On deals and dealmakers.
VALUE ADD, AMAZON, CYBER-CORN
In which Mark Cuban trolls venture capitalists: At the Lerer Ventures CEO Summit yesterday, Shark Tank star Mark Cuban was asked if he believes artificial intelligence will disrupt the business of venture capital. Sure, he said, but that won’t affect him, because he’s not a venture capitalist. He’s an investor.
Wait. What’s the difference?
“The difference is I try to be supportive and involved in the companies I invest in,” Cuban zinged.
Uh. The moderator pointed out we were at an event hosted by venture capitalists. The audience laughed awkwardly. Cuban shrugged. They changed the subject and moved on. Later, while discussing Shark Tank, Cuban quipped, “Doing the show is easy, supporting these companies can be a nightmare.”
Afterward I asked to Cuban clarify. Does he really think venture capitalists don’t try to support their companies? Hasn’t he seen them touting their “value-added” suites of services ranging from recruiting and HR to “design sprints” and management training? Has he never heard of VC-as-a-platform??
“Do they? Maybe they do!” Cuban said he wasn’t really aware of that happening. He said he views venture investors as the people who give someone a bunch of money, tell them to grow like crazy, and will come back to help when it’s time to exit. Most companies he invests in, via Shark Tank or otherwise, don’t go on to raise traditional venture capital, he says, and he’d prefer they avoid the Silicon Valley ethos of burning cash and get profitable as early as possible. The biggest exception is Box, which he said he had been pushing to get profitable earlier than it wanted to.
Within the Valley’s echo chamber, the venture capital message of “founder-friendly” has become so tired it’s practically a cliche. But outside the Valley, it’s not exactly resonating.
Amazon: Cuban said he asks just about every startup he invests in how they’re going to compete with Amazon. That’s been a standard question for commerce startups for the last decade, but it’s increasingly a standard question for any startup.
“Amazon is the data company that, to me, is the world’s greatest startup.,” Cuban said. “All they’re doing is leveraging their data to build more startups.”
It’s a point worth making the week of Amazon’s 20-year anniversary as a public company. (A $5,000 investment back then would be worth $2.4 million today, by the way.)
Amazon is no longer “the everything store,” it’s the everything company. Just this week, the company signaled it would go deeper into online furniture, likely crushing any smaller players in that category. More notably, it’s thinking about pharmaceutical sales. The company is hiring a team to create a strategy for entering the pharmacy market, CNBC reports. In other words: Even if your category is a weak spot for Amazon today, assume the company will figure out a way to compete. It’s just a matter of time.
New Unicorn: CrowdStrike, the first cybersecurity firm to pin the DNC data breach on Russia, is now worth $1 billion, thanks to a new $100 million round of funding. Fortune’s Robert Hackett reports:
CrowdStrike, although not yet profitable, is aiming to go into the black in the next fiscal year, according to a spokesperson. The company declined to reveal its revenue figures, but said that it has an annual revenue run rate—a fuzzy yardstick that extrapolates sales for the year based on current figures—exceeding $100 million for 2017. Read more.
THE LATEST FROM FORTUNE...
• Google and Amazon spar over big SAP customers.
• Theranos reaches a deal with investors to avoid lawsuits.
• Fortune 500 CEOs and leaders weigh in on immigration.
• The return of Twitter’s zaniest co-founder.
• No president gets to jail journalists.
• Facebook’s fast-checking can make fake news spread even faster.
Well this crazy thing. Cleantech funding still looks pretty grim. Wall Street thinks Trump’s all talk when it comes to breaking up the banks. Casper does a deal with Target. Why Snap might have priced itself more intelligently than many thought. Private equity firms are considering a return to Turkey. A push for Puerto Rican statehood.
• Vesta Energy, a Canada-based exploration and production company focused on light oil property development, raised C$295 million ($216.7 million) in funding. Riverstone Holdings and JOG Capital led the round.
• CrowdStrike, an Irvine, Calif.-based cybersecurity firm, raised $100 million in funding round at a valuation exceeding $1 billion. Accel led the round, and was joined by March Capital Partners and Telstra. Existing investors CapitalG (formerly Google Capital) and Warburg Pincus participated. Read more at Fortune.
