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If you’ve noticed the lack of special purpose acquisition companies mentioned in the deals section of this newsletter lately, you’re not imagining it.
In recent weeks, SPACs have hit the rack.
The surge in special purpose acquisition companies halted, with just 10 created as of April 21 compared to the 109 that went public the month prior, per SPAC Research.
No doubt the Security and Exchange Commission’s decision to take a closer look at the space has played a role in the slowdown. The SEC issued new guidelines that warrants—a key part of SPAC deals—may have to be considered liabilities rather than equity for accounting purposes. Reuters reports that the SEC is looking into rules that could curb the wildly optimistic projections SPAC-backed companies can make.
Despite the reputational risk of being connected with the four-letter acronym, companies are still going public via merger with SPACs. In that sense, predictions of a divide between best and worst SPACs have been accurate. The question is, do we know who will fall in the former bucket? E-commerce company Enjoy Technology announced plans to merge with a blank-check business Wednesday. Vacation startup Sonder agreed on Friday to go public via merger with Gores Metropoulos II in a deal that values the combined company at about $2.2 billion. And Forbes is reportedly in talks to go public via a SPAC merger,
As interest rates stay low, interest in SPACs is inversely continuing. But perhaps more of that will focus on the hunt for a target.
Here’s a Friday PitchBook take on the division: “For now, SPAC sponsors still have incentive to raise more SPACs while the market is receptive and hungry for growth given the clear economic benefits to these sponsors. While potential SEC treatment has currently halted new SPAC registrations, we expect sponsors to adjust as necessary and for new SPACs to continue to list.
However, given the pure number of SPACs in the market, we believe new SPAC IPO issuance will likely cool off over the next few months, as sponsors turn to completing deals with their active SPACs rather than raising new pools of capital until more clarity is available. There are still multitudes of capable firms or individuals that have not yet raised a SPAC, which may support some sustained new IPO activity.
That said, we believe the majority of activity will come from those sponsors that have already committed significant time to developing this strategy. From the public investor side, we do not anticipate a drop in demand unless there is an external shock to the system such as broader public equity weakness, rising interest rates, or a change in SEC treatment of SPACs that materially distorts the incentives.”
SPACs announced about 39 acquisitions as of April 15 this year, on track to beat last year’s figure of 79, per Pitchbook.
In short: down, but not quite out.
ENDEAVORING: Endeavor Group Holdings, a Los Angeles-based entertainment company that owns modeling agency IMG and mixed-martial-arts franchise UFC, raised about $511 million in its IPO, valuing it at just over $6 billion. Oh, and it has added Tesla CEO Elon Musk to its board since it last withdrew its 2019 IPO. Shares of the company closed up about 5% in its first day trading.
Housekeeping: I’m out for the next day. Please send any tips or deals to my colleague, [email protected].
Lucinda Shen
Twitter: @shenlucinda
Email: [email protected]
Anne Sraders helped curate today’s Term Sheet.
VENTURE DEALS
- TravelPerk, a Spain-based travel management platform, raised $160 million in Series D equity and debt. Greyhound Capital led the round and was joined by investors including DST, Kinnevik, Target Global, Felix Capital, Spark Capital, Heartcore, LocalGlobe, Amplo, and 14W. The company declined to break down the division between equity and debt.
- Vectra AI, a San Jose, Calif.-based threat detection and response company, raised $130 million. Blackstone Growth led the round.
- Wasabi, a Boston-based cloud storage company, raised $112 million in Series C funding. Fidelity Management & Research Company led the round.
- Sera Prognostics, a Salt Lake City-based maternal and neonatal health company, raised $100 million in Series E funding. Investors included Vivo Capital, aMoon Fund, Parian Global, as well as Anthem and Blue Ox Healthcare Partners.
- Solidia Technologies, a Piscataway, N.J.-based cement and concrete company, raised $78 million. Imperative Ventures and Zero Carbon Partners led the round and were joined by Canada Pension Plan Investment Board, Breakthrough Energy Ventures, Prelude Ventures, PIVA Capital, John Doerr, BP, OGCI Climate Investments, and Bill Joy.
- Taster, a French digital restaurant brand, raised $37 million in Series B funding. Investors include Octopus Venture, Battery Ventures, Latitude (LocalGlobe), HeartCore, Rakuten, GFC, and Founders Future.
- RapidDeploy, an Austin-based emergency dispatch and analytics platform, raised $29 million in Series B funding. Morpheus Ventures led the round and was joined by investors including GreatPoint Ventures, Ericsson Ventures, Samsung Next Ventures, Tao Capital Partners, Clearvision Ventures, and Tau Ventures.
- Super, an Indonesia-based social e-commerce company, raised $28 million in Series B funding. SoftBank Ventures Asia led the round.
- 1upHealth, a Boston-based provider of a health data platform, raised $25 million in Series B funding. F-Prime Capital led the round and was joined by investors including Jackson Square Ventures, Eniac Ventures, and Social Leverage.
- Finoa, a Berlin-based digital asset custody company, raised $22 million in Series A funding. Balderton Capital led the round and was joined by investors including Coparion, Venture Stars, and Signature Ventures.
- Botpress, a Montreal-based early-stage startup, raised $15 million in Series A funding. Decibel and Inovia Capital led the round.
