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Briefing: Toast Said To Prep IPO, Oscar Health Sets IPO Price Range, And More

Crunchbase News’ top picks of the news to stay current in the VC and startup world.

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Here’s what you need to know today in startup and venture news, updated by the Crunchbase News staff throughout the day to keep you in the know.

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Restaurant software unicorn Toast eyes IPO this year

Boston-based Toast, a provider of software for restaurant management, is in talks with underwriters about a potential IPO later this year, according a report in The Wall Street Journal citing unnamed sources.

Founded in 2011, Toast has raised $902 million in venture funding to date, per Crunchbase data, including a $400 million Series F round closed a year ago.

Toast is reportedly seeking a valuation of around $20 billion for its public offering, and has tapped Goldman Sachs and JPMorgan as potential underwriters. In its last funding round a year ago, the company secured a valuation of nearly $5 billion.

— Joanna Glasner

Oscar Health sets IPO price range

Health insurance company Oscar Health intends to offer 31 million shares, priced between $32 and $34 each, to raise as much as $1.05 billion in its initial public offering, according to a regulatory filing on Monday.

Oscar filed its S-1 registration document with the U.S. Securities and Exchange Commission on Feb. 5. The company reported more than $488 million in revenue in 2019, up by around 5 percent from about $463 million in 2018.

Its losses also shrunk in that period, from nearly $406 million in 2018 to around $261 million in 2019. The company has approximately 529,000 members across 18 states.

Oscar’s health insurance model includes free virtual care appointments and a program for Medicare-eligible adults.

The company, which was co-founded by Josh Kushner, founder of Thrive Capital, raised more than $1.6 billion in funding from investors including Founders Fund, Thrive Capital, CapitalG and Fidelity.

It is estimated that Oscar’s fully diluted valuation will be approximately $8 billion, Reuters reported.

— Christine Hall

Parallel to public via SPAC

Multi-state cannabis operator Parallel announced Monday it is going public via a merger with special purpose acquisition corporation Ceres Acquisition Corp., backed by entertainment entrepreneur Scott “Scooter” Braun, in a deal that values Atlanta-based Parallel at $1.884 billion.

SPACs, also known as blank-check companies, raise money in an initial public offering and then have two years to acquire a business or businesses.

The Parallel/Ceres transaction is expected to close in the summer, according to the company. At that time, Parallel’s chairman and CEO William “Beau” Wrigley Jr. will remain in the role.

The new company will have pro forma cash on hand of $430 million at close and is expected to generate $447 million in revenue in 2021. It intends to expand its cultivation and production in the U.S.

Since being founded in 2014, Parallel has raised a total of $355.7 million in known venture-backed funding, according to Crunchbase data. It most recently raised $100 million in Series D funding in 2019, led by Edward Brown.

— Christine Hall

Funding rounds

Ageras raises $73M for accounting tools: Copenhagen-based Ageras, an online platform for businesses to find accounting services, raised $73 million in fresh financing from Lugard Road Capital. Founded in 2012, Ageras sold a majority stake to Investcorp in 2017.

— Joanna Glasner

Orka lands $40.7M for shift worker platform: Manchester, U.K.-based Orka Technology Group, a provider of online tools to help with onboarding of hourly shift workers, including an option to withdraw money just after it is earned, raised £29 million ($40.7 million) in a mixture of debt financing from Sonovate and equity funding from the British Business Bank and other backers.

— Joanna Glasner

Fintech

EquityBee banks $20M: EquityBee, which helps startup employees get capital to exercise their stock options before they expire by linking them to investors, raised a $20 million Series A financing round, led by existing investor Group 11, to make additional hires across all departments and expand product offerings. The round brings the Palo Alto-based company’s total funding to more than $28 million, which includes a $6.6 million seed round in 2020, also led by Group 11. In addition to the stock options, EquityBee posts a quarterly pre-IPO “wish list” of companies its investors want to see have a liquidity event soon.

— Christine Hall

Babytech

Nanit inks $25M Series C: Nanit, developing smart baby monitor and sleep tracker devices, closed a $25 million Series C funding round led by new investor GV. The new round brings the New York-based company’s total capital raised to $75 million. Nanit last raised a $21 million Series B in 2020, according to Crunchbase data. Nanit’s proprietary line of Breathing Wear apparel integrates with the Nanit camera to enable parents to safely monitor their baby’s breathing motion without sensors or wires. In 2020, the company doubled its user base and yielded year over year revenue growth of more than 130 percent, the company said. Years ago, babytech was considered a niche market that few investors understood or wanted to get into. Today, anyone considering adding to their family can find technology for everything from fertility to potty training and beyond. Though the market is big, experts say there is still not enough investment in startups focused on the space. Forbes estimated in 2019 that the U.S. babytech market size was about $46 billion, and reported that investors had pumped some $500 million in funding into companies within the sector since 2013. One of the success stories is baby health monitor Owlet Baby Care, which announced on Feb. 16 its plans to merge with Sandbridge Acquisition Corp., a special purpose acquisition company backed by Sandbridge Capital and PIMCO private funds. Owlet raised a total of $48 million in known venture capital investments since the company was founded in 2013, according to Crunchbase data.

