This is the web version of Term Sheet, a daily newsletter on the biggest deals and dealmakers. Sign up to get it delivered free to your inbox.
2024 is apparently going to be a wonderful year for companies that are going public via special purpose acquisition companies.
Amid the frenzy of companies that merged with a SPAC in recent months, many are projecting that they will hit a certain financial milestone in 2024.
On Tuesday, German aviation startup Lilium said it expects to generate revenue in 2024 and hit positive EBITDA (earnings before interest, taxes, depreciation, and amortization) the year after. Electric car company Nikola said last year that it expects to reach a positive EBITDA also in 2024. As did self-driving tech company Luminar. And Lucid Motors. And Canoo.
Aerofarm, a vertical farming company that announced plans to go public via merger with Spring Valley Acquisition last week, expects to be near EBITDA positive by the second half of that year, though still in the red on an annualized basis.
Oh, and here’s U.K.-based car-selling marketplace Cazoo pointing to a “clear pathway to significant revenue growth and strong profitability” with that same figure expected to turn northwards in, you guessed it, 2024.
Others are estimating a softer lead into the year: Indoor farming startup AppHarvest projected in its SPAC merger presentation that it would eke out a positive EBITDA of $14 million in 2023 before achieving a more solid 2024. Startups Clover Health and Opendoor project the same to varying degrees (Opendoor says its “adjusted EBITDA will reach $9 million in 2023”).
The ability to make these projections is a big reason why SPAC mergers are so attractive to companies that have yet to post a revenue or profit. Rules around the traditional initial public offering process prohibit companies making forecasts of their business. SPACs, though, operate under less onerous merger rules, which do allow for such estimates to be made years out into the future. Revenue-less startups need to make these projections if they are to sell their shares to investors.
But that also leaves the question: Are some SPACs taking advantage of these looser disclosure requirements?
Granted, not all SPACs are betting on 2024: WeWork estimates its “adjusted EBITDA” will turn green by the final quarter of this year, while telehealth startup Hims & Hers refreshingly doesn’t appear to have projected further than 2022.
So 2024 is going to be one heck of a beautiful year for companies that went public via SPAC…if the projections are to be believed. Taken as a whole (and setting aside the issues with EBITDA for now), these figures paint a rose-colored, future of flying taxis and autonomous vehicles zooming all across America. But to me, it’s one that feels a bit too much like fantasy than reality.
SORRY, REDDIT: It’s been a well-loved, if not obsessive, past-time for Reddit traders to guess which company Bill Ackman’s mega $4 billion SPAC plans to acquire. Unfortunately, they may have to wait a bit longer for any sort of confirmation. The hedge fund investor said in an investor letter Monday that the Pershing Square Tontine will miss its goal to find a target by the end of this quarter, though the firm is already “likely to launch a second SPAC” after the current one has completed a merger. “We remain convinced that an investment in [Pershing Square Tontine] will generate highly attractive long-term returns,” Ackman wrote.
Lucinda Shen
Twitter: @shenlucinda
Email: [email protected]
VENTURE DEALS
- Didi Chuxing, the Chinese ride-hailing company, is in talks to raise as much as $500 million at a valuation of about $6 billion, per Bloomberg. Read more.
- Dapper Labs, a Vancouver-based company behind NBA Top Shot, raised $305 million in new funding, valuing it at $2.6 billion. Coatue led the round and was joined by investors including Michael Jordan, Kevin Durant, Andre Iguodala, Kyle Lowry, Spencer Dinwiddie, Andre Drummond, Alex Caruso, Michael Carter-Williams, and Josh Hart.
- Cityblock Health, a Brooklyn-based healthcare provider for Medicaid and lower-income Medicare beneficiaries, raised $192 million in extended Series C funding. Tiger Global led and was joined by investors including Kinnevik AB, Maverick Ventures, General Catalyst, Wellington Management, Thrive Capital, Redpoint Ventures, Echo Health Ventures, 8VC, and AIMS Imprint.
- Pyxis Oncology, a Cambridge, Mass.-based oncology company, raised $152 million in Series B funding. Arix Bioscience and RTW Investments led the round and were joined by investors including Perceptive Advisors, RA Capital Management, Pfizer Ventures, BVF Partners, L.P., Janus Henderson Investors, and Cormorant Asset Management.
- Omega Therapeutics, a Cambridge, Mass.-based epigenomic programming platform, raised $126 million in Series C funding. Flagship Pioneering led the round and was joined by investors including investors included Invus, Fidelity Management & Research Company, BlackRock, Cowen, Point72, Logos Capital, and Mirae Asset Capital.
