On deals and dealmakers.
A THOROUGH GENTLEMAN
The strange story of Nin Ventures took a confusing twist on Friday night.
First, some background: In November 2016, Nin Ventures, a Chicago-based venture capital firm founded by Nin Desai, announced it hired Gurbaksh Chahal as an advisor. Term Sheet and other media outlets reported on the announcement, which was notable because Chahal is a successful entrepreneur with a disreputable past. Several years ago he pled guilty to misdemeanor domestic violence and battery charges; he was later removed from his CEO role at RadiumOne, an advertising technology company. Later, he was sued for gender discrimination and accused of domestic violence at his new company, Gravity4.
The announcement of his appointment came from a press release, which included a quote from Chahal. It was sent from a woman with a Nin Ventures email address. The firm’s website features Chahal as an advisor. Nin Ventures’ website also offers “advertising opportunities” and directs queries to a Gravity4 email address. Desai appeared on NBC to defend her decision to hire Chahal, repeatedly calling him “a thorough gentleman.”
Desai, who formerly worked at Chicago private equity firm Alpha Capital Partners, founded Nin Ventures in 2014. The firm got attention for using the JOBS Act to crowdfund its investment fund. In 2015, the firm announced it raised $5 million of its $10 million funding goal. The firm does not list any portfolio companies on its site and I could not find evidence of any investments. (Likewise, Desai declines to name any investments in her NBC interview.)
ON FRIDAY, seemingly out of nowhere, the Twitter account of Nin Ventures tweeted this:
“Any legit reporter wanting unfiltered access email firstname.lastname@example.org
PS @eringriffith shame on you for writing false & baseless stories.”
When I (and Dan Primack and several others) responded on Twitter asking what I wrote that was false, the Nin Ventures account responded cryptically:
“Actions don’t require words. Intelligence does not require explanations. PS: Media does need eyeballs,” and followed it up with, “Due diligence is your forte and should be…good luck!”
The “any legit reporter wanting unfiltered access” wording in Nin Ventures’ first tweet matched that of a recent tweet from Chahal (who has in the past gone on Twitter rants about fake news).
Chahal joined the Twitter conversation to say that he has never met or spoke with Nin Desai. He did not join the company’s advisory board, he tweeted. Similar to Nin Ventures’ tweets, he attacked me for covering the announcement, writing, “You got played.” He also claimed he has sent Nin Ventures a cease and desist order but refused to say when he sent it or produce proof of it. He explained that he never denied the announcement to the media because he doesn’t trust the media “after all the false (sic) you’ve written about me.”
One or both of them is lying. Either Nin Desai fabricated the entire thing in a bid for media attention, as Chahal claims, or Chahal was involved with Nin Ventures and no longer wants to be associated with the firm. Or they’re working together to get more media attention. Or some version of the truth that lies in the middle. Perhaps we all got played into giving attention to Nin Ventures. Perhaps by bringing it back up now, I’m getting played all over again. But I’d like to correct the record if the announcement was indeed a lie.
On Friday I reached out to every email address and phone number I could find related to Nin Ventures, including Desai, her lawyer Gary Jungels, and two different Nin Ventures PR people. Several of the associates listed on the Nin.VC website appear to no longer work with the firm, according to their LinkedIn accounts. No one has responded to me.
My questions are:
• What does the “advisor” role mean at Nin Ventures?
• Have Desai and Chahal ever been in contact?
• If Chahal never joined the board, why wouldn’t he (or his lawyer if he distrusts the media so much) deny the reports immediately?
• Why is the language in Chahal’s tweets and Nin Ventures’ tweets so similar? Did Chahal have access to the Nin Ventures Twitter account?
• Did Chahal send a cease & desist? When? Can we see it? Why won’t he share it publicly?
• Why would Nin Ventures suddenly, six months later, claim information it announced (and currently displays on its website) is “false & baseless” on Twitter?
• Why does the Nin Ventures website offer advertising opportunities, directing potential advertisers to Gravity4, Chahal’s advertising technology company?
• If Desai made it all up, what is her motivation? How did she foresee this going?
• Has Nin Ventures ever invested in a company?
