KKR has raised $711 million for a new growth equity technology fund called Next Generation Technology Growth Fund. A few notes based on a back-and-forth with David Welsh, the partner leading the effort who joined KKR in October from Adams Street Partners:
- The fund will be doing deals for tech companies in the “scaling” stage. Meaning, their technology is proven and they’re already disrupting legacy competitors. “The goal is simple: enterprise building,” Welsh says.
- KKR will occasionally use a small amount of debt in these deals.
- The fund has already done four deals: data analytics company Optimal+, travel booking site GetyourGuide, data integration startup Jitterbit and cybersecurity company Darktrace. Several of KKR’s best-known startup deals – Cylance, Magic Leap, Fanduel – were done outside of the fund.
- KKR’s selling point to startups is its network of portfolio companies. For example, KKR helped GoDaddy, which made two acquisitions this week, identify M&A targets and expand internationally. It’s not unlike the VC firms that foster community among their portfolio companies… except much, much bigger: KKR’s 100 portfolio companies spend $7 billion on IT and $10 billion on marketing each year.
• More layoffs: Yesterday I speculated that lots of startups are doing headcount-trimming before the end of the year. Here's one more:
Github, a San Francisco-based online project hosting startup, has made cuts to its sales department. The company confirmed the cuts to Term Sheet, saying the layoffs made up "less than 5%" of its employees. That would be around 30 people. A company spokesperson said the layoffs were part of Github’s focus on enterprise sales. “We are refocusing our resources in order to serve our customers more efficiently,” the spokesperson said.
Valued at $2 billion, Github has raised $350 million in funding from Andreessen Horowitz, Sequoia, IVP, Thrive Capital, and SV Angel.
• Yes That Deal Again: The CEOs of AT&T and Time Warner yesterday used the dominance of Facebook and Google as a way to argue their proposed merger is not monopolistic. I certainly didn’t expect that approach, and I especially did not expect Randall Stephenson and Mark Cuban to position AT&T as a hot young disrupter taking on entrenched fatcats Facebook and Google, rather than what AT&T is: a $255 billion provider of an essential utility with the ability to play favorites with its business interests. Regardless, the argument appears to be working: Lawmakers were more “circumspect” about the merger than they were when it was initially proposed.
• Speaking of That Deal: My colleague Jeff John Roberts has a scoop on a Chinese hacking of some major U.S. law firms, including Cravath, which is representing Time Warner in the deal. Read more on that here.
• Fintech Turf Wars: I still think it’s silly for cities to battle over which one will become The Fintech Capital of the World, but in case you have a dog in that fight, Singapore is apparently beating Hong Kong.
• Call for Submissions: You all are an insightful bunch, so I’d like to try an experiment. For the next week or so I’m collecting one sentence submissions on the following questions:
- What’s your top business-related prediction for 2017?
- What, if any, changes have you made to your strategy as a result of Trump and/or Brexit?
- Bonus question: Describe in one word how you feel about the next four years.
Respond to this email to submit. If all goes as planned I’ll publish the best answers as a roundup before the holidays. Please keep them short!
THE LATEST FROM FORTUNE...
• When Trump attacks, threats follow.
• Cord-cutting spreads to broadband.
• Abbot moves to kill the Alere deal.
• How Airbnb would like to be regulated.
• Vanguard flexes its muscles. The index-investing pioneer now has $3.8 trillion in assets. How will it use the clout that comes with all that money?
• Bethenny Frankel’s new venture.
• Tapering bond purchases in Europe.
Trump intends to keep a stake in his businesses. Bitcoin powerhouse done with bitcoin. Biohacking, startups, and the FDA. Lessons from Pebble’s demise. Inside Peter Theil’s genius factory. Mr. Yo is back. An investigation of Universal Health Services. Apple and taxes. More Michael Goguen legal drama. “The worst thing in the history of our environment!”
• Crossover Health, an Aliso Viejo, Calif.-based provider of employee health care that develops onsite and near-site health centers, has raised $92 million from Gurnet Point Capital.
• Nubank, a Sao Paulo-based company that offers a “no-fee” credit card managed via mobile app, raised $80 million in a Series D funding. DST Global led the round, and was joined by Sequoia, Tiger Global, Founders Fund, and QED. Read more.
