BuzzFeed Wants to Sell You Stuff
Two years ago, Ben Kaufman, then-CEO of well-funded consumer product startup Quirky, delivered one of the most awkward, and candid, on-stage interviews I’ve ever witnessed at Fortune’s annual Brainstorm Tech conference. Quirky was in meltdown mode at the time. But instead of trying to spin the situation into a positive, Kaufman, then 28, clearly articulated where Quirky had gone wrong, admitting that the company's mission, a platform to bring people’s inventions to market, had failed. The biggest reason for the failure, he said, was, “because of the traditional bounds of brick and mortar retail.”
A few weeks later, he stepped down as CEO of the company. Not long after that, Quirky went bankrupt.
Kaufman went under the radar but continued to work on e-commerce projects. He recruited a few ex-Quirky people to his new company, called Scroll, and began dabbling. He built Thrice.com, a site that sells emoji-themed pool floats. He opened Auxilary, an agency that consults with brands on product design. Alongside Ricky Van Veen, Sriram Krishnan and Aaron Dignan, he created Homesick Candles, a site that sells scented candles that smell like different U.S. states. “We target people who are homesick and we sell a lot of candles. It’s very simple,” Kaufman says. (His co-founders have since taken other jobs: Van Veen is now Head of Global Creative Strategy at Facebook, Krishnan is a group product manager at Snapchat, and Dignan has a management consultancy called The Ready.)
Along the way, Kaufman met with BuzzFeed CEO Jonah Peretti to discuss the ways the e-commerce industry might evolve. “Ben was trying to create this idea of products that inspire people, that they want to share, that gives them a way to connect with their friends, and it was a BuzzFeed-y way of thinking about commerce,” Peretti tells Fortune. “We met him and it was like, ‘Whoa, we are thinking about really similar things.’”
In October, BuzzFeed quietly acquired Scroll. The companies did not disclose the deal value.
For the past three weeks, Kaufman has been leading a team of 10 called BuzzFeed Product Lab. Their mandate is to experiment independently with all forms of commerce until they find a formula that works. It’s early days. The company wasn’t planning to reveal the commerce initiative until next year.
Read the rest of this article at Fortune.com for details about BuzzFeed’s brick-and-mortar retail store, the Tasty Cookbook, a product called the Fondoodler, and an e-commerce site whose name would likely force this newsletter into your spam folders.
Related: BuzzFeed is poised to raise $200 million in new funding at a valuation that’s unchanged from its last round, according to a Delaware COB filing revealed on Friday afternoon. Recode previously reported on this round, noting it’ll be an inside round led by existing investor NBCUniversal.
Harry Weller, a general partner at New Enterprise Associates, died suddenly on Saturday at the age of 46. A nationally recognized venture capitalist, Weller made Forbes’ “Midas List” for the past nine years. He is survived by his wife and two sons.
THE LATEST FROM FORTUNE...
• Never-Trumpers saying ‘maybe’ to the White House
• Self-driving cars in Boston
• Phishing is the top hacking threat, says Homeland Security Secretary Jeh Johnson
• Trump wants to keep his Android phone in the White House
• Q&A with the CEO of Red Hat
• Hyperloop One settles lawsuit
• Ashton Kutcher, Airbnb and Code Pink protesters
• Analysts on Jeff Sessions
• Gearing up for a Trump-inspired coal boom
• Trump University settlesment
• This week’s Fortune Unfiltered podcast features Dave Brandon, CEO of Toys R Us and Chairman of Domino’s Pizza
Havas-Vivendi merger? Facebook plans to fight fake news. Plus, a $6 billion buyback. New Yorker profiles Black Mirror creator. This year non-tech companies have spent more money acquiring venture-backed companies than tech companies. Anthem + Cigna go to court. Spectacles in NYC. Activist investors are running out of U.S. targets.
• Genalyte, a San Diego, Calif. diagnostics company developing tests that require only a drop of blood, raised $36 million in funding from existing investors Khosla Ventures and Redmile Group.
• AdvisorEngine, formerly Vanare, a New York digital wealth management platform for investment advisors, raised $20 million in Series A funding from WisdomTree Investments.
• Joya Communications, the Palo Alto, Calif-based creator of video messaging app Marco Polo, has raised around $20 million in funding at an approximate $100 million valuation from Benchmark, according to Recode. Read more.
• RapidAPI, a Tel Aviv-based API marketplace, raised $3.5 million in seed funding. Andreessen Horowitz led the round with participation from FundersClub, SV Angel and Green Bay Advisors.
