Term Sheet — Wednesday, September 26

September 26, 2018

THE UNRAVELING

Good morning, Term Sheet readers.

Social Capital continues to unravel. Founder Chamath Palihapitiya has laid off six people from his Palo Alto-based firm, according to a Business Insider report. They include partners Adam Nelson, Ashley Carroll, Sandhya Venkatachalam and Kristin Baker Spohn, senior associate of growth Kiel Zsitvay and head of communications Kira McCroden.

The departures make sense given that Social Capital is no longer a venture firm but rather a “technology holding company.” Palihapitiya tweeted yesterday that: “Now that we are a holding company and operate on permanent capital, I will be publishing @socialcapital returns. The format will be similar to Berkshire’s annual letters. I will publish this each year end but will try to do an interim one around Oct 1.”

Stay tuned.

STRONG RETURNS: In case you’re curious how the world’s wealthiest families plan to allocate their money, a new report has the answers. A survey of 311 family offices found that they plan to allocate more money to private equity after the asset class helped drive an average 15.5% rise in the value of their investments in 2017.

For 2018, the family offices expected their direct venture capital and private equity investments to deliver the best returns, of 13%, followed by private equity funds, at 11%, and direct real estate investments, at 8.4%.

“Family offices have delivered their strongest returns since we began measuring their performance five years ago,” said Sara Ferrari, head of UBS’ Global Family Office Group. “This reflects the bull market, as well as family offices’ ability to take a long-term approach and embrace illiquidity.” Read more.

GLOBAL STRATEGY: Fortune released its international edition of the Most Powerful Women list this morning, featuring female executives based outside the U.S. Topping the ranking this year is a new No. 1: Emma Walmsley, CEO of GlaxoSmithKline.

Fortune profiled Walmsley in a new feature about her ambitious plan to revive GSK, a 300-year-old drugmaker. She’s the only woman to run one of the large innovative drugmakers, and she’s doing it from the point of view of a pharma outsider, having spent 17 years at L’Oreal before joining GSK in 2010 to run its consumer health care business.

Since taking charge in April 2017, Walmsley replaced 40% of her top managers, pulled the plug on 30 drug development programs and 130 brands, and sold off the rare-disease unit. “The way I define the job is, firstly, in setting strategy for the company, and then leading the allocation of capital to that strategy—because until you put the money where you say your strategy is, it’s not your strategy,” she said.

Read the full profile here.

LET’S MEET: I’m moderating a panel tomorrow about what entrepreneurs should consider before raising their next round of capital. If you’re based in New York, come by (it’s free!). Register here.

VENTURE DEALS

• Forter, a New York-based e-commerce fraud prevention company that protects merchants during each stage of the customer lifecycle in real-time, raised $50 million in Series D funding. March Capital Partners led the round, and was joined by investors including Salesforce Ventures, Sequoia Capital, New Enterprise Associates, and Scale Venture Partners.

• IDx, an Iowa-based developer of an autonomous AI to detect eye disease, raised $33 million in Series A funding. 8VC led the round, and was joined by investors including Optum Ventures, Alpha Edison and Heritage Provider Network.

• Maven, a New York-based virtual clinic dedicated to women’s and family health, raised $27 million in Series B funding. Sequoia Capital and Oak HC/FT led the round.

• Snyk, a U.K.-based cybersecurity startup, raised $22 million in Series B funding. Accel led the round, and was joined by investors including GV, Boldstart Ventures and Heavybit.

• data.world, an Austin, Texas-based platform for modern data teamwork, raised $12 million in funding. Investors include Workday Ventures, The Associated Press, and OurCrowd.

• Silicon Line GmbH, a Germany-based developer of ultra-low-power optical link technology, raised €8.2 ($9.5 million) in Series B funding. Capital-E led the round.

• Proscia, a Haverford, Penn.-based developer of digital pathology, raised $8.3 million in Series A funding. Investors include Flybridge Capital Partners, Emerald Development Managers, Fusion Fund, Razor’s Edge Ventures, and RobinHood Ventures.

• Plant Prefab, a Rialto, Calif.-based home design and prefabrication company, raised $6.7 million in Series A funding. Investors include Obvious Ventures and the Amazon Alexa Fund.

• BrandTotal, a New York and Tel Aviv-based marketing platform, raised $6 million in Series A funding. Flint Capital led the round.

• Luciole Medical AG, a Switzerland-based developer of a platform of brain monitoring devices, raised 4.7 million euros ($5.5 million) in Series A funding. SVC Ltd led the round, and was joined by investors including Blue Ocean Ventures.

• Bitwala, a Germany-based blockchain banking service, raised more than 4 million euros ($4.7 million) in funding. Investors include Earlybird and coparion.

• Taxfyle, a Coral Gables, Fla.-based on-demand licensed accounting platform, raised $4.1 million in Series A funding. Rokk3r Fuel ExO led the round, and was joined by investors including Ocean Azul Partners.

• MouSensor Inc, a New York City-based early-stage biotech startup, raised $3.3 million in seed funding. Investors include imec.xpand and Alexandria Venture Investments.

• Mode, a San Mateo, Calif.-based data startup, raised $3 million in Series A funding. True Ventures led the round.

• Edge Intelligence, a developer of an analytics platform, raised $3 million in seed funding. Talis Capital led the round.

