Can Peloton become Netflix?

Peloton was a risky bet even among venture capitalists.

At its core, the company sells a piece of hardware with virtual cycling lessons, a model skeptics say is easily copyable. They aren’t wrong: As Peloton has grown in the pandemic, so have its rivals including NordicTrack and fitness equipment maker Nautilus.

Despite the naysayers, Peloton has managed to soar in the past year, posting profits and ever-growing revenue in recent quarters even while struggling to produce quickly enough to match demand. No doubt its ability to create an obsessed community has been much of its secret sauce to success.

But does the valuation match the hype? The bottom line remains, as my colleague Robert Hackett notes in the magazine: “The math of Peloton’s valuation—it has a market capitalization of $46 billion—is difficult to justify unless one believes the company will become a tech-media titan. Jay Hoag, a venture capitalist with TCV who joined Peloton’s board after leading a funding round in 2018, should know. An early investor and longtime director of Netflix, he compares Foley’s ambitions to those of Netflix CEO Reed Hastings.”

Peloton seems to be taking an approach where its hardware gets folks hooked on its content, with CEO John Foley calling its equipment “a Trojan horse” that leads consumers to subscribe to its classes. The company is also testing what appears to be a rowing machine. And, as content is king among streaming services, Peloton will also have to keep its classes compelling.

But picking a winner right now in the exercise tech space, is perhaps not the point. Like the streaming wars, the exercise equipment market doesn’t look to be winner-takes-all. And for now, Peloton’s success is perhaps also more of a boon to its younger competitors than not. Private market investors, especially in the later stages, base valuations off of public market valuations. And Peloton is that exercise-tech business that all investors allude to as a sign of potential success when they put money into a hot and new exercise equipment startup. 

Peloton’s long-term success might have more riding on its shoulders than just the one company.

MOVING ABOUT: Angel investor Sriram Krishnan has joined Andreessen Horowitz as a general partner, the venture capital firm announced Wednesday. Having held roles throughout the years in companies including Twitter and Facebook, Krishnan has been tapped to invest in bets related to social networks. But users of the Clubhouse may also be familiar with the investor through The Good Time Show, a live audio series that recently featured a high-profile conversation between Tesla CEO Elon Musk and Robinhood CEO Vlad Tenev tackling the recent GameStop saga. That show, hosted in part by Krishnan, became a sign of what Clubhouse could become in order to match its now $1 billion valuation, with thousands tuning in. 

A lot of a16z is present in the show: The Musk-Tenev exchange was hosted by a soon-to-be general partner of the firm, on a platform backed by said venture capital shop (Clubhouse is backed heavily by a16z), featuring the founder of one of its investments (a16z also is an investor in Robinhood). The firm’s media empire seems well on its way.

In a separate move, Parler CEO John Matze is, well, no longer CEO of the company. The details are still incoming, but Matze says he had a disagreement with conservative donor Rebekah Mercer.

Last year, prominent female-led Aspect Ventures broke up, with co-founder Theresia Gouw starting early-stage shop Acrew Capital. Now Acrew is raising a new fund aimed at bolstering diversity within the industry, not by investing in founders with atypical backgrounds, but by targeting limited partners with underrepresented backgrounds. Read more.

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

VENTURE DEALS

- Mobile Premier League, an Indian e-sports and mobile gaming platform, raised $95 million in Series D funding. Composite Capital and Moore Strategic Ventures led the round and were joined by Base Partners, RTP Global, SIG, Go-Ventures, Telstra Ventures, Founders Circle, and Play Ventures. 

- Pairwise, a Durham, N.C.-based gene editing company focused on food, raised $90 million in Series B funding. Pontifax Global Food and Agriculture Technology Fund and Deerfield Management Company led the round and were joined by Temasek.

- Svante, a Canada-based carbon dioxide capturing company, raised $75 million in Series D funding. Temasek led the round and was joined by investors including Chart Industries (NYSE: GTLS) and Carbon Direct and Export Development Canada.