• Electric, a New York City automated support channel for small and medium-sized companies, raised $2 million in seed funding. Bowery Capital led the round, and was joined by Primary Venture Partners, Charge Ventures, Gunderson Dettmer, and Anchor Worldwide.
• Garmentory, an e-commerce marketplace for independent boutiques and emerging fashion designers, has raised a $2 million round of investment led by MHS Capital.
• Rapid Healthcare, an Irvine, Calif. mobile medical apps software company, raised an undisclosed amount in funding from Watermark Venture Capital.
PRIVATE EQUITY DEALS
• Crestview Partners has closed its previously announced $424 million acquisition of Accuride Corp., an Evansville, Ind.-based provider of components to the North American and European commercial vehicle industries. The deal values Accuride Corp.’s stock at $2.58 per share in cash, a 55% premium on the company’s September 1 close.
• Huron Capital Partners-owned Drake Automotive Group, a Henderson, Nev.-based automotive products manufacturer, has acquired Fender Gripper, a Tyler, Texas-based maker of protective fender covers, trunk mats, and carpet underlayments for the automotive aftermarket. Financial terms were not disclosed.
• Dyal Capital Partners, a Neuberger Berman Private Equity affiliate, has acquired a minority stake in New York City-based private equity firm KPS Capital Partners. Financial terms were not disclosed.
• Comvest Partners and JW Levin Management Partners have agreed to acquire Lasko Holdings, a West Chester, Pa.-based provider of portable fans and heaters.
• Grupo Los Grobo, a Argentina-based agribusiness company, has raised $100 million in capital from an international investment group led by Victoria Capital Partners. The group includes The University of Texas Investment Management Company, the International Finance Corporation and FMO, the Dutch development bank.
• Mountain View, Calif.-based Symantec has agreed to acquire LifeLock, a Tempe, Ariz.-based identity theft protection services company, for $2.3 billion. It will finance the deal with cash and $750 million in debt. Read more at Fortune.
• Swiss pharmaceutical giant Novartis is buying U.S.-based Selexys Pharmaceuticals in a deal worth up to $665 million, according to Reuters. Read more.
• Analog chipmaker Macom Technology Solutions has agreed to buy Applied Micro Circuits, a Sunnyvale, Calif.-based chipmaker, for about $770 million. The deal values Applied Micro’s stock at $8.36 per share ($3.25 of cash and 0.1089 in Macom shares), a 15% premium on the company’s Friday close. Read more at Fortune.
• Boral, Australia’s largest supplier of building materials, has agreed to acquire Headwaters, a Salt Lake City, Utah-based building products firm, for $2.6 billion. Boral will pay $24.25 per share, a 21% premium on Headwater’s closing price Friday.
• New York City-based private equity firm Clayton, Dubilier & Rice has acquired BUT, a French home equipment retailer, from Steinhoff International Holdings. No financial terms were disclosed.
• Oracle has acquired Dyn, a Manchester, N.H.-based cloud-based Internet performance and DNS performance management company. Dyn raised $88 million from investors including Pamplona Capital Management and North Bridge Venture Partners & Growth Equity. Read more at Fortune.
• Optiv Security, a Denver, Colo.-based cybersecurity company majority owned by Blackstone Group, filed for an initial public offering. The number of shares being sold and their expected price was not disclosed. Optiv plans to trade on the New York Stock Exchange under the ticker symbol OPTV. Read more at Fortune.
• Meitu, a Chinese mobile developer that makes apps to edit selfies, is testing demand for a proposed Hong Kong initial public offering of about $750 million, according to Bloomberg. Read more.
FIRMS + FUNDS
• Gryphon Investors, a San Francisco-based middle-market private equity firm, raised $1.1 billion for its fourth fund, Gryphon Partners IV.
• Charlotte, N.C.-based private equity firm Pamlico Capital raised $910 million for its fourth fund, Pamlico Capital IV.
• ARCH Venture Partners closed $408 million (of $550 million) for its ninth fund.
• IDinvest Partners raised €250 million ($265.7 million) for its second capital growth fund. The Paris-based private equity firm is aiming for a €350 ($372 million) to €400 million ($425.1 million) close.
• Permal Capital Management is now Glouston Capital Partners. The firm will continue to operate as a direct affiliate of Legg Mason.
• Krish Prabhu has joined Siris Capital Group as executive partner. Previously, Prabhu was chief technology officer of AT&T and president of AT&T Labs.