• Kobiton, an Atlanta-based mobile app testing company, raised $3 million in seed funding. Kinetic Ventures led the round, and was joined by investors including KMS Technology and Service Provider Capital.

• Dutchie, a Bend, Ore.-based online ordering platform for cannabis pickup and delivery, raised $3 million in seed funding. Casa Verde Capital led the round, and was joined by investors including the Durant Company, early DoorDash executives and Sinai Ventures.

HEALTH AND LIFE SCIENCES DEALS

• Morphic Therapeutic, a Waltham, Mass.-based biotechnology company developing oral integrin therapies, raised $80 million in Series B funding. Omega Funds and Novo Holdings co-led the round, and was joined by investors including Invus and EcoR1 Capital.

• Lyra Therapeutics, Inc., a clinical-stage biotechnology company developing medicines designed to target ear, nose and throat diseases, raised $29.5 million in Series B funding. Perceptive Advisors led the round, and was joined by investors including RA Capital Management, ArrowMark Partners, Soleus Capital, Polaris Venture Partners, North Bridge Venture Partners and Intersouth Partners.

• Minoryx Therapeutics, a Spain-based biotechnology company, raised 21.3 million euros ($25 million) in Series B funding. Fund+ led the round, and was joined by investors including SFPI, S.R.I.W, Sambrinvest, Ysios Capital, Kurma Partners, Roche Venture Fund, Idinvest Partners, Chiesi Ventures, Caixa Capital Risc and HealthEquity.

• Cytek Biosciences Inc, a Fremont, Calif.-based provider of innovative flow cytometry solutions, raised Series C funding of an undisclosed amount. Northern Light Venture Capital and 3E Bioventures co-led the round.

PRIVATE EQUITY DEALS

• Tecum Equity recapitalized Tidewater Equipment Company, a Brunswick, Ga.-based distributor of forestry and related equipment. Financial terms weren’t disclosed.

• AMTdirect LLC, which is backed by Luminate Capital Partners, acquired NETfacilities Inc, a Los Angeles-based provider of facilities management software. Financial terms weren’t disclosed.

• Monogram Capital Partners invested $10 million in Country Archer Jerky Co, a San Berdino, Calif.-based producer of gourmet jerky, meat sticks, and meat bars.

• Inspire Brands Inc, a portfolio company of Roark Capital, agreed to buy Sonic Corp (Nasdaq:SONC) for $43.50 a share or about $2.3 billion, including debt. Sonic owns more than 3,600 drive-ins.

• Investors including Blackstone Group and Carlyle Group are interested in Nielsen Holdings Plc (NYSE:NLSN), which is considering a sale, according to Bloomberg. Read more.

• Carlyle Group is looking to sell Athena Art Finance Corp, a New York-based specialty finance company, according to Bloomberg. Read more.

IPOs

• SurveyMonkey, a San Mateo, Calif.-based survey platform, raised $180 million in an IPO of 15 million shares priced between $9 to $11, an upsized offering. It posted revenue of $218.8 million in 2017 and loss of $24 million. Tiger Global (29.9% pre-offering) and Sheryl Sandberg (9.9%) back the firm. J.P. Morgan, Allen & Company, BofA Merrill Lynch, Credit Suisse, UBS Investment Bank, and Wells Fargo Securities are underwriters. It plans to list on the Nasdaq as “SVMK.” Read more.

• Entasis Therapeutics, a Waltham, Mass.-based developer of treatments for multi-drug resistant bacteria, raised $75 million in an IPO of 5 million shares priced at $15, an upsized offering below its $16 to $18 range. It did not post a revenue for 2017, and posted loss of $29.9 million. AstraZeneca (21.6% pre-offering), Clarus Ventures (14.7%), and Novo Holdings (13.7%) back the company. It plans to list on the Nasdaq as “ETTX.” Read more.

• Viomi Technology, a Guangdong, China-based maker of smart home appliances, raised $103 million in an IPO of 11.4 million shares at $9 apiece, the low end of its range. It posted revenue of $132 million and earnings of $14.1 million in 2017. Xiaomi backs the firm. Morgan Stanley and CICC are underwriters. It plans to list on the Nasdaq as “VIOT.” Read more.

EXITS

• Grubhub agreed to acquire Tapingo, a Israeli-based provider of an on-campus food ordering platform, for $150 million. Tapingo had raised approximately $36 million in venture funding from investors including Khosla Ventures, Qualcomm Ventures, Viola Ventures and DCM Ventures.

• OpenGate Capital agreed to sell NAKAN, a France-based global PVC compounding solutions business, to Westlake Chemical Corporation, for $265 million.

• ArcLight Capital Partners sold North Sea Midstream Partners, a U.K.-based midstream infrastructure business, to the Kuwait Investment Authority. Financial terms weren’t disclosed.

• Meridian Adhesives Group, which is backed by Arsenal Capital Partners, acquired W.F. Taylor LLC, a Dalton, Ga.-based maker of performing floor adhesives, from Dominus Capital. Financial terms weren’t disclosed.

• Permira Funds and Spectrum Equity will acquire XO Group Inc (NYSE:XOXO) for $933 million and merge it with wedding planning group WeddingWire Inc. WeddingWire investors Permira Funds and Spectrum Equity will pay $35.00 per share in cash to XO shareholders, a 27% premium to the stock’s Monday close.