- 6sense, a San Francisco-based sales platform, raised $125 million in Series D funding, valuing it at $2.1 billion. D1 Capital Partners led the round and was joined by investors including Sapphire Ventures, Tiger Global, and Insight Partners.
- BrightInsight, a San Jose, Calif.-based provider of a digital health platform for biopharma and medtech, raised $101 million in Series C funding. General Catalyst led the round.
- Cameo, a Chicago-based app for sharing personalized celebrity videos, raised $100 million in Series C funding, valuing it at over $1 billion.E.ventures led the round and was joined by investors including GV (formerly Google Ventures), Amazon’s Alexa Fund, UTA Ventures, SoftBank Vision Fund 2, Valor Equity Partners, and Counterpoint Global.
- Everli, a European marketplace for online grocery shopping, raised $100 million in Series C funding. Verlinvest led the round and was joined by investors including Luxor, DN Capital, C4 Ventures, and Convivialité Ventures. Read more.
- Capitolis, a capital-markets focused financial resource optimization platform, raised $90 million in Series C funding. Andreessen Horowitz led the round.
- HYCU, a Boston-based enterprise software company specializing in multi-cloud data backup and recovery as a service, raised $87.5 million in Series A funding. Bain Capital Ventures led the round and was joined by investors including Acrew Capital.
- Ramp, a New York-based corporate card startup, is raising $65 million in funding and $50 million in funding that will value it at $1.1 billion and $1.6 billion, per the Information. D1 Capital Partners led the $65 million round, and was joined by investors including Stripe, Coatue Management, and Goldman Sachs. Stripe is also leading the second $50 million. Read more.
- Ecovative, a Green Island, N.Y.-based mycelium technology company, raised $60 million in Series D funding. Viking Global Investors led the round and was joined by investors including Senator Investment Group, AiiM Partners, and Trousdale Ventures.
- Zoomin Software, a New York-based provider of knowledge orchestration solutions, raised $52 million in Series C funding. General Atlantic led the round and was joined by investors including Bessemer Venture Partners, Salesforce Ventures, and Viola Growth.
- Striim, a Palo Alto-based data integration platform, raised $50 million in Series C funding. Goldman Sachs Growth Equity led the round and was joined by investors including Summit Partners, Atlantic Bridge Ventures, Dell Ventures, and Bosch Ventures.
- Cleo, a San Francisco-based family benefits platform, raised $40 million in Series C funding. Transformation Capital led the round and was joined by investors including Glynn Capital, PruVen Capital, Gaingels, Greylock, NEA, and Felicis.
- Augmedics, a Chicago-based augmented reality surgical image guidance startup, raised $36 million in Series C funding. H.I.G. Capital, Revival Healthcare Capital, and Almeda Ventures led the round and were joined by HCA Healthcare Health Insight Capital and XR Invest.
- Manual, a London-based company focused on men’s health, raised $30 million in Series A funding. Sonoma Brands,Felix Capital, and Cherry Ventures invested.
- Ethic, a New York-based asset management platform for advisors, raised $29 million in Series B funding. Oak HC/FT led the round and was joined by investors including Fidelity Investments, Nyca Partners, Sound Ventures, ThirdStream Partners, Urban Innovation Fund, and Kapor Capital.
- KUDO, a New York-based maker of a video conferencing platform with real-time multilingual interpretation, raised $21 million in Series A funding. Felicis Ventures led the round and was joined by investors including Maverick Ventures, Elephant VC, FJ Labs, Global Founders Capital and Bill Ackman.
- SteadyMD, a St. Louis, Mo.-based telehealth provider, raised $25 million in Series B funding. Lux Capital led the round and was joined by investors including Sound Ventures and Acrew Capital.
- Second Closet, a Toronto-based self-storage company, raised CAD$20 million ($16 million). Whitecap Venture Partners led the round and was joined by investors including Intact Ventures MIG, Michael Hyatt, and Cowie Capital Partners.
- INBRAIN Neuroelectronics, a Barcelona-based startup developing neuroelectronic interfaces for cure brain disorders, raised $16.8 million in Series A funding. Asabys Partners and Alta Life Sciences led the round and were joined by Vsquared Ventures and TruVenturo GmbH.
- Rivery, a New York-based devops platform, raised $16 million. Entree Capital led the round and was joined by investors including State Of Mind Ventures.
- Spekit, a Denver-based digital adoption platform, raised $12.2 million in Series A funding. Foundry Group and Renegade Partners led the round and were joined by Operator Collective, Matchstick Ventures, and Bonfire Ventures.
- Productsup, a Berlin-based e-commerce data integration company, raised $10 million in funding. Nordwind Capital was among the investors.