• Breather, a New York City-based provider of on-demand workspaces, has raised $40 million in Series C funding led by Menlo Ventures.
• Osmo, a digital learning startup, has secured $24 million in funding from Mattel, Houghton Mifflin Harcourt, Collab+Sesame, Shea Ventures and joined by existing investors Accel, Upfront Ventures and K9 Ventures. The funding will build out Osmo’s suite of mixed-reality experiences, underlying reflective AI technology and help the company launch on its first non-iPad device, the iPhone.
• Augmedix, a San Francisco health applications for Google Glass, raised $23 million in funding from McKesson Ventures and OrbiMed.
Swap.com, a Bolingbrook, Ill.-based provider of online consignment services, has raised $20 million led by Swedish private equity firm eEquity.
• Vida Health, a San Francisco-based digital health platform that provides expert coaches for chronic conditions and wellness, raised $18 million in Series B funding. Canvas Ventures led the round and was joined by Nokia Growth Partners,and Aspect Ventures.
• New Form, a Los Angeles-based entertainment studio, has raised $18 million in Series B funding from from ITV and Discovery Communications.
• Movinga, a German-based startup that provides moving services, raised $18.3 million (€17 million) in Series C funding, including $6.5 million that was previously disclosed, from Rocket Internet’s Global Founders Capital, Earlybird Venture Capital and STS Ventures, Carlo Kölzer, and Gert Purkert, according to TechCrunch. Read more.
• Sabella, a French maker of marine turbines, raised $8.6 million (€8 million) in new funding from Ecotechnologies Fund, Force 29, Litto Invest, and existing investors including Emertec, Go capital, and Farinia group IWF, according to Tech.eu. Read more.
• Marvel, a London-based web and app based design platform, raised £4 million ($5.1 million). BGF Ventures led the round.
• AutoGraph, a Seattle-based provider of emotional intelligence and compliance technology, raised $4.7 million in Series B funding. Rally Capital led the round, and was joined by Voyager Capital.
• Waggle, a media company formed to publish original pet and animal content, raised $2.3 million in seed funding round. Raine Ventures led the round, and was joined by Lowercase Capital, Brooklyn Bridge Ventures, United Talent Agency, Broadway Video Ventures, Ore Ventures, and Allen Debevoise.
• Doctoranytime, a Belgian service for finding and booking appointments with dotors, raised $1.1 million (€1 million) in seed funding from angel investors including Apostolos Apostolakis, and Eleftheria Zourou, according to TechCrunch. Read more.
• BiBoard, a Paris-based maker of cloud-based business intelligence software, raised $1.6 million (€1.5 million) from existing investors Sigma Management, Kreaxi, Alps Capital innovation and Entrepreneur Factory, according to Tech.eu. Read more.
• Nuritas, an Irish food-tech company that uses artificial intelligence and DNA analysis to discover food molecules that can be used to develop supplements and drugs, raised an undisclosed amount in funding from U2 frontman Bono and lead guitarist The Edge. Read more at Fortune.
• Eversound, a provider of audio technology for older adults has raised $3 million in seed financing from Shelter Group, Red Bear Angels and 10X Ventures.
• Virteo, a Belgian fintech startup, has raised €2.2 million ($2.3 million) in a new round of financing from ParticipatieMaatschappij Vlaanderen, Sherpa Invest 2 and the Ark Angels Activator Fund.
• FHOOSH, a Miami-based cybersecurity startup, has raised $2 million from Volta Global.
• LifeYield, a Boston-based software company serving financial firms, advisors and investors, has received an investment of undisclosed size by Vestigo Ventures.
• PellePharm, clinical-stage biopharmaceutical company developing patidegib, a topical hedgehog inhibitor to treat basal cell carcinomas, has secured a drawable pool of capital of undisclosed size from BridgeBio Pharma.
PRIVATE EQUITY DEALS
• Solvay, a Belgium-based chemicals company, has sold its Acetow unit, a supplier to cigarette filter companies, to Blackstone Group for approximately €1 billion ($1.07 billion).
• EQT acquired a 60% stake of a joint venture which owns Getec Energie, a German energy company, according to Reuters. Read more.
