Xtraordinary Venture Partners.

PRIVATE EQUITY

- An investor group led by Nat Turner, D1 Capital Partners, and Cohen Private Ventures agreed to acquire Collectors Universe  (Nasdaq: CLCT), a Santa Ana, Calif.-based provider of grading for collectibles, for about $75.25 per share in cash, valuing the business at around $700 million.

- TCG invested $30 million in SurflineWavetrak, a Huntington Beach, Calif.-based surf forecasting company. 

- Silversmith Capital Partners invested $30 million in Market Access Transformation, a Millburn, New Jersey-based healthcare company.

- AdaptHealth (NASDAQ: AHCO), a portfolio company of One Equity Partners, agreed to acquire AeroCare Holdings, an Orlando, Fla.-based provider of respiratory and home medical equipment. Financial terms weren't disclosed.

- Crest Rock Partners made a majority investment in Lumin8 Transportation Technologies, an Arvada, Co.-based provider of traffic and intelligent transportation systems. Financial terms weren't disclosed.

- H.I.G. Growth Partners invested in Pinnacle GI Partners, a Michigan-based affiliated management services organization for The Center for Digestive Health.

- KnowFully Learning Group, backed by NexPhase Capital, acquired The Income Tax School, a Glenn Allen, Va.-based provider of training programs, continuing education courses and certificate programs in tax preparation. Financial terms weren't disclosed.

- Spectrum Plastics Group, backed by AEA Investors, acquired Peelmaster, a Niles, Ill.-based converter of sterile flexible packaging to the medical device market. Financial terms weren't disclosed.

- Vector Capital agreed to acquire Mood Media, an Austin-based marketing company. Financial terms weren't disclosed.

EXITS

- DuvaSawko, backed by Varsity Healthcare Partners, will merge with abeo Management Corporation, a Dallas-based provider of outsourced practice management services to anesthesia practices backed by Parthenon Capital Partners. Financial terms weren't disclosed.

- Jacobs Engineering agreed to acquire a 65% stake in PA Consulting, a management consultancy. Carlyle will exit.

OTHER

- Bayer  sold the majority of its stake in Elanco Animal Health, an animal healthcare provider,  for $1.6 billion. Financial terms weren't disclosed.

- Bestow agreed to acquire Centurion Life Insurance Company, an Iowa-based insurer, from Wells Fargo. Financial terms weren't disclosed.

IPO

- JD Health International, the healthcare subsidiary of Chinese e-commerce company JD.com, raised HK$27 billion ($3.5 billion). Read more.

- Hydrofarm Holdings Group, a Petaluma, Calif.-based provider of hydroponics and yard equipment,  plans to raise $130 million in an offering of 8.7 million shares priced between $14 to $16.  Read more.

- Docebo, a Toronto-based provider of professional training, filed to raise $125 million. The business is already listed on the Toronto Stock Exchange. Read more.

SPAC

- View Inc, a California-based smart window company, will merge with CF Finance Acquisition Corp. II, a SPAC formed by Cantor Fitzgerald. The deal values View at about $1.6 billion.

- The Lion Electric Company, a Canadian electric car company, plans to go public via merger with Northern Genesis Acquisition Corp., a SPAC, valuing the company at about $1.9 billion. 

-Capitol Investment Corp. V, a SPAC, raised $300 million.

-Altitude Acquisition, which is seeking a business in the travel industry, plans to raise less than previously expected: $250 million.

PEOPLE

- Owl Rock Capital named Amy Ward ­as managing director in the firm's new London office.