By Polina Marinova
December 18, 2017

UBER DRAMA

Good morning, Term Sheet readers.

Uber lived in the headlines in 2017. And this weekend was no exception. Fresh allegations of bribery, espionage, and hacking surfaced when a federal judge forced Uber to turn over a former employee’s letter. The 37-page letter describes how Uber hired people to spy on executives of overseas rivals, used undercover agents to impersonate taxi drivers, and scraped competitors’ information from the Internet. Sounds more like a James Bond movie than a Silicon Valley tech company.

If these allegations are proven true, it could result in regulatory sanctions, fines, and further criminal investigations. Not exactly just another bad press headache for Uber’s comms team.

MORE PREDICTIONS: Thank you to everyone who submitted their 2018 business predictions around everything from a bitcoin crash to increased consolidation and down rounds.

Here are several more that rolled in to my inbox that I thought were interesting:

• Following two lackluster years for IPOs, we should see the “unicorn backlog” of more than 200 venture-backed private companies start to clear out in 2018. Many of the high-growth software companies that have been transforming the tech industry since their founding have been waiting to capitalize until much longer than we’ve previously seen – although I expect this tide will start to turn by early Q2, and we should see many of these high quality companies reveal their financial strength to the public world. — Byron Deeter, a partner at Bessemer Venture Partners.

• With lots of competing low-earth satellites likely to be launched, the companies that hold the antennas and communication network infrastructure stand to win. — Josh Wolfe, co-founder and managing partner of Lux Capital.

• The outlook for the tech sector is strong for investors, companies and corporates because we expect VC fundraising will increase and be in the $35-40B range, VC investment will be consistent with 2017, late stage valuations will increase, CVC investment will increase, and M&A will be between 600-700 deals. — Greg Becker, CEO of Silicon Valley Bank.

• In 2017, blockchain projects raised hundreds of millions of dollars not with a product or traction, but with just an idea and some technical specifications. This level of speculation, however, is unsustainable. In 2018, we’ll see the dust settle around blockchain as adoption of the technology starts to become mainstream. In order for this to happen, though, blockchain will need to get a lot faster, processing power will need to get much cheaper, and storage costs will need to be sharply reduced. 2018 will see attempts to solve these major limitations. — Andy Vitus, partner at Scale Venture Partners.

But before we bid 2017 goodbye … Fortune this morning published the people, companies, trends, gadgets, hacks, and tweets that mattered most in 2017.

It was a year of data breaches, bitcoin swings, and Elon Musk quotes. See the full list here.


THE LATEST FROM FORTUNE...

• Can this man build a better Bitcoin? (by Robert Hackett)

• The entrenched origins of Harvey Weinstein (by Leigh Gallagher)

• Everything you need to know about Apple’s video ambitions (by Tom Huddleston)

• Elon Musk calls transit expert “an idiot” (by David Z. Morris)

…AND ELSEWHERE

Celebrity hologram startup 8i to lay off half its staff. Feds look to cash in seized bitcoins at record prices. Jerry Richardson announces plans to sell Carolina Panthers franchise after 2017.


VENTURE DEALS

Virgin Hyperloop One, a Los Angeles-based tubular transit system startup, agreed to raise $50 million in funding, according to Axios. Investors include Caspian Venture Capital and DP World. Read more.

Leadspace, a San Francisco and Tel Aviv-based B2B audience management platform for marketing and sales, raised $21 million in Series C funding. Arrowroot Capital and Jerusalem Venture Partners led the round.

Huddly, an Oslo, Norway-based developer of a easy-to-use video collaboration technology, raised $10 million in Series C funding. Graham Williams led the round.

Spotlite recently raised more than $10 million from Sequoia Capital China and BlueRun Ventures. The plan is to use the funding to build out the product, make key hires and expand its marketing and advertising efforts.

Univercells, a Belgium-based provider of biomanufacturing solutions, raised $3.56 million in Series A funding. The investors included Takeda Ventures Inc.

Aunt Fannie’s, a Portland-based CPG company focused on microbiomic cleaning products and pest solutions, raised $2.375 million in Series A. Investors include Monica Nassif, David Charne, and Stuart Erickson.

Reniac Inc, a San Jose, Calif.-based developer of intelligent data-aware architecture for applications, servers, and data stores, raised funding of an undisclosed amount from Intel Capital.


