Term Sheet — Wednesday, May 8

THE $1 BILLION LOSS

2019 will be Lyft’s “peak loss year.” The ride-hailing giant has issued its first results as a public company, showing both strong growth and widening losses.

Lyft posted a loss of $1.14 billion for the first quarter, compared with a loss of $234.3 million in the same period last year. It attributed much of the loss to stock-based compensation and other expenses connected to its IPO. Excluding those costs, the company’s net loss for the quarter totaled $211.5 million, compared to $234.3 million in the same period last year.

On the bright side, Lyft managed to increase revenue to $776 million for the quarter, which is a 95% increase from the year prior. This performance is above the $739 million that Wall Street had predicted.

Lyft CFO Brian Roberts said the company sees “a path to profitability” in its core ride-sharing business. But he added, “We anticipate that 2019 will be our peak loss year.”

Asad Hussain, an investment analyst at PitchBook Data, said the following to Term Sheet:

“Lyft reported strong revenue and ridership growth as it continues to gain share over Uber domestically. On the follow up call with investors, management was optimistic about the competitive landscape, calling out a more rational pricing environment going forward, which we view as a positive indicator for eventual profitability. However, Lyft withdrew providing gross bookings data, which complicates the ability of investors to understand pricing trends. While markets usually don’t appreciate these kinds of data pull-backs, we would not be surprised if Uber makes a similar move.”

Hussain also noted that the company’s new partnership with Waymo will be “a win.” ICYMI, Lyft announced yesterday that it was partnering with Waymo, the Alphabet subsidiary working on self-driving cars, to bring a small fleet of autonomous vehicles to the Lyft platform in Phoenix. In the next few months, Lyft customers in Phoenix will have the option to hail a ride from 10 self-driving cars when they are available.

The bottom line is that Lyft’s earnings report is raising some serious questions about just how long it can engage in a price war with its rivals. The challenge won’t be winning the price war — it will be proving to investors that ride-hailing can be a profitable, sustainable business in the long-run. At some point, the clock will run out and investors won’t be so willing to give Uber and Lyft the benefit of the doubt anymore.

THE UNICORN HUNTERS: Which investors have backed the most billion-dollar companies? In a new report, CB Insights gives us a look at who’s behind the existing 344 “unicorns,” private companies valued at more than $1 billion.

Here are some interesting takeaways:

Tiger Global Management has the most unicorn companies in its portfolio (42). It is closely followed by Tencent Holdings (40), and SoftBank (38).

SoftBank’s unicorn portfolio has the highest cumulative valuation at $389 billion — that’s 45% more than Tiger Global Management, and more than double Tencent Holdings’ cumulative unicorn valuation.

Sequoia Capital has backed the most deals to unicorns (99).

SV Angel has made the most early-stage investments in $1B+ companies (18). SV Angel has retained its #1 spot since CB Insights’ last analysis February 2017, while Sequoia Capital has slipped in rankings from second to fourth place. Y Combinator and Sequoia Capital China round out the top 3 early-stage investors.

— There are now 143 institutional investors with at least 5 unicorns in their portfolio, up from 76 such investors in February 2017.

See the full report here.

KLEINER’S NEW GUARD: Ilya Fushman joined venture firm Kleiner Perkins from Index Ventures a little more than a year ago as a general partner. As I mentioned in my recent Kleiner story, the new team at Kleiner is now focused on making early-stage investments and being more transparent about the firm’s performance.

Fushman held a Q&A session on Quora yesterday where he answered questions such as, “What are your three main criteria you look at when investing in a startup?” and “What are the most promising areas of tech investing right now?” I encourage you to read through his answers for insight into how he thinks about deals and what key qualities he’s looking for in founders.

VENTURE DEALS

[ts_bullet_primary] Megvii Inc, commonly known as Face++, a China-based artificial intelligence provider, raised $750 million in funding at a $4 billion+ valuation, according to Reuters. Bank of China Group Investment led the round, and was joined by investors including Macquarie Group, ICBC Asset Management Co and a wholly-owned subsidiary of the Abu Dhabi Investment Authority.

[ts_bullet_primary] Altiostar, a company focused on open virtualized RAN (open vRAN) technology, raised $114 million in Series C funding. Investors include Rakuten, Qualcomm Ventures LLC and Tech Mahindra.

[ts_bullet_primary] Sumo Logic, a Redwood City, Calif.-based cloud-native, machine data analytics platform, raised $110 million in funding at a valuation of more than $1 billion. Battery Ventures led the round, and was joined by investors including Tiger Global Management and Franklin Templeton.

