Why Palantir is investing in SPACs

Not too long ago, adtech companies were not doing too hot. Under pressure from the likes of Alphabet’s Google and Facebook that were eating up the ad dollars, such businesses struggled to excite investors.

But amid a pandemic that has forced life online and a seperate, broader pushback against big tech, the sector has surged, pushing the likes of content recommendation service Outbrain to an IPO, competitor Taboola to a SPAC deal, and Mediaocean to acquire ad-agency billings software maker, Flashtalking. 

Adding to the list Tuesday: H.I.G. Growth Partners-backed AdTheorent, a company using tech to target customers with ads, said it would merge with MCAP Acquisition, a SPAC backed by Monroe Capital.

Of note in the deal, which gives the combined company a $1 billion valuation, also includes an unusual, but increasingly common, investor in the deal’s accompanying PIPE transaction (private investment in public equity): Palantir Technologies. The big data company that went public last year has been involved in the SPACs of companies such as Babylon Health and aviation startup Lilium, to name a few. The company better known for its government contracts is also a part of AdTheorent’s $121.5 million PIPE.

So why in the world is it betting on such a broad set of businesses? 

Well, at least some of these deals, Palantir’s investment also comes with a deal for said company to become a customer. In the SPAC deal to take wholesale retailer Boxed public, for instance, Palantir’s investment was accompanied by a $20 million customer contract in which Boxed would use the big data company’s services. I am being careful with my wording here because there’s not always a straight line drawn in disclosures between the SPAC deal and such strategic partnerships. Which has raised the question as to whether Palantir then needs to better disclose that it looks to be, to some extent, buying revenue.

Still, in AdTheorent too, Palantir’s strategy continues. Per a source, AdTheorent too is also working on some kind of service deal with Palantir that should be announced in coming weeks.

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

SPEAKING OF SPACS: Disgraced and ridiculed, electric automaker Lordstown Motors has been given an all-important lifeline. The company on Monday said hedge fund YA II committed to buy up to $400 million of the company’s shares over a three-year period. The company previously warned that it may not be able to continue due to a shortage of cash. The commitment meanwhile could encourage other investors to jump in to the company as well. Read more.

P.S. Apologies for this late edition of Term Sheet due to technical issues. Tomorrow’s newsletter will return in the morning.

Jessica Mathews compiled the IPO section of the newsletter.

VENTURE DEALS

- Solarisbank, a Berlin-based fintech startup, raised €190 million ($224 million) in Series D funding valuing it at €1.4 billion ($1.7 billion). Decisive Capital Management led the round and was joined by investors including Pathway Capital Management, CNP, Ilavska Vuillermoz Capital, Yabeo Capital, BBVA, Vulcan Capital, and HV Capital.

- Nium, a payments platform, raised over $200 million in Series D funding. Riverwood Capital led the round and was joined by investors including Temasek, Visa, Vertex Ventures, Atinum Group of Funds, Beacon Venture Capital, and Rocket Capital Investment.

- Wiliot, a San Diego, Calif.-based sensor company, raised $200 million in Series C funding. SoftBank Vision Fund 2 led the round.

- ActiveFence, a New York City and Israel-based cybersecurity startup, raised $100 million in Series A and B funding. CRV and Highland Europe led B while Grove Ventures and Norwest Venture Partners led the A.

- Yoco, a South African payments and software company, raised $83 million in Series C funding. Dragoneer Investment Group led the round and was joined by investors including Breyer Capital, HOF Capital, The Raba Partnership, 4DX Ventures, and TO Ventures.

- Covariant, a Berkeley, Calif.-based robotics company, raised $80 million in Series C funding. Index Ventures led the round and was joined by investors including Amplify Partners and Radical Ventures. 

- MyGlamm, an Indian direct-to-consumer beauty brand, raised $71.3 million. Accel led a $47.8 million tranche while other investors include Amazon, Ascent Capital, Wipro, Bessemer Venture Partners, L’Occitane, Ascent, Amazon, Mankekar family, Trifecta, and Strides Ventures.

- Blaize, an El Dorado Hills, Calfi.-based edge computing company, raised $71 million in Series D funding. Franklin Templeton and Temasek led the round and were joined by investors including DENSO.

- Zilch, the London-based buy-now-pay-later fintech, raised about $55 million in funding. Investors in the round included Goldman Sachs Asset Management and DMG Ventures.

- Teikametrics, a Boston-based optimization platform for sellers on Amazon and Walmart, raised $40 million in Series B funding. Intel Capital led the round and was joined by investors including GoDaddy, Centana Growth Partners, and Lydia Jett ( head of ecommerce at Softbank Vision Fund).