- Slync.io, a Dallas, Texas-based  logistics company, raised $60 million in Series B funding. Goldman Sachs Growth led and was joined by investors including ACME Ventures, 235 Capital Partners, and Correlation Ventures.

- Brightwheel, a San Francisco-based maker of an early education platform, raised $55 million valuing it above $600 million. Addition led the Series C round and was joined by investors including Emerson Collective, Next Play Ventures, Julia and Kevin Hartz, Daniel Shapero, GGV Capital, Bessemer Venture Partners, and Eniac Ventures.

- Uniformity Labs, a Fremont, Calif.-based additive manufacturing company, raised $38 million in Series B funding. Orion Resource Partners led the round.

- Tovala, a Chicago-based maker of a meal service centered on a smart oven, raised $30 million in Series C funding. Left Lane Capital led the round and was joined by investors including Finistere Ventures, Comcast Ventures, OurCrowd, Origin Ventures, Pritzker Group Venture Capital, and Joe Mansueto.

- Deepgram, a San Francisco-based speech transcription company, raised $25 Million in Series B funding. Tiger Global led the round and was joined by investors including Wing Venture Capital, Citi Ventures, SAP.io, and NVIDIA Inception GPU Ventures. 

- Reverie Labs, a Cambridge, Mass.-based pharmaceutical company developing developing small molecule kinase inhibitors, raised $25 million in Series A funding. Investors included Ridgeback Capital.

- Rocket.Chat, a Brazil-based maker of a platform for virtual communications, raised $19 million in Series A funding. V alor Capital Group, Greycroft, Monashees, and NEA led the round and was joined by investors including e.ventures, Graphene Ventures, ONEVC, and DGF. Read more.

- Evinced, a Palo Alto, Calif.-based automation startup, raised $17 million. M12, BGV, and Capital One Ventures led the round and were joined by Engineering Capital. Read more.

- Vendia, a San Francisco-based maker of code sharing platform, raised $15.5 million in Series A funding. Canvas Ventures led the round and was joined by investors including BMW i Ventures and Sorenson Ventures.

- Cialfo, Singapore-based college search platform for international students, raised $15 million in Series A funding. SIG and Vulcan Capital led the round and were joined by January Capital and Bisk Ventures. 

- SpectraWAVE, a Boston, Mass.-based medical imaging company, raised $13.2 million in Series A2 funding. Deerfield Management led the round.

- OxeFit, a Dallas-based strength training tech maker, raised $12.5 million.  Lydia Partners led the round and was joined by investors including Dallas Cowboys’ Dak Prescott.

- PeaTos, a Los Angeles, Calif.-based snack chip brand, raised $12.5 million in Series B funding. Post Holdings (NYSE:POST) led the round.

- Waitwhile, a San Francisco-based queue management platform, raised $12 million from CRV as part of its Series A.

- Scalinx, a Paris, France-based semiconductor company, raised €10.5 million ($12.6 million) in funding. WaterStart Capital led the round and was joined by BNP Paribas Développement, CEN Innovation, and Unexo.

- Promenade, a Los Angeles-based maker of software for florists and small businesses formerly known as BloomNation, raised $11 million in Series B funding. B. Riley Venture Capital led the round.

- Beam, a maker of a web browser, raised $9.5 million in Series A funding. Pace Capital led the round. Read more.

- VEERUM, a Canadian maker of software to visualize physical assets, raised $7.4 million in Series A funding. BDC’s Industrial Innovation Venture Fund and  Builders VC led the round and were joined by Brick & Mortar Ventures, Evok Innovations, Intergen, and Creative Ventures. 

- Polytomic, a San Francisco-based maker of a data syncing system, raised $2.4 million in seed funding. Caffeinated Capital led the round and was joined by investors including Bow Capital. Read more.