Term Sheet readers often ask where we get all the information we publish in the newsletter. The 20-50 news items you see each morning in our deal roundup below come from press releases, filings, and the occasional news report. There are sometimes suspicious-sounding items that we skip. But typically, we operate under the assumption that venture capital and private equity firms do not issue fake press releases. These businesses run on their reputations. (Press release fraud is more common in the world of stock scamming but still rare even then. I can only think of one time in my career that a private equity or venture capital-related press release has turned out to be fake: The recruiting scam, which my predecessor Dan Primack identified, and which Term Sheet has since exposed on numerous occasions.)
Regardless of what is actually true in this situation, you can bet that we will not trust anything sent from Nin Ventures again. In retrospect, Desai left us a clue: In a 2015 interview with the Chicago Tribune, Desai said, “Numbers don’t lie; people lie.”
THE LATEST FROM FORTUNE...
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• Everything to know about the WannaCry ransomware attack.
• Every company is a cyber company now.
• Cybersecurity stocks are soaring after the ransomware attack.
• Why the stock market barely noticed the Sprint and T-Mobile merger talks.
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Lyft and Waymo team up. Preet Bharara: Are there public servants who will say no to the president? How Google took over the classroom. Signing away the right to get a new job. The painful truth about teeth. Microsoft says Friday’s cybersecurity attack is an example of why the stockpiling of vulnerabilities by governments is such a problem. A Putin acolyte turned Silicon Valley investor.
• Vice Media, a Brooklyn, N.Y.-based media company, is reportedly raising a new round of funding that would give it a market value of more than $5 billion. Investors could include TPG Capital and CVC Capital Partners. Read more at Fortune.
• Delivery Hero, a Berlin-based food delivery platform, raised €387 million ($423 million) from Naspers.
• Terminus, an Atlanta account-based marketing platform, raised $10.3 million in Series B funding. Atlanta Ventures and Edison Partners co-led the round, and were joined by HubSpot, High Alpha, and Vine St. Ventures. Existing investors including Hyde Park Venture Partners, Arthur Ventures and Knoll Ventures participated.
• Mintigo, a San Mateo, Calif.-based predictive analytics AI platform, raised $10 million in funding. Investors include Glilot Capital Partners, Sequoia Capital IL, Adams Street Partners, Giza Venture Capital, Maverick Ventures and Vintage Investment Partners.
• unu, a Berlin-based smart electric scooter developer, raised €7.5 million ($8.2 million) in funding. Investors include Capnamic Ventures, Iris Capital, NRW.Bank and Founder.org.
• People Power, a Redwood City, Calif.-based Internet of Things and artificial intelligence software company, raised $4 million in Series B-1 funding. Investors include innogy SE and Origin Energy.
• AppOnboard, a Los Angeles-based developer of mobile demos for apps and games, raised $4 million in funding. Investors include Troy Capital Partners and London Venture Partners.
• AKUA, a Baltimore, Md.-based cargo container tracking solution provider, raised $3 million in seed funding. Crosslink Capital led the round, and was joined by Talis Capital and Enterprise Security Syndicate.
• Truepic, a San Diego, Calif.-based digital photo verification company, raised $1.75 million in seed funding from investors including Jeffrey Parker, Andrew Flilpowski, and William Sahlman.
• Aflore, a Colombia-based financial services company, has raised an undisclosed amount in Series A funding from Fiinlab.
HEALTH AND LIFE SCIENCES DEALS
• Genoa Pharmaceuticals, a San Diego, Calif.-based biopharmaceutical company, raised $62 million in Series A funding. F-Prime Capital Partners and Edmond de Rothschild Investment Partners co-led the round, and were joined by Novo AS, RiverVest Venture Partners, and TPG Biotech.
PRIVATE EQUITY DEALS
• General Atlantic made an investment of an undisclosed amount in ControlExpert, a Germany-based car insurance service provider. Financial terms weren’t disclosed.
• Thermo Fisher Scientific (NYSE:TMO) will buy Patheon NV (NYSE:PTHN), a Netherlands-based pharmaceutical development provider, for about $5.2 billion in cash, according to Reuters. The $35 per share offer represents a premium of about 17.5% premium to Patheon’s closing price on May 12. Read more.
