Greetings from San Francisco, where tonight I'll attend a Fortune Brainstorm Tech dinner that features an interview with Steve Ballmer. Some notes before the sun comes up:
• Dry Powder Mountain: Lightspeed Venture Partners has raised over $1.2 billion to invest in consumer and enterprise tech startups, as we first reported yesterday (SEC filings showed up early this morning).
This includes $715 million for the Silicon Valley-based firm’s eleventh flagship fund focused on early-stage opportunities, and $500 million for its second “Select” fund for later-stage companies. Many of its best-known portfolio companies―including Snapchat, Nutanix and The Honest Company―are based in the U.S., but Lightspeed also has active investment practices in China, India and Israel. Expect the new funds to first be tapped sometime this summer.
In early 2014, Lightspeed raised $650 million for its tenth flagship fund and $350 million for its first “Select” pool. There doesn’t seem to be much difference in terms of investment strategy this time around, but there have been some personnel changes. Most notable are new partners Aaron Batalion (ex-Living Social), Sudip Chakrabarti (ex-Andreessen Horowitz), Ajay Sudan (ex-Palantir) and Alex Taussig (ex-Highland Capital Partners).
• Speaking of VC fundraising: Spark Capital this week disclosed in an SEC filing that it is targeting up to $370 million for its fifth flagship fund. That's a big dip from the $450 million it raised for Fund IV in 2013, but my understanding is that the change is not related to a decrease in either fundraising prospects of deal-flow/size expectations.
Instead, it's a byproduct of Spark raising its first growth fund (kind of like Lightspeed Select) after raising Fund IV, so the new flagship doesn't need as much capital for later-stage transactions. One big change for Spark, however, is that general partner Mo Koyfman will not be part of the new fund (per VentureWire).
• IPO wasteland: I spent some time on the phone earlier this week with Lise Buyer, the Google IPO architect who now runs a boutique firm (Class V Group) that advises startups on going public. My basic question: What will it take for the IPO market to return?
Buyer had two basic answers. The first was on macro conditions: "We need a calmer market, because volatility is the enemy of IPOs, and I do think we're getting there." The second was mostly about courage: "We need a company with rock-solid numbers to lead the way, because there's a fleet lining up to go second... There are certainly double-digit numbers of companies working on S-1's, but bankers do a very good job of scaring people until waiting to go public until after someone else succeeds with one. And then, even if we see it, they'll say to wait until we see Q1 earnings."
She adds that the current IPO baseline isn't so much about revenue ("approaching $100 million is fine), as it is about being able to show a very clear path to profitability.
It also may be worth watching today's earnings from Box and Square, as it could have an impact on how the markets view new, VC-backed tech issues...
• Wake me when it's over: The issue of carried interest tax treatment has been raised during both Democratic and Republican Party presidential debates, as part of what seems to be an emerging bipartisan consensus that the loophole should be closed. The New Yorker chimed in last week with a 7,000-word opus on the matter, casting Carlyle founder David Rubenstein as one of the most influential opponents of change.
This has been a pet issue of mine for nearly a decade, and you can read my basic argument by going here. I also posted a follow-up based to that post based on reader feedback. But I no longer take seriously the political promises on this issue from either side of the aisle. I'd like to be proven wrong ― as I would on broader corporate tax reform ― but politicians have proven year after year that they prefer writing this issue into stump speeches than into viable legislation. There's no demonstrated reason to believe that a new president will change that.
• Dinner table: Tonight's Fortune Brainstorm Tech event is "sold out," but we do hope to have video of the Ballmer interview on the Fortune site at some time tomorrow.
THE BIG DEAL
• Intuit Inc. (Nasdaq: INTU) has agreed to sell its QuickBase cloud development platform to Welsh, Carson, Anderson & Stowe. No financial terms were disclosed. QuickBase will now serve as a stand-alone company based in Cambridge, Mass., led by new CEO Allison Mnookin. www.quickbase.com
VENTURE CAPITAL DEALS
• Aprea AB, a Sweden-based developer of anti-cancer therapies targeting the tumor suppressor protein p53, has raised €46 million in Series B funding. Versant Ventures and 5AM Ventures co-led the round, and was joined by Sectoral Asset Management, HealthCap, KDev Investments and Rosetta Capital. www.aprea.com
• iFlix, an entertainment streaming company focused on the Southeast Asia market, has raised $45 million from British broadcaster Sky PLC (LSE: SKY). iFlix previously raised $30 million from Catcha Group (Malaysia) and PLDT (Philippines). Read more.
• Attivio, a Newton, Mass.-based “data dexterity” company, has raised $31 million in new financing. Backers include Oak Investment Partners, General Electric Pension Trust, Tenth Avenue Holdings and Per-Olof Soderberg. www.attovio.com
• Indochino, a Vancouver-based made-to-measure menswear retailer, has raised up to US$30 million as part of a strategic agreement with China’s Dayang Group. Read more.