HEALTH AND LIFE SCIENCES DEALS

Ginkgo Bioworks, a Boston-based biotech company that designs custom microbes, raised  $275 million in Series D funding. Investors include Viking Global, Y Combinator’s Continuity Fund, Bill Gates’ Cascade Investment, and General Atlantic.

Aptinyx Inc., an Evanston, Ill.-based clinical-stage biopharmaceutical company developing transformative therapies for challenging neurologic disorders, raised $70 million in Series B funding. Bain Capital led the round, and was joined by investors including Adage Capital, Agent Capital, HBM Healthcare Investments, Nan Fung Life Sciences, Partner Fund Management and Rock Springs Capital.


PRIVATE EQUITY DEALS

ConvergeOne, a portfolio company of Clearlake Capital, acquired Alexander Open Systems , an Overland Park, Kansas-based IT consulting group. Financial terms weren’t disclosed.

Main Post Partners made an investment in Fortis Solutions Group, a Virginia Beach, Va.-based developer of printing, packaging, and labeling solutions. Financial terms weren’t disclosed.

alphabroder, a portfolio company of Littlejohn & Co., LLC, acquired Prime Line, a manufacturer and supplier of promotional products for more than three decades. Financial terms weren’t disclosed.

The Carlyle Group agreed to acquire Net Health, a provider of cloud-based clinical documentation, practice management, and billing solutions. Financial terms weren’t disclosed.


OTHER DEALS

KKR & Co. agreed to buy the world’s largest margarine business from Unilever plc for $8.06 billion. Unilever set an asking price of $8 billion, according to The New York Post. Read more.

TSYS agreed to acquire Cayan, a Boston, Mass.-based payment technology company, in an all cash transaction valued at approximately $1.05 billion.

Hershey agreed to buy Amplify Snack Brands, the owner of Tyrell’s potato chips and SkinnyPop popcorn for $921 million. Read more at Fortune.

Fireman Capital Partners and Dunn’s River Brands acquired the Sweet Leaf Tea and Tradewinds businesses from Nestlé Waters North America. Financial terms weren’t disclosed.

Aconex Ltd (ASX:ACX) received a A$1.56 billion ($1.2 billion), or A$7.80 in cash-per-share, buyout offer from Oracle Corp, sending the target’s share price up 45 percent. Read more.

Humana Inc. is in advanced talks to join with two private-equity firms in a deal to acquire home-care provider Kindred Healthcare Inc (NYSE:KND), according to The Wall Street Journal. The deal would value Kindred at $9 a share, and Kindred has an enterprise value of about $4 billion, including debt. Read more.


EXITS

Amazon is in advanced talks to acquire Sqrrl, a Massachusetts-based cybersecurity software company for north of $40 million, according to Axios. Sqrrl raised $26.5 million in venture funding from investors including Spring Lake Equity Partners, Matrix Partners, and Atlas Venture. Read more.

Beecken Petty O’Keefe & Company acquired Zenith American Solutions, a Tampa, Fla.-based third-party administrator of benefits to Taft-Hartley trust funds. The seller was Water Street Healthcare Partners. Financial terms weren’t disclosed.

Apollo Global agreed to acquire Sun Country Airlines, a Mendota Heights, Minn.-based independent airline. The sellers were Marty and Mitch Davis. Financial terms weren’t disclosed.


FIRMS + FUNDS

TPG Growth, a San Francisco-based middle market and growth equity platform of alternative asset firm TPG, raised $3.7 billion for its fourth fund, TPG Growth IV.

Warburg Pincus, a New York-based private equity firm focused on growth investing, raised $2.3 billion for its fund, Warburg Pincus Financial Sector, L.P.


PEOPLE

Shervin Pishevar resigned from Sherpa Capital.

Les Craig joined Next Frontier Capital as a partner.

Amy Burroughs joined 5AM Venture Management as an executive-in-residence.

Palladium Equity Partners promoted Luis Zaldivar and Caleb Clark to senior managing director and managing director, respectively. Palladium also hired Chris Allen as a principal.

Inoki Suarez joined The Carlyle Group as managing director.


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Polina Marinova produces Term Sheet, and Lucinda Shen compiles the IPO news. Send deal announcements to Polina here and IPO news to Lucinda here.

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