- SEDNA, a London-based maker of a communications system, raised $34 million in Series B funding. Insight Partners led the round and was joined by investors including Stride.VC, Chalfen Ventures and the SAP.iO fund.

- Nym Health, a New York City-based medical coding company, raised $25 million. Addition led the round.

- Spectro Cloud, a Santa Clara, Calif.-based enterprise management platform, raised $20 million in Series A funding. Stripes led the round.

- SPINN, a Los Angeles-based maker of a coffee machine, raised $20 million in funding. Spark Capital led the round and was joined by investors including Amazon’s Alexa Fund and Bar 9 Ventures.

- Cobee, a Madrid-based employee benefits management software maker, raised €14 million ($17 million) in Series A funding. Balderton Capital led the round and was joined by investors including SpeedInvest, Target Global, Encomenda, and Lanai.

- Sila, a Portland-based maker of a banking API, raised $13 million in Series A funding. Revolution Ventures led the round and was joined by investors including Madrona Venture Group, Oregon Venture Fund, and Mucker Capital.

- Launchable, a San Jose, Calif.-based software testing startup, raised $9.5 million in Series A funding. Investors include 645 Ventures, Battery Ventures, Unusual Ventures, and GoingVC.

- Saber Labs, a Dallas-based stablecoin exchange, raised $7.7 million in a seed funding. Race Capital led the round and was joined by investors including Social Capital, Jump Capital, Multicoin Capital, and Solana Foundation.

- Peppy, a London-based digital health company, raised £6.6 million ($10 million) in Series A funding. Felix Capital led the round.

- Mad Rabbit, a Los Angeles-based tattoo aftercare company, raised $2 million in seed funding. Acronym Venture Capital led the round.

- Landis, a New York City-based rent-to-own home startup, raised an undisclosed amount of Series A funding. Sequoia Capital led the round and was joined by investors including  Arrive, Dreamers VC, and Signia Venture Partners. 

PRIVATE EQUITY

- Stonepeak Infrastructure Partners agreed to acquire telecom company Lumen Technologies’ (NYSE: LUMN) Latin American business for $2.7 billion.

- CVC Capital Partners will acquire a part of Spain-based Ebro Foods’ Panzani pasta business for $648.01 million.

- Beringer Capital acquired Inman Group, a Tallahassee, Fla.-based real estate news company. Financial terms weren't disclosed.

- ILC Dover, a portfolio company of New Mountain Capital, agreed to acquire Flexan, a Lincolnshire, Ill.-based medical device contract design and manufacturing company. Financial terms weren't disclosed.

- TA Associates made a majority investment in Elos Medtech (NASDAQ STOCKHOLM: ELOS B), a manufacturing organization in the medical device market. Financial terms weren't disclosed.

- Versaterm Public Safety, backed by Banneker Partners, acquired SPIDR Technologies, a Manhattan Beach, Calif.-based law enforcement tech company. Financial terms weren't disclosed.

- Vista Equity Partners acquired Power Factors, a San Francisco-based renewable energy management software maker. Financial terms weren't disclosed.

EXIT

- Datasite acquired Firmex, a Canadian provider of virtual data rooms, from Vertu Capital and BDC Capital. Financial terms weren't disclosed.

IPO

- Weber, a Palatine, Ill.-based grill company, plans to raise up to $797 million in an offering of 46.9 million shares priced between $15 and $17 per share. It posted sales of $1.5 billion in the year ending in Sept. 2020 and reported $609.7 million in gross profit. BDT Capital Partners backs the firm.

- Candel Therapeutics, a Needham, Mass.-based immunotherapy company, raised $72 million in an offering of 9 million shares priced at $8 per share. PBM Capital and Northpond Ventures back the firm.

- Ocean Biomedical, a Providence, R.I.-based biomedical research company, now plans to raise up to $56.3 million in an offering of 6.3 million shares priced between $7 and $9 per share—it had previously planned to raise up to $54.4 million. The company posted a net loss of $1.7 million in 2020 and has yet to post a revenue.

OTHER

- PerkinElmer (NYSE: PKI) agreed to acquire BioLegend, a San Diego-based maker of reagents and antibodies used in medical research, for about $5.3 billion. 

- RBC Bearings agreed to acquire Dodge, the power transmission unit of Swiss engineering company ABB, for $2.9 billion.

F+FS

- NightDragon, a San Francisco-based investor focused on cybersecurity, raised $750 million. Dave DeWalt, the former CEO of FireEye, McAfee and Documentum, leads the firm.

- iAngels, an Israel-based venture capital firm, raised $55.5 million in capital for its first institutional fund.

- Blackstone’s GP Stakes business will acquire a minority stake in GTCR, a Chicago-based private equity investor.