• Valencell, a Raleigh, N.C.-based developer of performance biometric sensor technology, has raised $11 million in Series D funding. GII Tech led the round, and was joined by return backers TDF Ventures and WSJ Joshua Fund. www.valencell.com
• OneSpace, a St. Louis-based virtual workforce platform, has raised $9 million in Series B funding led by Lewis & Clark Ventures. www.onespace.com
• Selerity, a New York-based contextual content recommendation solution for the enterprise, has raised $4.2 million in Series C funding led by Citi. www.seleritycorp.com
• CBC Biotechnologies Inc., a Tampa, Fla.-based startup that uses synthetic biology to create pharmaceutical-grade cannabinoids, has raised $7 million in Series A funding led by Tuatara Capital. www.cbcbiotech.com
• Chronicled Inc., a San Francisco-based blockchain platform for registering and verifying products, has raised $3.425 million in seed funding. Mandra Capital led the round, and was joined by Colbeck and Pantera Capital. www.chronicled.com
• CoverWallet, a New York-based online insurance manager, has raised $2 million in seed funding from Two Sigma Ventures, Highland Capital Partners and Founder Collective. www.coverwallet.com
• IndiaMart, an Indian online marketplace, has raised an undisclosed of new funding led by Amadeus Capital. Other participants include Westbridge Capital, the Accion Frontier Inclusion Fund and return backer Intel Capital. www.indiamart.com
• Spotinst, an Israel-based cloud utilization optimization startup, has raised an undisclosed amount of Series A funding led by PICO Venture Partners. www.spotinst.com
PRIVATE EQUITY DEALS
• Apax Partners has agreed to acquire a 50.1% stake in the respiratory products business of Becton Dickinson & Co. (NYSE: BDX), via a joint venture valued at around $500 million. www.bd.com
• First Reserve has agreed to acquire the international power business of India-based electrical equipment maker Crompton Greaves Ltd. for €115 million. Read more.
• Gulf Coast Specialty Energy Services, a Metairie, La.-based portfolio company of Grey Mountain Partners, has acquired Marlin Services LLC, a Gary, La.-based provider of pipeline maintenance and other services to the energy industry. www.greymountain.com
• Nordic Capital has agreed to acquire ERT, a Philadelphia-based provider of patient data collection solutions for use in clinical drug development, from Genstar Capital. Read more. www.ert.com
• Partners Group has agreed to acquire Axia NetMedia (TSX: AXX), a Calgary-based fiber network operator, for C$272 million, or C$4.25 per share (49% premium to yesterday’s closing price). www.axia.com
• Senseonics, a Germantown, Md.-based provider of glucose monitoring devices, has set its IPO terms to 18.2 million shares being offered at between $3.10 and $3.50 per share. The company's stock is currently traded on the OTCQB under ticker symbol SENH, and it plans to relist on the NYSE MKT under symbol SENS. Leerink Partners and Canaccord Genuity are serving as lead underwriters. Senseonics reports a $24 million net loss on $38 million in revenue for the first nine months of 2015, and is backed by such firms as New Enterprise Associates (33% stake), Delphi Ventures (13.4%), HealthCare Ventures (7.4%), Roche Finance (10.5%) and Energy Capital (9.9%). www.senseonics.com
• Spring Bank Pharmaceuticals Inc., a Milford, Mass.-based developer of drugs based on a proprietary small molecule nucleic acid hybrid, has set its IPO terms to 2.858 million shares being offered at between $13 and $15 per share. The pre-revenue company plans to trade on the Nasdaq under ticker symbol SBPH, with William Blair listed as left lead underwriter. www.springbankpharm.com
• Intel (Nasdaq: INTC) has agreed to acquire Replay Technologies, a provider of multi-dimensional video imaging technologies. No financial terms were disclosed. Replay last week announced $13.5 million in Series B funding at a $75 million pre-money valuation, led by Deutsche Telekom Capital Partners. www.replay-technologies.com
• Sinclair Broadcasting (Nasdaq: SBGI) has completed its previously-announced $350 million purchase of The Tennis Channel. Sellers include Battery Ventures and Columbia Capital. www.tennischannel.com
• Booker, a New York-based platform for service commerce, has acquired Frederick, a San Francisco-based marketing automation platform for appointment-based service businesses. No financial terms were disclosed. Booker has raised over $80 million in VC funding from firms like Bain Capital Ventures, Medina Capital, Revolution Ventures, TDF Ventures and Grotech Ventures. www.booker.com
• Toshiba Corp. (Tokyo: 6502) named Canon Inc. (Tokyo: 7751) as the preferred bidder for its healthcare unit. Other bidders has included Permira (with Konica Minolta) and KKR (with Mitsui & Co.). Read more.
FIRMS & FUNDS
• G Square, a London-based private equity firm focused on healthcare, has held a €236 million first close on its debut fund, according to eFinancial News. The overall fund target is €300 million. Read more.
MOVING IN, ON & UP
• 500 Startups has named Jess Erickson as its LA program director, according to her LinkedIn profile. She continues to serve as the firm’s director of diversity. www.500startups.com
• Elizabeth Cain has joined OpenView Venture Partners as president of its “go-to-market” strategy. She previously led global business development for NetSuite. www.openviewpartners.com
• Chris Colpitts has joined CVC Capital Partners as a senior managing director and U.S. head of technology, media and telecom investments. He previously was with Deutsche Bank as its global co-head of TMT investment banking. www.cvc.com
• FTV Capital has promoted Kyle Griswold to partner. The firm also has promoted Robert Anderson and Aly Lovett to principal, and Richard Liu to vice president. www.ftvcapital.com
• Neil Hasson has joined Investcorp as a managing director focused on European real estate investments. He previously was with Macquarie Group. www.investcorp.com
• Neil Kalvelage has joined Charlesbank Capital Partners as an operating partner. He previously was an operating partner with Bain Capital. www.charlesbank.com
• Linsalata Capital Partners has promoted both Murad Berg and Jeffrey Wahl to managing director. The Cleveland-based private equity firm also promoted James Guddy to principal. www.linsalatacapital.com
• Xenia Loos has joined LeapFrog Investments as director of investor relations. She previously was with AAC Capital Partners. www.leapfroginvest.com
• Avnish Mehra has joined Singapore-based Everstone Capital as a managing director. He previously founded the India investment practice of Advent International. www.everstonecapital.com
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