• LiveXLive Tickets, a subsidiary of Loton, Corp (OTCPK:LIVX), acquired Wantickets, a Hollywood, Calif.-based branded event marketing and ticketing company. Financial terms weren’t disclosed.
• Spotify, the Swedish music streaming service, is reportedly planning to go public later this year or in early 2018, according to Reuters. But the company, valued at about $13 billion, is reportedly going directly to the public with its shares, rather than having a Wall Street bank underwrite the process. According to sources interviewed by Reuters, Spotify has retained Morgan Stanley, Goldman Sachs, and Allen & Co. to advise them on the deal.
• National Energy Services Reunited, a Houston, Texas-based SPAC formed by Sherif Foda(formerly an executive at Schlumberger) and Thomas Wood (formerly CEO of Xtreme Drilling Corp.), said it raised some $210 million to acquire an energy company in an offering of 21 million shares at $10 a piece. The company listed under “NESRU” on the Nasdaq. Maxim and National Bank of Canada are lead underwriters in the deal.
• Modern Media Acquisition, a SPAC set up to make a purchase in the media space, raised $180 million in an offering of some 18 million units priced at $10 a piece. The “blank check” company, backed by Macquarie, went public on the Nasdaq as “MMDMU.”
• Athenex, a Buffalo, N.Y.-based cancer biotech company, filed for an IPO Friday. At least for now, the company says it plans to raise about $100 million with the help of lead underwriters Credit Suisse and J.P. Morgan. Pricing terms have not yet been disclosed. The company, which reported revenue of $20.6 million on loss of $87.7 million, is backed by Mandra Capital (16.2%), Tencent CEO Ma Huateng (9.9%), Pharminex (6.5%), and Charter Link International (6%).
• Oasis Midstream Partners, a Houston, Texas-based MLP formed from Oasis Petroleum, filed for an IPO Friday. For now, Oasis says it plans to raise some $100 million. Morgan Stanley is the lead underwriter for the company, which plans to go public on the NYSE as “OMP.” The company raised $121 million in revenue on earnings of $40 million in 2016. Pricing terms have not yet been disclosed.
• Appian, an app-developing software maker based out of Reston, Va., said Friday that it would raise some $75 million shares in an offering of about 6.3 million shares priced between $11 to $13. Novak Biddle Venture Partners controls roughly 21.5% of the company, while New Enterprise Associates controls about 11.7%. Morgan Stanley, Goldman Sachs, and Barclays are lead underwriters in the deal. The company plans to list at “APPN.”
• EQT VI has agreed to sell Bureau van Dijk, a Netherlands-based provider of business intelligence and company information, to Moody’s Corporation for €3 billion ($3.3 billion).
• Apple has acquired Lattice Data, a Menlo Park, Calif.-based data analytics company that processes unstructured data, for a purchase price between $175 million and $200 million. Lattice Data had raised at least $20 million from investors including GV and Madrona. Read more at Fortune.
• Brookfield Asset Management (TSX:BAM.A) has agreed to acquire a 20.3% stake (worth about $64 million) in Renova Energia (BOVESPA:RNEW11), a Brazil-based renewable energy company, from Light SA (BOVESPA:LIGT3). Brookfield will eventually become a controlling shareholder, according to Reuters. Read more.
• Paradigm Tax Group acquired TurboAppeal, a Chicago-based property tax assessment appeal platform. Financial terms weren’t disclosed. TurboAppeal raised more than $7 million in venture funding from investors including Camber Creek, Barbara Corcoran Venture Partners, Guaranteed Rate, and KGC Capital.
FIRMS + FUNDS
• Silk Ventures, a London-based venture capital firm, raised $500 million for its inaugural investment fund.
• Archer Venture Capital, a Los Angeles-based venture capital firm, has raised $80 million for its second fund, Archer Venture Capital II.
• Afore Capital, a San Francisco-based venture capital firm focused on pre-seed stage companies, raised $45.9 million for its first investment fund.
• Michael Descheneaux was promoted to president of Silicon Valley Bank. Previously, Descheneaux was the chief financial officer of SVB Financial Group.