Why the autopsy of Zoom’s dead $14.7 billion deal matters

DEAD DEAL: Video conferencing software maker Zoom agreed to acquire cloud contact company Five9 earlier this year for $14.7 billion. It would have been an important expansion for Zoom amid concerns that return-to-work could cloud the company’s prospect—but Five9 shareholders rejected the deal on Thursday and said the deal had been “terminated by mutual agreement.” That comes as U.S. regulators have questioned Zoom over perceived ties to China: CEO Eric Yuan is a naturalized American citizen born in China. Meanwhile, last year, the company stored encryption keys on servers in the latter nation. But this was all known before the deal was announced.

A slump in Zoom shares may have played a more important role. Shares of the company—which would’ve been used to pay the $14.7 billion—are down 23% since the deal was announced. Under the deal terms, Five9 shareholders would have received 0.5533 shares of Zoom’s Class A shares per share owned. Which by a rough, back-of-the-envelope calculation, would mean Five9 would be valued at about $11.3 billion today instead. Why the deal died matters because it points to the potential waning M&A buying power of the so-called pandemic-boosted stocks.

MARC LASRY IS OUT OF OZY: About three weeks after announcing he would be its chairman, billionaire Marc Lasry is stepping down from the board amid a hurricane of fraud allegations against OZY. “I believe that going forward, OZY requires experience in areas like crisis management and investigations, where I do not have particular expertise,” he wrote.

A NEW FRONTIER OF TOXIC CULTURE: Jeff Bezos’ Blue Origin has been accused of a toxic, sexist culture by former and current employees. “If this company’s culture and work environment are a template for the future Jeff Bezos envisions, we are headed in a direction that reflects the worst of the world we live in now,” the 21-strong group wrote in a public letter. Read more.

KATHERINE BOYLE HEADS TO A16Z: If we were to have a startup meme-off for 2021, the “Tiger Global is investing in everything” trope and “a16z is hiring everybody” joke would be finalists. This morning, a16z announced that it had hired Katherine Boyle as a general partner from General Catalyst. Readers of this newsletter will remember that Boyle started up a new focus on civic tech—areas where the government is falling short—while there.

JOIN US: Fortune is hosting its annual Brainstorm Tech conference in person from Nov. 30 to Dec. 01 at Half Moon Bay, Calif. Among the starry list of attendees: Verizon CEO Hands Vestberg as 5G internet becomes a necessity; Intel CEO Pat Gelsinger at a time of chip shortages; recently SPAC-ed Grab’s President, Ming Maa; and NBA legend Dwyane Wade as sports stars rise in the realm of business.  Apply to join those names along with our guest co-chairs, GV Partner Terri Burns and Qualtrics Founder Ryan Smith. I’m looking forward to 💃seeing 💃you (and being surprised by your height) 💃there💃.

Lucinda Shen
Twitter: @shenlucinda
Email: lucinda.shen@fortune.com

Jessica Mathews compiled the IPO and SPAC sections of this newsletter.

VENTURE DEALS

- Ola Electric, an Indian electric vehicle maker, raised $200 million valuing it at $3 billion. Falcon Edge Capital led the round. 

- AlphaSense, a New York City-based financial data search company, raised $180 million in Series C funding. Investors included Viking Global and Goldman Sachs Asset Management.

- PSPDFkit, an Austria-based provider of APIs for document collaboration, raised €100 million ($116 million). Insight Partners invested.

- Alloy, a maker of an operating system for banks and fintechs, raised $100 million in Series C funding at a near $1.4 billion valuation. Lightspeed Venture Partners led the round and were joined by investors including Canapi Ventures, Bessemer Venture Partners, Avid Ventures, and Felicis Ventures.

- TransferGo, a London-based money transfer company, raised $50 million in Series C funding. Elbrus Capital Fund III and Black River Ventures led the round.

- Speedata, an Israel-based big data analytics company, raised $55 million in Series A funding. Investors included Walden Catalyst Ventures, 83North, and Koch Disruptive Technologies as well as Pitango First and Viola Ventures.

- Reachdesk, a London-based corporate gifting company, raised $43 million in Series B funding. Highland Europe led the round and was joined by investors including Highland Capital, HubSpot Ventures, and RLC Ventures. 

- Catalog, a Boston-based maker of a data storage process using DNA, raised $35 million in Series B funding. Hanwha Impact led the round and was joined by investors including Horizons Ventures.

- Zero Hash, a Chicago-based digital asset and rewards company, raised $35 million in Series C funding. Point72 Ventures led the round and was joined by investors including NYCA Partners and DriveWealth.

- LeadIQ, a San Francisco-based lead and sales prospecting company, raised $30 million in Series B funding. Cathay Innovation led the round and was joined by investors including  Eight Roads Ventures, Alumni Ventures, LAUNCH Fund, Draper Associates, Fresco Capital, and Strong Ventures.