- Dame Products, a Brooklyn, N.Y.-based sex tech company, raised $4 million. Listen led the round and was joined by investors including Chingona Ventures, The Community Fund, Her Capital, HP Reformation Ventures, IgniteXL Ventures, and Joyance Partners.

- Prisidio, a Chicago-based maker of a way to securely store important documents and information, raised $3.3 million in seed funding. OCA Ventures and Origin Ventures led the round.

- Klir, an Irish maker of water compliance software, raised $3.1 million. Investors included Bowery, Spider Capital, and SaaS Ventures. 

- C. Light Technologies, a Berkeley, Calif.-based company using an eye scan to test for neurological diseases, raised $2.5 million in seed funding. Creative Ventures led the round.

- GajiGesa, an Indonesia-based fintech, raised $2.5 million in seed funding. Defy.vc and Quest Ventures led the round.

- Vamstar, a London-based healthcare marketplace, raised $1.7 million in seed funding. Btov led the round and was joined by investors including Antler and Begin Capital.

- Landed, a San Francisco-based maker of a mobile app for hourly workers to find jobs, raised $1.4 million. Javelin Venture Partners led the round and was joined by investors including Y Combinator, and Palm Drive Capital.

- Arkose Labs, a San Francisco-based maker of online fraud and abuse prevention software, raised an undisclosed amount of funding from Sony Innovation Fund by Innovation Growth Ventures.

PRIVATE EQUITY

- Aquiline Partners invested in National Medical Billing Services, a St. Louis, Mo.-based maker of billings management for the ambulatory surgery center market. Financial terms weren't disclosed.

- Alliance Holdings, backed by Align Capital Partners, acquired Aeros Environmental, a Bakersfield, Calif.-based carbon tracking company. Financial terms weren't disclosed.

- Avision Sales Group, an Osceola Capital portfolio company, acquired Angel-Cotton Associates, Apex Commercial Kitchen, Demlow Marketing, Mid-America Sales, Plexus Reps, and TRC Marketing.  The six add-ons operate in the janitorial services and foodservice equipment space. Financial terms weren't disclosed.

- Catalyst Power Holdings, backed by BP Energy Partners, acquired US Energy Partners, a Buffalo, N.Y.-based energy provider. Financial terms weren't disclosed.

- CVC Capital Partners agreed to acquire a majority stake in Shiseido's personal care business, which includes the Japanese skincare and cosmetics producer’s drugstore brands, in a deal valued at $1.5 billion.

- Renovus Capital Partners made a "significant" investment in Thought Logic Consulting, an Atlanta, Ga.-based business and technology consulting firm. Financial terms weren't disclosed.

- Susquehanna Growth Equity made a minority investment in Seek Now, a Louisville, Ky6.-based technology-enabled inspection platform for the property and casualty insurance industry. Financial terms weren't disclosed.

- Trive Capital acquired Oscar W. Larson Company, a Clarkston, Mich.-based equipment distributor and provider of installation, testing, inspection, maintenance and repair services. Financial terms weren't disclosed.

- Trilantic North America and Energy Impact Partners acquired a controlling stake in Powin Energy Corporation, a Tualatin, Or.-based maker of scalable battery energy storage solutions. Financial terms weren't disclosed.

EXITS

- AppLovin agreed to acquire Adjust, a Berlin-based startup with tools for tracking app performance, for an estimated $1 billion, per Bloomberg. Highland Europe, Active Venture Partners, and Eurazeo are among Adust’s investors. Read more.

- Advent International is weighing a potential sale or merger of King Koil China, its mattress company, in a deal that could value it around $1 billion, per Bloomberg. Read more.

- Worthington Industries acquired GTI Holding Company, a Secaucus, N.J.-based seller of hand-held tools, for $115 million. High Road Capital Partners backed GTI.

- Box (NYSE: BOX) agreed to acquire SignRequest, a Netherlands-based competitor to Docusign, for $55 million. 

OTHERS

- Jazz Pharmaceuticals (Nasdaq: JAZZ) agreed to acquire GW Pharmaceuticals (Nasdaq: GWPH), a U.K.-based producer of drugs based on cannabis, for $7.2 billion in cash and stock.

