Good morning, Term Sheet readers. Finance reporter Anne Sraders here again, filling in for Lucinda while she’s on vacation.
If you’ve cracked a business newspaper or paid attention to the finance world even a little in the past couple years, you’ve surely noticed a theme: There’s been a massive amount of cash flowing into startups. Funding rounds have swelled, as have the number of unicorns (startups worth $1 billion or more). In fact, yesterday I wrote about how the U.S. Venture capital industry is having a blistering (read: record-setting) year so far in 2021, based on Refinitiv data.
But there’s also another trend afoot alongside the booming startup scene: The rise of startups…for startups.
In recent years, companies have sprung up that cater to startups and the investors that fund them. And according to Santosh Rao, head of research at Manhattan Venture Partners, “This is something that is a natural evolution of the space,” he tells me. “I think you can trace it back to a lot of funding available for private companies.”
In the last 10 to 20 years, Rao says, there’s been a “tectonic shift” in the technology landscape, from the cloud to A.I., that’s “spawned” a whole host of new sub-industries and startups that operate in them. This universe of new startups, in turn, need companies to offer them services like banking and equity management. “So for startups to cater to startups makes absolute sense,” he argues.
Case in point: Last week, Miami-based Allocations, a startup founded in 2019 that lets private equity investors build and close funds and special purpose vehicles, or vehicles made from pooled capital for one investment, emerged from stealth mode and announced it raised $4 million in funding, earning it a $100 million valuation. The company effectively operates as a software product for investors and fund managers to quickly raise funds—which in turn will be cycled into startups themselves.
But Allocations certainly isn’t the only startup tapping into the fortunes of the growing space.
Mercury bank, which advertises itself as the bank for startups, provides growing companies with banking services, FDIC-insured accounts, and the opportunity to network with investors (including Sequoia, a16z, and Greylock), as well as offerings like cash management.
Other startups for startups help growing companies manage their cap tables and equity, like Pulley, founded in 2019. The firm is facing off against the likes of banking titan Morgan Stanley’s Shareworks platform and fintech Carta, which offer similar cap table management services.
And then there’s MicroAcquire, founded last year, that claims to help startups find buyers and sell their startups in a fraction of the time of a normal sale (they advertise 30 days on their site). The platform enables startups to anonymously post key metrics and pitch decks on its platform and find an acquirer.
All of this underlines just how booming the startup and private capital space has been: That there’s so much money in startups right now that the industry is birthing other startups to cater to them and their investors.
And, it shows that there’s a host of companies that believe the space is lucrative enough to create a business dedicated to it.
Anne Sraders
Twitter: @AnneSraders
Email: [email protected]
Jessica Mathews compiled the IPO and SPAC sections of this newsletter.
VENTURE DEALS
- OwnBackup, an Englewood Cliffs, N.J.-based cloud-based data protection platform, raised $240 million in Series E funding. Alkeon Capital and B Capital Group co-led the round and were joined by investors including BlackRock Private Equity Partners, Tiger Global, Insight Partners, Salesforce Ventures, Sapphire Ventures, and Vertex Ventures.
- FalconX, a San Mateo, Calif.-based cryptocurrency trading platform focused on institutional users, raised $210 million in Series C funding. Altimeter Capital, Sapphire Ventures, B Capital Group and Tiger Global Management led the round and were joined by investors including Mirae Asset and Amex Ventures.
- GentiBio, a Boston-based biotherapeutics company focused on regulatory T cell therapies, raised $157 million in Series A funding. Matrix Capital Management led the round and was joined by investors including Avidity Partners, JDRF T1D Fund, OrbiMed, RA Capital Management, Novartis Venture Fund, and Seattle Children’s Research Institute.
- Chrono24, a Germany-based marketplace for luxury watches, raised over €100 million ($118 million) in Series C funding. General Atlantic led the round and was joined by investors including Aglaé Ventures, Insight Partners, and Sprints Capital.
