Greetings from Carlsbad, where Fortune Brainstorm E wrapped up last night. You can find all of our coverage (stories plus videos) by going here. Here are some notes, before I hop a plane back east...
• Confusing: Donald Trump had a lot to say about finance in a Reuters interview yesterday, including his opposition to most of Dodd-Frank, his desire to audit the Federal Reserve and his apparent concern that we could be in the midst of a tech stock bubble.
On the last point, Trump's comments are fairly confounding. Check this out:
"You have a stock market that is very strange. Could be a little bit similar to, would you say it's nine years ago now? I guess it's sort of nine years ago. But you know, you look at some of these tech stocks that are so, so weak as a concept and a company and they're selling for so much money. And I would have said can that ever happen again? I think that could happen again... I'm talking about companies that have never made any money, that have a bad concept and that are valued at billions of dollars. So here we go again."
Nine years ago? Surely Trump must know that the tech stock bubble burst 15 years ago (i.e., 2001). Is he instead trying to compare the current prices of tech stocks to the 2007 prices of financial stocks (and, in particular, those involved in residential mortgages)? Even if we grant him the latter, he seems to be suggesting that a 2016 tech stock crash could result in the same sort of economic contagion that occurred nine years ago (i.e., the Great Recession).
Fairly bizarre given that the tech sector does not have the same type of systemic risk profile as does finance, not to mention the relatively small number of young tech companies that have gone public over the past few years (particularly when limited to companies "that have never made any money"). Or is he including still-private "unicorns" ― which, if so, would make even less sense. Unfortunately, Reuters does not appear to have followed up on Trump's statements.
• New firm alert: Glasswing Ventures has launched as a new Boston-based venture capital firm focused on early-stage tech companies "leveraging intelligent computing technologies."
Its two managing principals ― Rudina Seseri and Rick Grinnell ― previously were partners with Fairhaven Capital. A third partner, Sarah Fay, an angel investor who previously served as CEO of Aegis Media North America.
Seseri says that the split from Fairhaven is amicable, with her and Grinnel maintaining their existing portfolio responsibilities, but that their investment interests had simply diverged. "We're thinking a lot about AI, and then how that's then applied to the connected world and secured," she says. "IoT is fine, but the real question is what you actually do with the data."
She declined to comment on fundraising, but we've seen a pitchdeck that shows a $150 million target for Galsswing's debut fund, with a 2.5% management fee and 20% carried interest. It also shows that the trio reports a combined 4.25x return multiple (6x realized, 1.8x unrealized), and a gross IRR of 90%.
• Power trial: During a clean energy investment session yesterday morning at Fortune Brainstorm E, there was a lot of hand-wringing over the so-called "valley of death" ― the funding gap that cleantech companies often hit when trying to move their technology from lab to market.
One contributing factor, of course, is that big energy rarely acquires startups, even though they recognize that their existing business model is heading toward obselence (particularly outside the U.S.). It's the antithesis of what we see in pharma, a sector that contains a lot of the same binary scientific risk (albeit less market adoption risk).
David Danielson, a former VC who now leads the DoE's Office of Energy Efficiency and Renewable Energy, suggested to me that the energy sector could benefit from some sort of stage trials system like the FDA has set up for pharma. Not only to confirm efficacy, but also to help establish value propositions that could encourage big corporates to engage in M&A (particularly in the continued absence of an economy-wide carbon price), thus greasing the skids for greater renewables and energy efficiency adoption. Fairly interesting idea...
THE BIG DEAL
• The Orogen Group has been launched as a joint investment venture between Vikram Pandit (ex-CEO of Citigroup) and Atairos Group, a $4 billion investment unit of Comcast led by former Comcast CFO Michael Angelakis (who previously was with Providence Equity Partners). No financial terms were disclosed. Orogen will be an “operating company that will make control and other strategic investments in financial services companies and related businesses.”
Pandit will serve as CEO. Orogen also disclosed two managing directors: Ruchi Madan (ex-head of strategy at Citigroup) and Shannon Bell (ex-director of corporate communications for Citigroup). www.orogengroup.com
VENTURE CAPITAL DEALS
• Bark & Co. (a.k.a. BarkBox), a New York-based maker of pet products, has raised $60 million in new VC funding. August Capital led the round, and was joined by return backers RRE Ventures and Resolute Ventures. Read more.
