On deals and dealmakers.

By Erin Griffith
May 22, 2017

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WE CHANGED THE WORLD! …OOPS

Good morning! Busy news day already, with Ford set to replace its CEO, SoftBank finally closing its Vision Fund, AngelList launching a platform for ICOs, and Wilbur Ross waking up from a nap to make a nonsense comment about protesters in Saudi Arabia.

But first: My column in the latest issue of Fortune. (You can read it online here.)

IF YOU PAY ATTENTION only to statistics, the technology industry is stronger than ever: Profits are surging, tech stocks are up 17.4% this year, and the industry’s products are used by more people than ever to do more things than ever. Self-driving cars! Intelligent assistants! Pizza-delivery drones! These companies are truly changing the world!

But profits and pizza drones are only one piece of the tech industry’s increasing power. With software invading every sector of the global economy, it’s starting to feel like the handful of conglomerates who dominate tech control everything we do. The New York Times even dubbed the industry’s most valuable players—Apple, Amazon, Alphabet, Facebook, and Microsoft, worth a combined $2.87 trillion—the “Frightful Five.” The newspaper’s point is that their dominance should scare competitors, regulators, incumbents, and most importantly us, the humans whose lives they power.

Silicon Valley’s giants have always paid lip service to these fears, but they know the data tell another story. People will keep using their products, no matter the scandal. Negative headlines rarely stick around for very long. Why fret over this week’s noise when every performance chart points up and to the right?

Consider: Amazon’s sales continued to grow amid reports of brutal treatment of its warehouse workers. Google’s search dominance has never wavered through various privacy outrages and accusations of monopolistic behavior. Airbnb’s home-sharing network doubles every year despite legal roadblocks and tales of racism and home-trashing. Facebook steadily signs up users even as they protest new features or complain about its spreading of fake news. And Uber added customers amid this winter’s #DeleteUber campaign and bonanza of unsettling scandals. (For more, read “Riding Shotgun With Travis Kalanick” by Adam Lashinsky.)

“Silicon Valley has learned to tune out the anecdotal feedback and just look at the numbers,” Uber investor Chris Sacca said at a conference in May. It’s an easy attitude for tech companies to take. Their products are so convenient, so cheap, so ubiquitous, and so addictive that we can’t stop ourselves from using them. (The troves of personal data the companies collect from our behavior only make the products more useful and addictive.)

But, Sacca noted, a success plainly reflected on spreadsheets and charts only reinforces bad behavior. Sacca insists that Uber CEO Travis Kalanick, known for his aggressive, win-at-all-costs attitude, is finally softening his tone and listening to criticism. Such a change might not make a difference to Uber’s finances or market share. But as powerful companies like Uber and the “Frightful Five” worm their way deeper into our lives, it’s more important than ever they pay attention to this intangible, hard-to-measure stuff. You know—the questions, concerns, fears, and feedback from the human beings who use their products and services.

The world’s largest technology companies indisputably have great power. Great responsibility? That’s a work in progress.


THE LATEST FROM FORTUNE...

• The fintech revolution will be tokenized.

• A Nextdoor revenue update.

• Texas may finally overturn its Uber and Lyft ban.

• Former IBM developer guilty of economic espionage.

Fortune feature: General Mills loses the culture wars.

• Half of all retail jobs could be automated within 10 years.

• Why Bitcoin broke $2,000.

…AND ELSEWHERE

Fund managers eclipse investment bankers on bonuses. White House blocks ethics inquiry about ex-lobbyists on payroll. The growth of white supremacist accounts on Twitter outpaces that of ISIS. Facebook targeting “insecure” teens. Facebook’s internal rulebook on sex, terrorism and violence. The FDA is racing to catch up to the digital medicine revolution. The U.S. has a worker shortage. Today in blaming millennials for everything: The Housing Shortage. How Evan Williams plans to fix the broken internet.


VENTURE DEALS

Valorem Energy, an Oklahoma City, Okla.-based oil and natural gas company, raised $300 million in funding from Kayne Private Energy Income Fund. [This item was updated with the correct company link.]