- Veracyte (Nasdaq: VCYT) agreed to Decipher Biosciences (Nasdaq: DECI), a San Diego, Calif.-based biotech focused on oncology, for $600 million in cash and stock.

IPOS

- Telus International, the Canadian affiliate of wireless carrier Telus Corp., raised $925 million in its IPO of 37 million shares (43% sold by insiders) priced at $25. Baring Private Equity also backs the firm. Read more.

- MeridianLink, a Costa Mesa, Calif.-based financial software provider, is gearing up to go public in a deal that could value it at $3 billion including debt, per Reuters. Thoma Bravo backs the firm. Read more.

- Daimler ( FRA: DAI ) plans to list its truck unit by the end of 2021. Read more.

- Sana Biotechnology, a Seattle-based preclinical biotech developing engineered cell therapies, upped the number of shares it plans to offer. It plans to raise $517 million in an offering of 22 million shares priced between $23 to $24. Investors include ARCH Venture Partners and Flagship Pioneering. Read more.

- ON24, a San Francisco, Calif.-based webinar and virtual event platform, raised $426 million in its IPO of 8.6 million shares priced at $50 apiece. U.S. Venture Partners, Canaan Equity, and Goldman Sachs backs the firm. Read more.

- Cloopen Group Holding, a Chinese cloud-based communication company,  plans to raise $280 million at the midpoint of its proposed offering of 20 million ADSs priced between $13 to $15. Sequoia Capital China and Trustbridge Partners back the firm. Read more.

- Adagene, a Chinese biotech developing antibody cancer immunotherapies,  plans to raise $132 million in its offering of 7.4 million ADSs priced between $17 to $19. F-Prime Capital Partners and Eight Roads back the firm. Read more.

- Apria, a Indianapolis-based maker of healthcare equipment, plans sell some $150 million worth of shares (7.5 million shares priced between $19 to $21) on behalf of shareholders. Blackstone backs the firm. Read more.

- Signify Health, a Norwalk, Conn.- maker of a payment program for healthcare companies, plans to raise $423 million in an offering of 23.5 million shares priced between$17 to $19. New Mountain Capital backs the firm. Read more.

SPACS

- CCC Information Services, a Chicago-baed property and casualty data provider, plans to go public via merger with Dragoneer Growth Opportunities, a SPAC. A deal is expected to value the business at $7 billion. Advent backed CCC.

- 23andMe, the Sunnyvale, Calif.-based genetics company, will go public via merger with VG Acquisition Corp. A deal values the combined business at $3.5 billion.

F+FS

- ARCH Venture Partners, a Chicago-based investment firm, closed ARCH Venture Fund XI with nearly $1.9 billion.

- Sapphire Ventures, a Palo Alto, Calif.-based venture firm, raised $1.7 billion across multiple funds. 

- Seaside Equity Partners, a San Diego-based growth equity firm, raised $160 million for its first fund.

- Serve Capital Partners, an Austin-based private equity firm,raised $125.9 million for its third fund. Read more.

PEOPLE

- StepStone Group (Nasdaq: STEP), a New York-based private markets investment firm, named 10 new partners and 10 new managing directors. Read more.

- Information Venture Partners, a Toronto-based venture capital firm, named Jane Podbelskaya as a principal. 

- ABS Capital, a Baltimore-based growth equity investment firm, promoted Mike Avon to managing general partner. Phil Clough was named chairman and will continue to serve as a full-time general partner. 

- Forgepoint Capital, a San Francisco-based venture investor focused on cybersecurity, promoted Will Lin to managing director; Ernie Bio to principal; and Rohit Gupta to associate.

- Techstars Los Angeles, the Los Angeles-focused branch accelerator, named Matt Kozlov as managing director. Read more.

- One Peak Partners, the London-based  growth equity firm, promoted Christoph Mayer to partner.