- PortalOne, an Oslo, Norway-based games platform, raised $15 million in seed funding. Investors included Founders Fund and TQ Ventures, as well as Coatue Management, Rogue Ventures, Signia Venture Partners, Seedcamp, Talis Capital, and SNÖ Ventures.
- Keeper Tax, a San Francisco-based tax filing software for gig workers, creators and freelancers, raised $13 million in Series A funding. Investors included e.ventures, Matrix Partners, and Foundation Capital.
- Firstbase, a Wilmington, De.-based remote work platform, raised $13 million in Series A funding. Andreessen Horowitz led the round and was joined by investors including B Capital Group and Alpaca VC.
- Gr4vy, a San Mateo, Calif.-based payments company, raised $11.1 million in Series A funding. Nyca Partners led the round and was joined by investors including Activant Capital, Global Founders Capital, and Firestartr.
- Grin, a New York-based orthodontics platform for teeth straightening, raised an additional $10 million in funding. Investors included P&G, Triventures, and SpringRock.
- Notional Finance, a New York-based fixed interest rate borrowing company based off Ethereum, raised $10 million in Series A funding. Pantera Capital led the round and was joined by investors including Parafi Capital, 1Confirmation, Spartan Group, Nascent, and Nima Capital.
- The Public Health Company, a Goleta, Calif.-based platform for detecting infectious diseases, raised $8 million in seed funding. Investors include Venrock, Verily, and Sweat Equity Ventures.
- Kickfurther, a Boulder, Colo.-based crowdfunded inventory funding platform, raised $5.9 million in extended seed funding. Grand Oaks Capital led the round and was joined by investors including Draper Associates and Bill Tai.
- Obviously AI, a San Francisco-based maker of a no-code tool for building AI models, raised $3.6 million TMV led its seed, and was joined by investors including B Capital Group, Golden Gate Ventures, and Arka Venture Labs.
- CareCar, a Denver-based benefit manager, raised $3 million in seed funding. Kapor Capital and Impact America Fund led the round and was joined by investors including Concrete Rose.
- ReleaseHub, a San Francisco-based environment deployment and management startup, raised $2.7 million. Sequoia led the round and was joined by investors including Y Combinator, Rogue VC, and Liquid Capital.
- Rapchat, a Columbus, Ohio-based music app for rap and hip hop up-and-comers, raised $2.3 million in funding in an extended seed round. Adjacent and Sony Music Entertainment led the round.
- interviewIA, a Denver-based job interview workflow platform, raised $2 million in seed funding. The Colorado Impact Fund led the round and was joined by investors including FirstMile Ventures, Rockies Venture Club, Outbound Capital, Dasein Capital, Stout Street Capital, and Service Provider Capital.
- Erase All Kittens, a London-based game designed to inspire girls to code, raised $1 million in seed funding. Twinkl Educational Publishing led the round and was joined by investors including Christian Reyntjens.
PRIVATE EQUITY
- Blackstone invested in Hotwire Communications, a Fort Lauderdale, Fla.-based provider of fiber-to-the-home. Financial terms weren't disclosed.
- Hamilton Robinson Capital Partners recapitalized Zone 4, an Orange, Calif.-based installer of automated storage and retrieval systems. Financial terms weren't disclosed.
- Olam Food Ingredients agreed to acquire Olde Thompson, an Oxnard, Calif.-based maker of private label dry spices and seasonings, from Kainos Capital. Financial terms weren't disclosed.
- Two Sigma Impact and Avance Investment Management acquired Wholesale Supplies Plus, an Independence, Oh.-based provider of ingredients to personal care, beauty and home fragrance product makers. Financial terms weren't disclosed.
- Argentum invested in UFA, a Burlington, Mass.-based provider of air traffic control simulation and training software. Financial terms weren't disclosed.
EXITS
- Nestle agreed to acquire the main brands of vitamin and supplements maker The Bountiful Company from KKR for $5.8 billion.
OTHER
- Summit Utilities agreed to acquire the Arkansas and Oklahoma natural gas businesses of CenterPoint Energy, a Houston, Texas-based electricity company, for $2.2 billion in cash.
- IBM acquired Turbonomic, a Boston-based provider of tools to manage application performance, for about $1.5 billion, per Reuters.
- Stripe acquired TaxJar, a Woburn, Mass.-based platform for e-commerce merchants to manage sales taxes. Financial terms weren't disclosed.
IPOS
- Allvue Systems, a Coral Gables, Fla.-based investment management software firm for private investors backed by Vista Equity Partners, is reportedly planning an IPO that could value the company at up to $3 billion, Bloomberg reports citing sources.
SPACS
- Sonder, a San Francisco-based short-term rentals and hotel lodging company, agreed to go public via a merger with blank check company Gores Metropoulos II. A deal values the combined entity at $2.2 billion.
- Insurity Capital, a blank check company from ShiftPixy, filed to raise up to $500 million.
- TechStackery, another SPAC from ShiftPixy, filed to raise up to $250 million.
PEOPLE
- Sandbox Industries, a Chicago-based venture firm, named Jennifer Levin Carter as managing director.
- Adjuvant Capital, a life sciences investment firm, named Philippe Dro as a partner.
- Work-Bench, a New York-based enterprise-focused firm, promoted Kelley Mak to partner and Priyanka Somrah to senior analyst.