EcoIntense, a Berlin-based environmental management platform, raised €22 million ($24.7 million) in funding. Investors include One Peak Partners and Morgan Stanley Expansion Capital.

Away, a New York City-based travel brand and luggage company, raised $20 million in Series B funding. Global Founders Capital led the round, and was joined by Forerunner Ventures and Accel Partners, Karlie Kloss and Stewart Butterfield.

CornerJob, a Barcelona, Spain-based mobile recruitment platform, raised $19 million in Series C funding, according to TechCrunch. Investors include Northzone, Randstad Innovation Fund, e.ventures, Samaipata Ventures, Caixa Capital Risc, Sabadell Venture Capital, Mediaset Italia, Mediaset España, Groupe TF1, 5M Ventures, Media Digital Ventures, Augesco Ventures and TV Azteca. Read more.

SkyX, a Canada-based unmanned aircraft system developer, raised $4 million in funding from Kuang-Chi Group.

MortgageGym, a London-based regulated mortgage robo-adviser, raised 2 million pounds ($2.6 million) in seed funding. Investors include Wharton Asset Management, China Pacific Capital and Trifecta Capital.

Shipamax, a London-based fleet and deal management startup, raised $2.5 million in seed funding, according to TechCrunch. Cherubic Ventures led the round, and was joined by AME Cloud and FF Angel. Read more.

IronCore Labs, an encryption software developer with locations in Colorado and Montana, raised $1.5 million in seed funding. Next Frontier Capital led the round, and was joined by Blue Note Ventures, PV Ventures, and v1.vc.

NooBaa, a Boston-based storage software company, raised funding of an undisclosed amount. Investors include Jerusalem Venture Partners, OurCrowd and Akamai.


HEALTH AND LIFE SCIENCES DEALS

Lemonaid Health, a San Francisco-based online healthcare platform, raised $11 million in Series A funding. Novartis Venture Fund and Hikma Ventures led the round, and were joined by Quest Diagnostics, Correlation Ventures, Adaptive Healthcare Fund, Vega Ventures and 415 Ventures.

Upfront Healthcare Services, a Chicago-based patient scheduling software company, raised $5.6 million in funding. Nashville Capital Network led the round, and was joined by Hyde Park Venture Partners, Echo Health Ventures and Martin Ventures.

Vericred, a New York-based healthcare data services company, raised $5.5 million in Series A funding. FCA Venture Partners led the round.


PRIVATE EQUITY DEALS

Steward Health Care System, a Boston-based hospital operator owned by Cerberus Capital,  will acquire Iasis Healthcare Corp, a Franklin, Tenn.-based healthcare services company backed by TPG Capital for $1.9 billion, according to the Wall Street Journal. Read more.

Sun Capital Partners will sell Aclara Technologies, a Hazelwood, Mo.-based smart meters provider, according to Reuters. The company could be valued at under $1 billion. Read more.

• A consortium comprising QIC, Goldman Sachs Group’s private equity arm, and Pagoda Investment agreed to acquire Icon Cancer Care Group, an Australia-based cancer care company, for more than A$1 billion ($746 million), according to Bloomberg. Read more.

CDH Investments is selling a 6% stake in WH Group Ltd (SEHK:288) a Hong Kong-based pork supplier, according to Reuters. The deal will raise up to $743 million. CDH is selling 884 million shares at an indicative price range of HK$6.51 ($0.84) to HK$6.58 ($0.85) per share. Read more.

HGGC has agreed to buy Nutraceutical International (Nasdaq:NUTR), a Park City, Utah-based nutritional supplement manufacturer, in a deal valued at about $446 million, including debt.

Cerberus Capital Management acquired Bushkill Group, a Bushkill, Penn.-based villa and resort operator. Financial terms weren’t disclosed.

Ardian has agreed to acquire a 35% stake in LBC Tank Terminals, a Belgium-based bulk liquid storage facility operator, from State Super and Sunsuper. Financial terms weren’t disclosed.