• Fetchr, a Dubai-based shipping app, raised $41 million in Series B funding. New Enterprise Associates Inc led the round, and was joined by Nokia Growth Partners, Raed Ventures, Iliad Partners, BECO Capital, YBA Kanoo, Venture Souq and Swicorp.
• Neighborly, a San Francisco-based civic crowdfunding platform, raised $25 million in Series A funding. 8VC and Emerson Collective co-led the round. Existing investors including Sound Ventures, Maven Ventures, Bee Partners, and Stanford University participated. Read more at Fortune.
• Tile, a San Mateo, Calif.-based smart location company, raised $25 in Series B-1 funding. Bessemer Venture Partners led the round. Existing investors including GGV Capital, Khosla Ventures, and Lead Edge Capital participated.
• Verse, a Barcelona, Spain-based mobile payment startup, raised $20 million in funding. Spark Capital led the round.
• Frame, a San Mateo, Calif.-based secure cloud workspace platform, raised $16 million in funding. Investors included Bain Capital Ventures, Microsoft Ventures, and In-Q-Tel. Existing investor CNTP participated.
• FogHorn Systems, a Mountain View, Calif.-based developer of edge analytics and machine learning software, raised $15 million in funding. Investors include Dell Technologies Capital and Saudi Aramco Energy Ventures.
• Mode, a San Francisco-based data analysis platform, raised $13 million in Series B funding. REV Venture Partners led the round, and was joined by Foundation Capital, and Goldcrest.
• Aira, a San Diego, Calif.-based developer of smart products for the vision impaired, raised $12 million in Series B funding. Jazz Venture Partners and Arboretum Ventures led the round, and were joined by Lux Capital, ARCH Venture Partners, Felicis Ventures and the National Federation of the Blind.
• Appear Here, a London-based marketplace for short-term rental space, raised $12 million in Series B funding. Octopus Ventures led the round, and was joined by Simon Venture Group. Existing investors Balderton, MMC, Meyer Bergman, and Playfair Capital participated.
• Mocana Corp, a San Francisco-based IoT security solutions provider, raised $11 million in funding. Investors include Sway Ventures, Shasta Ventures, Trident Capital Fund and GE Ventures.
• The Farmer’s Dog, a New York-based pet food company, raised $8.1 million in Series A funding. Shasta Ventures led the round. Existing investors Forerunner Ventures, Collaborative Fund and SV Angel participated.
• Invenia, a Canada-based machine learning platform that optimizes power grids, raised $5 million in Series A funding. Zetta Venture Partners led the round.
• Spotluck, a Bethesda, Md.-based restaurant discount app, raised $4.8 million in Series A funding. Jobi Capital led the round, and was joined by New Dominion Angels and Rank Capital Group. Read more.
• Rubica, a personal cyber security startup with locations in San Francisco and Seattle, raised $5.6 million in funding. Investors include Expa, Lerer Hippeau Ventures, Slow Ventures and Upfront Ventures.
• Nexla, a Millbrae, Calif.-based data operations platform, raised $3.5 million in seed funding. Blumberg Capital led the round, and was joined by Storm Ventures, Engineering Capital and Correlation Ventures.
• Neptune Research, an infrastructure repair and restoration company with locations in Florida and Texas, raised an undisclosed amount in funding from Palm Beach Capital.
• BuildOnMe, a Virginia-based artificial intelligence-enabled applications developer, raised an undisclosed amount in funding from ServiceNow Ventures.
• Dapresy, a Sweden-based visual data reporting software provider, raised an undisclosed amount in funding from Verdane Capital IX.
HEALTH AND LIFE SCIENCES DEALS
• Capsule, a New York-based pharmacy delivery startup, raised $20 million in funding. Thrive Capital led the round, and was joined by Sound Ventures and Virgin Group, according to the Wall Street Journal. Read more.
• Conversa, a San Rafael, Calif.-based patient communications management platform, raised $8 million in Series A funding. Northwell Ventures led the round, and was joined by Epic Ventures, and Healthgrades.
PRIVATE EQUITY DEALS
• Carlyle Group and Glencore have teamed up in an attempt to buy Morocco’s only oil refinery, according to Reuters. The Moroccan government is reportedly seeking at least $2 billion for the plant. Read more.