[ts_bullet_primary] VTS, a New York-based commercial real estate leasing and asset management platform, raised $90 million in Series D funding. Brookfield Ventures led the round, and was joined by investors including GLP, Tishman Speyer, and Fifth Wall.

[ts_bullet_primary] Heetch, a Paris-based ride-sharing platform, raised $38 million in Series B funding. Investors include Cathay Innovation, Total Ventures, Idinvest Partners, Innov’Allianz, Alven, Felix Capital, and Via-ID.

[ts_bullet_primary] Aiven, a Helsinki, Finland-based cloud data platform provider, raised 8 million euros ($8.9 million) in Series A funding. Earlybird Venture Capital led the round, and was joined by investors including Lifeline Ventures and Nokia Chairman Risto Siilasmaa.

[ts_bullet_primary] MedCrypt, a San Diego-based medical device cybersecurity startup, raised $5.3 million in Series A funding. Section 32 led the round, and was joined by investors including Y Combinator and Eniac Ventures.

[ts_bullet_primary] Astarte Medical, a Yardley, Penn.-based precision medicine company using software and predictive analytics to improve premature infant outcomes, raised $5 million in Series A funding. Investors include Viking Global Investors LP, Lunsford Capital, OCA Ventures, Keiretsu Forum MidAtlantic, Keiretsu Capital Fund, Ben Franklin Technology Partners, Wing VC and Next Act Fund.

[ts_bullet_primary] Journey Meditation, a New York-based creator of a group meditation app, raised $2.4 million in seed funding. Canaan led the round, and was joined by investors including Brooklyn Bridge Ventures, Betaworks, BDMI, The Fund, Nelstone Ventures and New York Venture Partners.

[ts_bullet_primary] Boardable, an Indianapolis-based online board management platform, raised $1 million in seed funding. The investor was High Alpha Capital.

 

HEALTH AND LIFE SCIENCES DEALS

[ts_bullet_primary] Verve Therapeutics, a Cambridge, Mass.-based cardiovascular company, raised $58.5 million in Series A funding. GV led the round, and was joined by investors including ARCH Venture Partners, F-Prime Capital and Biomatics Capital.

[ts_bullet_primary] Repair Biotechnologies Inc, a developer of clinic therapies that helps reduce age-related diseases, raised $2.15 million in seed funding. Jim Mellon, the billionaire investor and chairman of Juvenescence Ltd, led the round, and was joined by investors including Emerging Longevity Ventures, Thynk Capital and SENS Research Foundation.

[ts_bullet_primary] Velano Vascular, a San Francisco-based vascular access technology company, raised $10 million in funding. Investors include Intermountain Healthcare, Edward Ludwig, Marc Benioff, Robert Parkinson, and Kapor Capital.

PRIVATE EQUITY DEALS

[ts_bullet_primary] Zayo Group Holdings, Inc (NYSE: ZAYO) agreed to be acquired by Digital Colony Partners and the EQT Infrastructure IV fund, in a cash transaction valued at $14.3 billion.

[ts_bullet_primary] Vector Media, a portfolio company of Spire Capital, acquired Laurel Outdoor, a New Orleans-based outdoor advertising company. Financial terms weren’t disclosed.

[ts_bullet_primary] Sign-Zone, a portfolio company of Pfingsten, acquired Promic, a Netherlands-based designer and distributor of promotional displays. Financial terms weren’t disclosed.

[ts_bullet_primary] HCAP Partners made an investment in CortiCare Inc, a Carlsbad, Calif.-based neurotelemetry and remote neurological patient monitoring company. Financial terms weren’t disclosed.

[ts_bullet_primary] Center Rock Capital Partners, LP made an investment in Signature Systems Group, a Flower Mound, Texas-based manufacturer of composite ground protection products. Financial terms weren’t disclosed.

[ts_bullet_primary] Wind Point Partners acquired A&R Logistics, a Louisville, Ky.-based provider of integrated dry bulk logistics solutions for the chemical and plastic industries. Financial terms weren’t disclosed.

IPOs

[ts_bullet_primary] Parsons, a Centreville, Va.-based defense tech firm, raised $500 million in an IPO of 18.5 million shares priced at $27. It posted revenue of $3.6 billion in 2018 and income of $222 million. It plans to list on the NYSE as “PSN.” Read more.

[ts_bullet_primary] Anheuser-Busch InBev confirmed that it is weighing an IPO of its Asia arm. Read more.

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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.