Harvest Partners and Varsity Healthcare Partners recapitalized EyeCare Services Partners Holdings, a Dallas, Texas-based management services company. Financial terms weren’t disclosed.

Sheridan Capital Partners has made an investment of an undisclosed amount in Canadian Orthodontic Partners, a Canada-based orthodontics-focused management services company.


OTHER DEALS

Hunstman Corp (NYSE:HUN) and Clariant (SWX:CLN) are combining to create a chemical manufacturer with a market value of more than $14 billion, according to Reuters. Read more.

Americold, an Atlanta-based temperature-controlled warehouse provider, is exploring a sale or IPO, according to the Wall Street Journal. The deal could be valued at $3 to $4 billion. Read more.

HNA Group is in talks to buy a stake in Value Partners Group, a Hong Kong-based asset management holding company, according to Bloomberg. The deal could value the company at more than $2 billion. Read more.

AstraZeneca (LSE:AZN) has sold the European rights to its aging beta-blocker heart drug Seloken to Recordati (BIT:REC) for $300 million, according to Reuters. Read more.

Optima Healthcare Solutions acquired Hospicesoft, a supplier of cloud-based software for hospices. Financial terms weren’t disclosed.

Permira, CVC Capital Partners, and Hero MotoCorp are weighing bids for Ducati, the Italy-based motorcycle maker, according to Bloomberg. Read more.

Software Engineering Professionals has acquired CardBoard, a Carmel, Ind.-based collaborative design and story mapping tool. Financial terms weren’t disclosed.


IPOS

• Three companies and an SPAC are expected to go public this week. That includes app developer platform Appian, chip maker Smart Global Holdings, cable company WideOpenWest, and a “blank check” firm formed to acquire a healthcare company, KBL Merger Corp. Together, they are expected to raise about $650 million.


EXITS

National Fitness Partners, which is backed by Argonne Capital Group, acquired 12 Charlotte, N.C.-based Planet Fitness (NYSE:PLNT) clubs. The seller was GNT Holdings. Financial terms weren’t disclosed.

Partners Group has agreed to buy SPi Global, a Philippines-based outsourced services provider. The seller was CVC Capital Partners. Financial terms weren’t disclosed.

BC Partners has agreed to acquire DentalPro, an Italy-based dental services provider. Sellers include Summit Partners and VAM Investments. Financial terms weren’t disclosed.


FIRMS + FUNDS

MCH Private Equity, a Spain-based private equity firm, raised 350 million euros ($393 million) for its fourth middle market fund.

Softbank’s VisionFund raised $93 billion from Apple, Qualcomm, Mubadala Investment Company, Saudi Arabia’s PID public fund, Foxconn, and Sharp. Read more at Fortune.

Fundamental Advisors, a New York-based private equity firm, raised $993 million for its third private equity fund, Fundamental Partners III.

Work-Bench, a New York-based venture capital firm, is raising $40 million for its second fund.

Blackstone (NYSE:BX) and the Public Investment Fund plan to form a $40 billion vehicle to invest in infrastructure projects, mainly in the United States, according to Reuters. Read more.

RM Global Partners, a New York-based investment banking and strategic advisory firm raised $30 million for its Israel-based biopharma fund, the RMGP Biopharma Fund.


PEOPLE

High Road Capital Partners named Nicholas W. Martino as a partner and Eojin Lee as vice president. Previously, Martino was at ITW, and Lee was at D Cubed Group.

Gianni Russello joined Z Capital Group as a managing director. Previously, Russello was at Oppenheimer & Co.

Gregory Maxon joined Thomas H. Lee Partners as a managing director. Previously, Maxon was at J.P. Morgan Securities.

Richard Youle and Katja Butler will join Skadden, Arps, Slate, Meagher & Flom as partners.


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Polina Marinova produces Term Sheet, and Lucinda Shen compiles the IPO news. Send deal announcements to Polina here and IPO news to Lucinda here.

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