— Christine Hall

Illustration: Dom Guzman

Stay up to date with recent funding rounds, acquisitions, and more with the Crunchbase Daily.

Founded in 2011, Toast has raised $902 million in venture funding to date, per Crunchbase data, including a $400 million Series F round closed a year ago.

Source: https://news.crunchbase.com/news/briefing-2-22-21/

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Card Issuer Marqeta Valued At More Than $17B in Nasdaq Debut

Chief Marketing Officer Vidya Peters tells Crunchbase News that the IPO “has been a wonderful validation of the modern card issuing industry.”

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Shares of Marqeta, an Oakland-based modern card issuing platform, popped on the first day of trading Wednesday, closing at $30.52 per share, up 13 percent from opening price of $27. Marqeta is listed on the Nasdaq Global Select Market under the symbol MQ.

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Marqeta now has a market value of $17.3 billion, according to Yahoo, which is based on 586 million of outstanding shares.

The company filed in May to go public via an initial public offering. Since its inception in 2010 by Jason Gardner, Marqeta has raised a total of $528 million in known venture capital, according to Crunchbase data. Its last disclosed round in May 2020 valued the company at $4.3 billion.

Vidya Peters, chief marketing officer for Marqeta, told Crunchbase News that the IPO “has been a wonderful validation of the modern card issuing industry and what we have done over the last decade.”

She went on to say that there is a “massive $74 trillion market opportunity ahead of us, which provides an endless runway.”

And, as a payments infrastructure company, being publicly traded enables Marqeta to be transparent on its financial health to stakeholders and customers.

“It also provides a massive arsenal to accelerate our product roadmap and fuel our global expansion,” Peters added. “We are already in 36 countries and now we can accelerate even faster.”

To complement prepaid and debit card offerings, in the past year Marqeta added credit, which Peters touted as being the first company to offer all three.

She also believes this is just the start for what Marqeta can enable with innovative offerings, such as open APIs so that developers can build their own card-issuing products.

“Marqeta is just scratching the surface with cards,” Peters added. “Imagine being able to have your check deposited onto your card, buy now, pay later, peer-to-peer payments and even monetize your cryptocurrency. The possibilities are endless, and in our next chapter we are in a position to unlock all of that with our card types.”

Among the S-1 statement disclosures, Marqeta touts customers, such as Affirm, DoorDash, Instacart, Klarna and Square, which it reported was its largest customer, accounting for 70 percent of its net revenue in 2020.

It reported $350 million in fourth-quarter 2020 annualized net revenue, operates in 36 countries, and has issued more than 320 million debit, credit and prepaid cards to date.

The company reported $107.9 million in revenue for the first quarter ended March 30, 2021, more than double from the same three-month period in 2020. It narrowed its net loss to $12.8 million during the quarter from $14.5 million last year.

Prominent backers include 83North II, Coatue, ICONIQ Capital, Granite Ventures and Discover Financial Services, according to its filings. With the exception of Discover, all of the remaining entities led investments into the company, according to Crunchbase data.

Illustration: Li-Anne Dias

Stay up to date with recent funding rounds, acquisitions, and more with the Crunchbase Daily.

The company filed in May to go public via an initial public offering. Since its inception in 2010 by Jason Gardner, Marqeta has raised a total of $528 million in known venture capital, according to Crunchbase data. Its last disclosed round in May 2020 valued the company at $4.3 billion.

Source: https://news.crunchbase.com/news/card-issuer-marqeta-begins-trading/

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ID Verification Company Clear Files To Go Public As Travel Picks Up

If you’ve walked through security at a major airport in the United States, you’ve likely seen signage for Clear, which allows enrolled members to pass through a security checkpoint quickly by scanning their eyes and face.

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Clear, the company known for using biometric data to verify identities, has filed to go public.

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If you’ve walked through security at a major airport in the United States, you’ve likely seen signage for Clear, which allows enrolled members to pass through a security checkpoint quickly by scanning their eyes and face.

While it’s perhaps best known for its airport usage (investors in the company include United Airlines and Delta Air Lines), Clear is also used for identity verification and security at live events. The New York-based company reported having 5.6 million cumulative enrollments. Clear is available in 38 airport locations and works with 26 sports and entertainment partners, according to the company.