- Upgrade, a San Francisco-based fintech that offers affordable credit to consumers, raised $105 million in Series E funding. Koch Disruptive Technologies led the round and was joined by investors including BRV and Ventura Capital.
- People.ai, a Redwood City, Calif.-based revenue operations and intelligence using AI, raised $100 million in Series D funding. Akkadian Ventures’ Mike Dinsdale and Mubadala Capital’s Abdulla AlBanna co-led the round and were joined by investors including ICONIQ Capital and Lightspeed Venture Partners.
- Cart.com, a Houston-based e-commerce software and services platform, raised $98 million in Series B funding. Oak HC/FT led the round and was joined by investors including PayPal Ventures, Clearco, G9 Ventures, Mercury Fund, Valedor Partners, and Arsenal Growth.
- Jerry, a Palo Alto-based car insurance comparison site, raised $75 million in Series C funding. Goodwater Capital led the round and was joined by investors including Bow Capital, Kamerra, Highland Capital Partners, and Park West Asset Management.
- Saturn, a New York-based social calendar startup, raised over $44 million in funding from General Catalyst, Insight Partners, and Coatue.
- AviaGames, a Mountain View, Calif.-based mobile gaming company that matches players based on their skill levels, raised $40 million in funding. Investors included ACME Capital, Washington Harbour Partners and Powerhouse Capital, Makers Fund, and Galaxy Digital.
- Arevo, a Milpitas, Calif.-based 3D printing startup, raised $25 million in funding. Khosla Ventures led the round and was joined by investors including Founders Fund, GGVC, Alabaster, and Defy.
- HopSkipDrive, a Los Angeles-based youth school transportation hire service, raised $25 million in Series C funding from Energy Impact Partners, Keyframe Capital, FirstMark Capital, and 1776 Ventures.
- XpertSea, a Canada-based company focused on developing efficient technology and financial solutions for the seafood industry, raised $20 million in Series B funding. QED Investors and Atlantico co-led the round and were joined by investors including Investissement Quebec, Obvious Ventures, Aqua-Spark, Tony Fadell’s Future Shape, Real Ventures, and edō Capital.
- Tetavi, an Israel-based startup focused on volumetric video and hologram technology for immersive media and gaming experiences, raised $20 million in funding. Insight Partners led the round and was joined by investors including OurCrowd and Nimble Ventures.
- Horizen Labs, an Austin-based blockchain technology platform focused on developing secure and programmable blockchains, raised $7 million in seed funding. Kenetic Capital led the round and was joined by investors including Digital Currency Group, Liberty City, Sound Ventures, Deribit, Artist Capital, Deus, and LionTree.
- ByondXR, an Israel-based virtual retail shopping platform, raised $7 million in seed funding. Firstime and OurCrowd led the round and were joined by investors including HTC founder and former CEO Peter Chu.
- Liquality, a New York-based multi-chain browser extension wallet for cryptocurrencies, raised $7 million in funding. Hashed and Galaxy Digital led the round and were joined by investors including White Star Capital, Accomplice, Coinbase Ventures, and Alameda Research.
- Surfside, a New York-based marketing platform for the cannabis industry, raised $4 million in seed funding. Casa Verde led the round.
- Upscribe, a Los Angeles-based subscription software firm catering to direct-to-consumer ecommerce companies, raised $4 million in seed funding. Uncork Capital led the round and was joined by investors including Leaders Fund, The House Fund, and individual investors.
- Omnibiz, a Nigeria-based ecommerce platform that helps businesses digitize their supply chains, raised $3 million in seed funding. V&R Africa, Timon Capital, and Tangerine Insurance led the round and were joined by investors including Lofty Inc., Musha Ventures, Sunu Capital, Launch Africa, and Rising Tide Africa.
- TeamGenius, a Minneapolis, Minn.-based youth sports player development software provider, raised $1.1 million in seed funding led by Great North Ventures.