- Forta, a remote-work decentralized security network from OpenZeppelin, raised $23 million. Andreessen Horowitz led the round and was joined by investors including Blockchain Capital, Coinbase Ventures, Placeholder, Blueyard, True Ventures, DCG, and SBC 10x.

- Higo, a Mexico City-based business-focused payments company, raised $23 million in Series A funding. Accel led the round and was joined by investors including Tiger Global Management, Haystack, Homebrew, Audacious, Susa Ventures, and J Ventures. 

- BluSmart, an Indian EV ride-hailing company, raised $25 million in Series A funding. bp ventures led the round and was joined by investors including Mayfield India Fund, 9Unicorns, and Survam Partners.

- SecZetta, a Fall River, Mass.-based provider of identity risk solutions, raised $20.5 million in Series B funding. SYN Ventures led the round and was joined by investors including MassMutual Ventures. 

- Parade, a New York City-based underwear brand raised $20 million in Series B funding. Stripes led the round.

Heyflow, a German no-code startup, raised $6 million in seed funding. Project A Ventures led the round.

- Profian, a U.K.-based data security startup, raised $5 million in seed funding. Project A Ventures and Illuminate Financial led the round.

- incident.io, a London-based issue resolution app for Slack, raised $4.7 million in seed funding. Index Ventures and Point Nine led the round.

PRIVATE EQUITY

- 424 Capital made a majority investment in Health Perspectives Group, a Seattle-based healthcare tech business. Financial terms weren't disclosed.

- Artlin Consulting, backed by Enlightenment Capital, merged with Sehlke Consulting, an Arlington, Va.-based consulting company, forming Aeyon. Financial terms weren't disclosed.

- AE Industrial Partners acquired HealthWay, a New York City-based air purification company. Financial terms weren't disclosed.

- Bernhard Capital Partners Management agreed to acquire RailWorks, a New York City-based rail infrastructure company, from Wind Point Partners. Financial terms weren't disclosed.

- Vertellus, backed by Pritzker Private Capital, acquired certain businesses of Chemtrade Logistics Income Fund (TSX: CHE.UN), a maker of specialty ingredients in the healthcare and pharmaceutical sectors. Financial terms weren't disclosed.

- Perforce Software, backed by Clearlake Capital Group and Francisco Partners, agreed to acquire the BlazeMeter Continuous Testing platform from Broadcom (NASDAQ: AVGO). Financial terms weren't disclosed.

- KKR will acquire a majority stake in Probe CX, an Australia-based customer experience company. Quadrant Private Equity and Five V Capital will retain a stake. Financial terms weren't disclosed.

EXITS

- Bernhard Capital Partners Management will acquire RailWorks, a New York City-based railroad infrastructure company, from Wind Point Partners. Financial terms weren't disclosed.

OTHERS

- Merck & Co. agreed to acquire Acceleron Pharma, a rare diseases company, for about $11.5 billion.

- Franklin Resources (NYSE: BEN) will acquire O’Shaughnessy Asset Management, a Stamford, Ct-based asset manager with $6.4 billion in assets under management. Financial terms weren't disclosed.

IPO

- Oyo Hotels & Rooms, a budget hotel marketplace in India, filed preliminary documents for an IPO in the country that would raise $1.1 billion, according to Bloomberg. SoftBank, Microsoft, and Airbnb back the firm.

- TDCX, a Singapore-based digital customer experience solutions company, raised $348 million in an offering of 19 million ADSs priced at $18 per ADS. The company posted $323.4 million in revenue in 2020 and $64 million in profit. 

- Exscientia, a British drug development pharmatech company, raised $305 million in an offering of 14 million ADSs priced at $22 per ADS.

- First Watch Restaurant Group, a Bradenton, Fla.-based breakfast and lunch restaurant chain, raised $170 million in an offering of 9 million shares priced at $18 per share. The company reported $342 million in total revenue in 2020 and a total comprehensive loss of $50 million. Advent International backs the firm.

- IsoPlexis Corporation, a Branford, Conn.-based disease detection company, plans to raise up to $133 million in an offering of 8 million shares priced between $14 and $16 per share. The company generated gross profit of $5.4 million in 2020 and reported a net loss of $23.3 million. BlackRock, Danaher, and Northpond Ventures back the firm.

- Virgin Atlantic, a U.K.-based airline, is delaying an IPO in London until early 2022, per Reuters.

- LELO, a Swedish sex toy company, is weighing an IPO in London that could value the company at around $1.4 billion, per Bloomberg.

F+FS

- AlleyCorp, a New York City-based healthcare fund and incubator, will deploy $100 million to NYC-based digital health startups. 

- Benhamou Global Ventures, a San Francisco-based venture firm focused on cross-border funding enterprise companies, raised $110 million for its fourth fund.

- Energize Ventures, a Chicago-based venture capital firm, raised $330 million for its second fund.

PEOPLE

- Benchmark, a San Francisco-based venture investor, named Jason Droege as a venture partner. 

- EQT, a New York City-based alternative investor, named Tetsuro Onitsuka as Head of EQT Private Equity Japan.