• Dedrone, a Germany-based civilian drone detection system, has raised $10 million in Series A funding led by Menlo Ventures. www.dedrone.com
• Allurion Technologies, a Wellesley, Mass.-based maker of anti-obesity treatment devices, has raised $6 million in new VC funding led by Romulus Capital. Read more.
• BigPanda, a Palo Alto, Calif.-based alert correlation platform, has raised $5 million in Series B funding. Pelion Venture Partners was joined by return backers Battery Ventures, Mayfield and Sequoia Capital. www.bigpanda.com
PRIVATE EQUITY DEALS
• Adare Group, a UK-based global marketing services company, has acquired local rival Banner Managed Communication for an undisclosed amount. Adare Group is a portfolio company of private equity firm Endless LLP. www.adare.com
• Blue Star Sports, a Frisco, Texas-based portfolio company of Providence Equity Partners, has acquired Goalline, a Canadian provider of league management software for sports associations. No financial terms were disclosed. Sellers include Innovacorp. www.goalline.ca
• Centauri Health Solutions Inc., a Scottsdale, Ariz.-based provider of risk adjustment software, has raised $50 million in growth equity funding from Silversmith Capital Partners. www.centaurihs.com
• Fajr Capital has acquired Cravia Inc., a Dubai-based operator of restaurants in the Middle East under such brands as Zaatar w Zeit, Cinnabon, Seattle’s Best Coffee and Carvel. No financial terms were disclosed. Read more.
• LLR Partners has acquired Learn It Systems, a Baltimore-based provider of behavioral health services for children with autism and other special needs, from Milestone Partners. www.learnitsystems.com
• No IPO news this morning.
• Black Knight Financial Services Inc. (NYSE: BKFS) has acquired eLynx Holdings Inc., a Cincinnati-based SaaS platform for document and data collaboration and lender compliance for the mortgage industry, from American Capital. The deal is valued at $115 million. www.elynx.com
• Investcorp has hired William Blair and Barclays to find a buyer for Polyconcept, a Dutch provider of promotional products, according to Reuters. The deal could be worth around $1.3 billion, including debt. Read more.
• Seabury Human Capital has acquired a minority stake in Rainmaker Business Technologies Ltd., an Ireland-based maker of airline operations cost management software. No financial terms were disclosed. Seabury also has an option to buy a majority stake in Rainmaker from Investec Ventures. www.seaburygroup.com
• GoDaddy Inc. (NYSE: GDDY) has agreed to acquire FreedomVoice, an Encinitas, Calif.-based provider of communications solutions for small businesses, for up to $47 million (including $42m in upfront cash). www.freedomvoice.com
• Goldman Sachs reportedly is considering a sale of its Australian equities and fixed income businesses. Read more.
• HC2 Holdings, an investment group led by Phil Falcone, has submitted an unsolicited $1.04 billion takeover offer for The Andersons (Nasdaq: ANDE), a Maumee, Ohio-based ethanol producer and grain processing company. The $37 per share bid represents around a 42.6% premium over yesterday’s closing price. Read more.
• Midea Group (SZSE: 000333), a Chinese maker of home appliances, has offered to acquire German industrial robot maker Kuka AG (DB: KU2) for approximately $5 billion. Read more.
FIRMS & FUNDS
• Mekong Capital, a Vietnam-based private equity firm, has closed its fourth fund with $122 million in capital commitments (compared to a $150m target). Read more.
• Warburg Pincus is opening an office in Singapore, its fifth in Asia. It will be led by managing director Jeffrey Perlman, who is relocating from Hong Kong. www.warburgpincus.com
MOVING IN, ON & UP
• Takeshi Fukushima has joined BlackRock as a managing director and chief investment officer. He previously was with Tokyo-based GI Capital Management. Read more.
• Adrian Kerley has agreed to join Australia’s Commonwealth Super Corp. as head of its private equity portfolio. He previously was with Champ Ventures. Read more.
• Jefferies has hired a group of former Credit Suisse technology bankers: William Brady, who will be vice chair of Jefferies and chair of tech banking; Cully Davis, vice chair of equity capital markets; Cameron Lester, global co-head of tech investment banking; and John Metz and Steve West as managing directors. Read more.
• Susan Schwab, the former U.S. Trade Representative under George W. Bush, has joined the advisory board of Perella Weinberg Partners. She currently teaches at the University of Maryland’s School of Public Policy, and sits of the boards of directors at Boeing Co., Caterpillar Inc., FedEx Corp. and Marriott International Inc. Read more.
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