Among the largest stockholders in the company are Delta Air Lines, General Atlantic, and T. Rowe Price.

Clear is heavily reliant on travel and live events, both of which were essentially put on pause during the COVID-19 pandemic. But even though travel and live events took a hit, Clear still grew its memberships and revenue, and brought down its losses, according to its S-1.

The company reported nearly $230.8 million in revenue last year, up 20 percent from $192.3 million in 2019. Though the company’s total bookings declined 10.6 percent from 2019 to 2020, its net losses shrunk down from $54.2 million in 2019 to $9.3 million in 2020.

The company acknowledged in the “Risk Factors” section that the pandemic limited its growth in airports, the entertainment industry, and events.

“We experienced a decrease in enrollments for our airport service and a decrease in membership renewals,” the company wrote. “In fiscal year 2020, our Annual CLEAR Plus Net Member Retention declined to 78.8% (compared to 86.2% in fiscal year 2019). We expect that COVID-19 will continue to adversely impact our airport enrollments and business in 2021 and possibly beyond.”

Clear also acknowledged that its performance is dependent on the strength of the travel industry, since it “derived substantially all of our historical revenue from members who enroll in CLEAR Plus, which includes our Registered Traveler Program service at U.S. airports, and one of our growth strategies is to continue expanding in our domestic aviation network.”

Goldman Sachs and JP Morgan are among the underwriters for the IPO. The company intends to list on the New York Stock Exchange under the ticker YOU.

Illustration: Dom Guzman

Stay up to date with recent funding rounds, acquisitions, and more with the Crunchbase Daily.

Source: https://news.crunchbase.com/news/id-verification-company-clear-files-to-go-public-as-travel-picks-up/

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Exclusive: Women’s Supplement Startup Rae Wellness Closes $9.5M Series A

Rae develops supplements targeting women’s well-being in sexual, hormonal and mental health.

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Minneapolis-based Rae Wellness got a cash infusion of $9.5 million in Series A funding to continue developing its supplements targeting women’s well-being in sexual, hormonal and mental health.

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PowerPlant Partners led the round and was joined by M13, Able Partners and Victress Capital. Co-founder and CEO Angie Tebbe founded the company in 2019. She did not disclose the company’s total funding to date.

Three years ago, Tebbe was a Target executive with two toddlers when she noticed that her own well-being was not a priority.

“I thought about what wellness meant to me,” she told Crunchbase News. “I grew up in a holistic household and wanted an opportunity to honor that. I left my career to pursue my own well-being and take better care of myself.”

A believer in the power of supplements, she went in search of the right ones for her. During that diligence, she found that either quality products did not exist — many were sugary and gummy — or they were very expensive. That’s where Tebbe said she saw whitespace to create products.

Rae Wellness started out as direct-to-consumer in 2019, but by 2020 was on shelves in Target stores and selling on Amazon. It is also available in Anthropologie and will be in Thrive Market and other retailers later this year, she said.

“We’ve been ramping up fast — it’s a crazy dream come true,” Tebbe added. “We needed a big infusion to get to the scale we want, which includes creating an omnichannel brand.”

The company is going after the global dietary supplement market, which was valued at $140.3 billion in 2020, and is expected to grow at an 8.6 percent compound annual rate from 2021 to 2028, according to market research firm Grand View Research.

In the first year of business, Rae Wellness reached 1 million customers, and Tebbe said the company is poised for triple-digit growth this year. As such, the new funding will go toward that growth of reach, brand awareness and partnerships.

“We are thrilled to see women are putting themselves on the priority list,” she said. “We are continuing the journey to create pure and powerful supplements to support women’s journey to feel better.”

Dan Gluck, partner at PowerPlant Partners, said his firm is tracking the supplement category and that the opportunity is huge, with the U.S. market forecasted to be $50 billion by 2024, as more adults take dietary supplements.

With the increasing concern around health and wellness and clean beauty, companies like Rae Wellness have an opportunity to take market share, he added. By focusing on clean and green brands and ingredients that come at accessible price points, Gluck said Rae is resonating with customers.

“From Angie’s experience as a Target executive, she has an insight that most entrepreneurs don’t have,” Gluck said. “We also loved her vision, passion and enthusiasm, as well as her rationale around building the business into a world-class organization.”

Illustration: Dom Guzman

Stay up to date with recent funding rounds, acquisitions, and more with the Crunchbase Daily.

“I thought about what wellness meant to me,” she told Crunchbase News. “I grew up in a holistic household and wanted an opportunity to honor that. I left my career to pursue my own well-being and take better care of myself.”

Source: https://news.crunchbase.com/news/exclusive-supplement-startup-rae-wellness-closes-9-5m-series-a/

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