• Platinum Equity is nearing a deal to acquire Securus Technologies Holdings, a Dallas, Texas-based prison phone service company, for approximately $1.5 billion, including debt, according to Reuters. Read more.
• Alpha Private Equity Funds will acquire Europart, a Germany-based retailer for vehicle parts and workshop supplies. Financial terms weren’t disclosed.
• O2 Investment Partners has acquired a stake in Fairhaven Integration Services, an Atlanta-based engineering and installation service provider. Financial terms weren’t disclosed.
• Vista Equity Partners has invested an undisclosed amount in Zapproved, a Portland, Ore.-based e-discovery software provider for corporate legal departments.
• Ares Management and Blackstone Group are among the bidders vying for Fidelity & Guaranty Life (NYSE:FGL), according to Bloomberg. Athene Holding, which is backed by Apollo Global Management, may also make a bid. Read more.
• GP Investments Acquisition Corp (NasdaqCM:GPIA) and Rimini Street, a Las Vegas, Nevada-based software support service provider, have agreed to merge in a deal valued at about $837 million. GPIAC will be renamed Rimini Street Inc and continue trading on the NASDAQ under a new ticker symbol “RMNI.”
• Mlily, a China-based sleep product manufacturer, and rival King Koil China are set to bid in an auction for Dreams, with offers in the range of 400 million pounds ($517 million), according to media reports. Read more.
• Rue21, a Warrendale, Pa.-based teen apparel and accessories retailer, filed for Chapter 11 bankruptcy protection, according to Reuters. Rue21 listed assets and liabilities in the range of $1 billion and $10 billion. Read more.
• NGDATA agreed to acquire Eccella, a New York City-based data management and analytics consultancy. Financial terms weren’t disclosed.
• ServiceNow has agreed to acquire Qlue, a Palo Alto, Calif.-based smart messaging service platform. Financial terms weren’t disclosed.
• Delek Drilling (TASE:DEDR.L) and Avner Oil (TASE:AVNR.L), units of Delek Group (TASE:DLEKG), have completed a merger and will begin trading next week as one company, according to Reuters. Read more.
• G1 Therapeutics, a clinical-stage cancer treatment biotech based out of Research Triangle Park, N.C., raised $105 million in an offering of some 7 million shares priced at $15 a piece. G1 originally planned to offer 6.25 million shares at a range of between $15 to $17. J.P. Morgan and Cowen and company are leading the offering. G1 will begin trading on the Nasdaq under ticker symbol “GTHX.”
• Prezi acquired Infogram, a Latvia-based data visualization startup, according to Tech.eu. Financial terms weren’t disclosed. Infogram had raised about $2 million in venture funding from investors including Connect Ventures, Hackfwd, and Point Nine Capital. Read more.
• Terra Firma sold Infinis Group’s onshore wind assets to investors advised by J.P. Morgan Asset Management. Infinis Group is a U.K.-based renewable power generation company. Financial terms weren’t disclosed.
• Yup.com acquired Quickhelp, a Boston-based on-demand tutoring mobile platform. Quickhelp had raised an undisclosed amount in venture funding from Draft Ventures and Dorm Room Fund. Financial terms weren’t disclosed.
FIRMS + FUNDS
• ACON, a Washington D.C.-based private equity firm, raised $1.07 billion for its fourth fund, ACON Equity Partners IV.
• Honeywell (NYSE:HON) has announced the formation of its first venture capital fund with a focus on early-stage technology companies. The initial fund will be $100 million.
• AngelList announced the formation of Angel Funds, venture funds that allow angels to raise pools of capital from investors. Maiden Lane has committed $35 million to help back angel funds. Bain Capital Ventures plans to invest $2 million to $5 million annually, spread across five to 10 angel investors.
• Daniel Gwak and Sri Chandrasekar joined Point72 Ventures. Previously, they were at In-Q-Tel.
• Kurt von Holzhausen joined Broadhaven Capital Partners as a partner. Previously, von Holzhausen was at Goldman Sachs.
• Cory Hill joined Perella Weinberg Partners as a managing director. Previously, Hill was at Bank of America Merrill Lynch.
• Tiffany Obenchain was promoted to managing director at Insignia Capital Group.