• FIS (NYSE: FIS), a financial services technology company, has agreed to sell its SunGard Public Sector and Education businesses to Vista Equity Partners for $850 million. The SunGard Public Sector business will become a new independent company, while the SunGard Education business will become part of Vista-owned PowerSchool.
• M/C Partners, a Boston-based private equity and venture capital firm, has acquired Thrive Networks, a Tewksbury, Mass.-based managed services provider, from Manhattan Telecommunications Corporation and Corporate IT Solutions. No financial terms were disclosed.
• Water Street Healthcare Partners and JLL Partners have acquired MedPlast Inc., a Tempe, Ariz.-based medical device services provider. Financial terms were not disclosed.
• Ideal-Tridon, a Smyrna, Tenn.-based designer and manufacturer of stainless steel worm gear and speciality clamps backed by Industrial Growth Partners, has acquired Strapbinder, a manufacturer of securement products, from Signode Industrial Group.
• Stone-Goff Partners invested in The Channel Company (TCC), a Boston-based provider of IT channel-related media, events and marketing offerings. Terms were not disclosed.
• ICV Partners, has invested in SG360, a Wheeling, Ill.-based printing and multichannel direct marketing company with $300 million in annual revenue, which was majority-owned by the company’s Employee Stock Ownership Plan.
• Wynnchurch Capital has acquired Rosboro Company, a Springfield, Ore.-based provider of integrated forest products. Terms were not disclosed.
• W2O Group, an network of analytics and marketing firms backed by Mountaingate Capital, acquired Sentient Interactive, a media analytics company. Terms were not disclosed.
• Abbott Laboratories (ABT.N) has moved to terminate its proposed acquisition of Alere (ALR.N), a Waltham, Mass.-based provider of medical diagnostic devices and services, citing a "substantial loss" in the value of the company since striking the deal in January when Alere was worth $5.8 billion, according to Reuters. Read more.
• Sienna Biopharmaceuticals has acquired Creabilis, a U.K. and Italy-based company developing treatments for common inflammatory skin conditions. The price of the transaction could exceed $150 million. Creabilis was backed by Sofinnova Partners, Neomed, and AbbVie Biotech Ventures.
Aon (NYSE: AON) has hired Morgan Stanley to explore a sale of its employee benefit outsourcing business, according to Reuters. The deal could be worth $5 billion. Read more.
• Sauce Labs, Inc., a San Francisco provider of cloud-based testing for mobile and web apps, has acquired TestObject, a Berlin mobile app testing platform. TestObject raised $1.4 million in funding from WestTech Ventures and Frühphasenfonds Brandenburg.
• Main Street Capital Corp has recapitalized Hawk Ridge Systems, an Oakland, Calif.-based provider of 3D solutions. No financial terms were disclosed.
• Infogroup, a Papillion, Neb.-based provider of data, analytics and marketing services backed by CCMP Capital Advisor, is has hired Bank of America to sell itself. The sale could fetch $700 million to $800 million, according to the Wall Street Journal. Read more.
• American Express (NYSE:APX) acquired InAuth, a Boston, Mass.-based mobile device authentication and intelligence provider, for an undisclosed amount. InAuth was backed by $30 million in funding from Bain Capital Ventures, Commerce Ventures and Three Tree Ventures.
• Flexpoint Ford has acquired Purchasing Power Holdings, an Atlantia-based specialty e-retailer, from Rockbridge Growth Equity. Terms were not disclosed.
• GTCR has closed the previously announced sale of CAMP Systems, a provider of tracking systems for the aviation industry to The Hearst Corporation.
FIRMS + FUNDS
• KKR raised $711 million for its KKR Next Generation Technology Growth Fund, which will focus on technology, media, and telecom companies in the U.S., Europe, and Israel.
• 500 Startups plans to start a fund focused on startups in the Philippines in 2017, according to Bloomberg. The fund will be 500 Startups’ third to focus on Southeast Asia, after Thailand and Vietnam. Read more.
• Ben Franklin Technology Partners of Southeastern Pennsylvania, a non-profit government entity, Independence Health Group, the parent company of Independence Blue Cross; and Safeguard Scientifics (NYSE:SFE) will invest $6 million funding initiative over a four year period to into technology-driven, early-stage healthcare startups.
No new jobs today.