PRIVATE EQUITY
- Consero Global, backed by BV Investment Partners, acquired the assets of Positive Venture Group, a Canada-based financial services outsourcing provider. Financial terms weren’t disclosed.
- Right Time, owned by Gryphon Investors, acquired Anchor Home Comfort, an Ontario-based residential HVAC services provider. Financial terms weren’t disclosed.
- HCAP Partners invested in Myndshft, a Mesa, Ariz.-based real-time medical prior authorization, eligibility and benefits verification service provider. Financial terms weren’t disclosed.
- Integrated Polymer Solutions, owned by Arcline Investment Management, acquired Seal Science, an Irvine, Calif.-based fabric and rubber aircraft seal engineering and manufacturing company. Financial terms weren’t disclosed.
- Varicent, owned by Great Hill Partners and Spectrum Equity, acquired Concert Finance, a New York-based commission software developer to increase sales productivity. Financial terms weren’t disclosed.
- Charter Health Care Group, owned by Pharos Capital Group, acquired Generations Hospice Care, a San Antonio, Texas-based hospice services provider. Financial terms weren’t disclosed.
- GovSpend, a portfolio company of Thompson Street Capital Partners and Endicott Growth Equity Partners, acquired Fedmine, a Rockville, Md.-based government contracting data firm. Financial terms weren’t disclosed.
EXIT
- Robinhood agreed to acquire Say Technologies, a New York-based communication platform for shareholders to manage their ownership rights, for $140 million in cash. Say is backed by investors including Point72 Ventures.
- The Jordan Company, Goldman Sachs Asset Management’s infrastructure business, and Stonepeak Partners sold their stakes in Vertical Bridge Holdings, a Boca Raton, Fla.-based communication infrastructure and towers company. Financial terms weren’t disclosed.
- DroneDeploy acquired Rocos, a New Zealand-based software company that manages and controls robot operations. Investors in Rocos include Icehouse Ventures. Financial terms weren’t disclosed.
- Litera, backed by Hg, agreed to acquire Kira Systems, a Toronto-based software that reviews and analyzes contracts using machine learning, backed by Insight Partners. Insight Partners will invest in Litera as part of the deal.
- StatLab Medical Products, owned by Audax Private Equity and Linden Capital Partners, acquired Pyramid Innovation, a U.K.-based slide and cassette printer maker used in pathology. Financial terms weren’t disclosed.
OTHER
- NortonLifeLock agreed to acquire Avast, a Prague-based cybersecurity software firm, for up to $8.6 billion in cash and shares.
- Carrefour is reportedly planning to sell its Taiwan business, valued at roughly €1.6 billion ($1.9 billion), Reuters reports citing sources.
- Paymentus Holdings (NYSE:PAY) agreed to acquire Payveris, a Cromwell, Conn.-based cloud payments and money transfers platform for financial institutions, for roughly $152.2 million in cash and common stock.
- TechnoPro agreed to acquire Robosoft Technologies, an India-based digital product design and solutions provider, for $108 million.
- CropX acquired Dacom Farm Intelligence, a Netherlands-based firm that optimizes farming using software and hardware. Financial terms weren’t disclosed.
- AT&T’s WarnerMedia is reportedly in talks to sell TMZ to Fox, The Information reported citing sources.
IPO
- Weave, a Lehi, Utah-based remote business software company, is exploring an IPO, per Bloomberg.
- Oyo Hotels & Rooms, a budget hotel marketplace in India, has selected investment bankers for an IPO, according to Reuters.
SPAC
- HotelPlanner and Reservations.com, two Florida-based hotel booking companies , will merge and go public via a three-way merger with Astrea Acquisition Corp., a SPAC. A deal gives the company an implied equity market capitalization of $687.9 million.
- GaN Systems, a Canada-based power management device company, is in talks to go public via a merger with Ross Acquisition Corp. II, a SPAC led by former U.S. Secretary of Commerce Wilbur Ross, according to Bloomberg.