- ID5, a London-based identity solution provider, raised $6 million in Series A funding. Alliance Entreprendre and Progress Ventures led the round and were joined by 360 Capital Partners.
- Unhedged, a New York-based-based financial research and collaboration platform, raised $4.4 million. Littlebanc led the round and was joined by investors including Palm Ventures.
- Infinite Looks, a New York-based maker of a direct-to-consumer hair care brand, raised $4.2M in Series A funding. Johnson & Johnson Innovation led the round and was joined by investors including Ignite Venture Studio and Symrise.
- Vivodyne, a Philadelphai-based bio-pharma startup, raised $4 million in seed funding. Kairos Ventures led the round.
- BusRight, a Boston-based digital school bus route planning and management solution, raised $2.5 million in seed funding. Underscore VC and Long Journey Ventures invested.
PRIVATE EQUITY
- Carlyle Aviation Partners acquired Fly Leasing Limited (NYSE: FLY), an Ireland-based aircraft leasing investment company, for about $2.4 billion.
- Eurazeo Brands acquire a majority stake in Ultra Premium Direct for 68 million euros.
- Arsenal Growth Equity invested in Elevate K-12, a Chicago-based edtech. Financial terms weren't disclosed.
- H.I.G. Capital agreed to acquire Hibu Group, a Cedar Rapids, Ia.-based provider of digital marketing services. Financial terms weren't disclosed.
- IBH, backed by Periscope Equity, acquired Uprise, a personalized care platform using self-guided modules, live coaching, and in-person therapy. Financial terms weren't disclosed.
- Northlane Capital Partners invested in Empower Community Care, an Atlanta-based behavioral health organization. Financial terms weren't disclosed.
- Reedy Industries, a portfolio company of Audax Private Equity, acquired Tessendorf Mechanical Services, Control Works, and Pro-Tek, providers of HVAC and mechanical services based out of the midwest. Financial terms weren't disclosed.
- Shore Capital Partners invested in Innovative Packaging Company, a Vancouver, Wash.-based custom packaging solutions provider. Financial terms weren't disclosed.
- Thoma Bravo invested in Applitools, a San Mateo-based provider of visual test automation software. Financial terms weren't disclosed.
- Vista Equity Partners agreed to make a majority investment in TripleLift, a New York-based advertising tech platform. Financial terms weren't disclosed.
EXITS
- MessageBird acquired 24sessions, an Amsterdam-based customer communications platform backed by investors including Capital Mills and MaasInvest. Financial terms weren't disclosed.
- Astorg is in exclusive negotiations to become the majority shareholder of Corialis, a Belgium-based designer and manufacturer of aluminium systems for windows and doors, from CVC Capital Partners. Financial terms weren't disclosed.
OTHER
- News Corp. (Nasdaq: NWSA) is nearing a deal to acquire the consumer arm of Houghton Mifflin Harcourt, a publisher of education materials, per the Wall Street Journal. Read more.
IPO
- Raizen, a Brazilian energy firm that is a venture between Cosan and Royal Dutch Shell, is preparing for an IPO to raise 13 billion reais ($2.3 billion), per Reuters. Read more.
- Knock, an Atlanta-based property tech startup, is weighing an IPO that could raise between $400 million to $500 million, smerger with a SPAC, and a direct listing, per Bloomberg. A deal could value it at roughly $2 billion. Read more.
- Smart Share Global, a Shanghai-based provider of mobile device charging stations, plans to raise $201 million in an offering of 17.5 million ADSs priced between $10.50 to $12.50. Alibaba backs the firm. Read more.
SPAC
- SomaLogic, a Boulder, Colo.-based proteomics life-sciences platform, plans to go public via merger with CM Life Science II, a SPAC. A deal values the combined company at $1.2 billion.
- Apollo Strategic Growth Capital III, a SPAC formed by Apollo Global Management, plans to raise $400 million.
- Tribe Capital Growth II, a tech-focused SPAC from Tribe Capital, filed to raise $300 million.
- Learn CW Investment, an education-focused SPAC backed by Learn Capital and Commonwealth Asset Management, filed to raise $250 million.
F+FS
- Atlas Holdings, a Greenwich, Conn.-based investment firm, closed its fourth private equity investment fund with $3.1 billion.
- Canvas Ventures, a Portola Valley, Calif.-based early-stage firm, raised $350 million for its newest fund.
- Banneker Partners, a San Francisco-based investment firm, closed Banneker Partners Fund I with $350 million.
- AnD Ventures, an Israel-based venture firm, raised $50 million.
PEOPLE
- Z Capital Group, a New York-based private markets asset manager, named Annie Shick as a managing director and the chief financial officer.
