Good morning. It’s Jen Wieczner taking over your Term Sheet today while Erin is away. Please send me your feedback at email@example.com and/or follow and DM me on Twitter: @jenwieczner.
CRYPTO WEEK CONTINUES
It's a hedge fund savvy enough to have scooped up Bitcoin when it was free. One of its founders is the well-known CEO of AngelList, Naval Ravikant. It's backed by a roster of Silicon Valley's top venture capital firms, and boasts returns of more than 500%.
If you guessed Polychain Capital, the new cryptocurrency hedge fund that has gotten significant attention in recent weeks (for one, its founder is on the cover of the newest issue of Forbes), you guessed wrong.
Meet MetaStable Capital. The stealthy startup hedge fund based in San Francisco received funding this spring from Andreessen Horowitz, Sequoia Capital, Union Square Ventures, Founders Fund and Bessemer Venture Partners, Fortune has learned.
Notably, it's only Sequoia's second investment in a blockchain-related company in that venture capital firm's 45-year history; the first was Polychain earlier this year. (This news comes hot on the heels of the revelation that Polychain received $200 million in funding from several of the same investors: Sequoia, Andreessen, Union Square Ventures and Founders Fund.)
While it initially seems like the VC firms are doubling up on similar investments, it’s likely more a sign that the cryptocurrency industry has grown up enough to allow for diversification even in the same space: Whereas Polychain is making its name specializing in investing in ICOs (initial coin offerings), MetaStable invests directly in more established digital currencies that promise to become a new form of money. It currently owns about a dozen different cryptocurrencies, including Bitcoin, Ethereum and Monero.
Josh Seims, who co-founded MetaStable along with Ravikant and Lucas Ryan, had this to say about the fund:
The fund takes a value investing approach, "sort of what you imagine a Warren Buffett doing, but it’s kind of oxymoronic to use these terms in the space because everything is so ephemeral…. What we try to do is understand what are the use cases [for each cryptocurrency’s blockchain] and what are the technologies that are credible to becoming winning protocols in each of these use cases…. There's a handful of, say, between five and 10 of these major use cases that could be trillion-dollar blockchains.” MetaStable aims to invest in the cryptocurrencies most likely to be “the long-term winners.”
Here’s what else we know about MetaStable so far:
-The fund had returned 539% between its launch in September 2014 and mid-March of this year (lapping the returns of Bitcoin itself several times over), according to a pitch deck seen by Fortune. But because of the huge rise in cryptocurrency prices since March, we estimate that the returns now exceed 1000%.
-As of June 23, MetaStable had $69 million in assets, according to a regulatory filing.
-The minimum investment is $1 million, with fees that range between the typical “2 and 20” hedge fund structure (a management fee of 2% of assets, plus a performance fee of 20% of the profits), and a 1.5%/25% setup, depending on the particular fund.
-The VCs likely had the choice to invest in the “GP” (general partner) of the firm itself, or directly in the fund like any other hedge fund investor. Some probably did both. (The fact that some investments were in the fund itself would help explain why several of the VCs Fortune spoke with did not know the total amount of money raised nor who the other investors were.)
For more on MetaStable and the burgeoning world of cryptocurrency hedge funds in general, read my full story here.
CALLING ALL CRYPTOCURRENCY INVESTORS
I’m looking for insight for a longer-term story I’m working on: Please send me your stories of security snafus and lessons learned—from hacks and thefts to more mundane or even self-inflicted issues (encryption so strong that you got locked out yourself? Went the cold storage route but the dog ate your private key? Etc.). On the flip side, if you’ve gone to extreme lengths to secure your crypto, or come up with the perfect security solution—or if you’re fighting fraud or trying to track down hackers and fraudsters—I’d love to hear from you as well: firstname.lastname@example.org or DM at @jenwieczner.
THE LATEST FROM FORTUNE...
• An explainer on what makes a hacker.
• Meg Whitman has been meeting with Uber’s management.
• Warren Buffett had some advice for Wells Fargo’s CEO.
• Amazon is turning its focus to organic meat distribution.
• Softbank reportedly approached Uber about a ‘multibillion-dollar stake’
Scientists build DNA from scratch. How a Catholic School plans to spend its Snap IPO millions. Facebook is hiring a human AI editor. Elon Musk shares footage of The Boring Company’s first working car elevator. Google.org launches $50 million ‘future of work’ initiative.
• Toast, a Boston-based restaurant technology platform, raised $101 million in funding. Generation Investment Management and Lead Edge Capital led the round. Existing investors including Bessemer Venture Partners participated.
• Marqeta, an Oakland, Calif.-based open API payment card issuing platform, raised $25 million in Series D funding. Visa led the round.
• Momenta, a Beijing-based self-driving car software company, raised $46 million in Series B funding, according to TechCrunch. Investors include NIO Capital, Sequoia Capital China, Hillhouse Capital, Shunwei Capital, Sinovation Ventures, Unity Ventures, and Daimler participated. Read more.
• August Home, Inc, a San Francisco-based smart locks and smart home access products provider, raised $25 million in Series C funding. Investors include Bessemer Venture Partners, Comcast Ventures, Maveron, Qualcomm Ventures, AGL, Liberty Mutual, and SPDG.
• BYJU’s, an India-based educational services provider, raised funding of an undisclosed amount from Tencent at a valuation of $800 million, according to TechCrunch. In total, the BYJU’s has raised more than $200 million in funding.Read more.
• Sebacia, a Duluth, Ga.-based dermatology and aesthetics company, raised $20 million in Series D funding. Versant Ventures, Domain Associates, Accuitive Medical Ventures and Partners Healthcare Innovation Fund led the round, and were joined by investors including Salem Partners.
• Node, a San Francisco-based startup that uses artificial intelligence to find sales leads, raised $10.8 million in funding, according to TechCrunch. Avalon Ventures led the round, and were joined by investors including Mark Cuban, NEA, and Canaan Partners. Read more.
• PhysIQ, a Naperville, Ill.-based provider of proprietary predictive analytics for human physiology, raised $8 million in Series B funding. 4490 Ventures led the round, and was joined by investors including Quark Venture Inc and LionBird.
• FilterEasy, a Raleigh, N.C.-based subscription-based HVAC air filter service provider, raised $6.9 million in Series B funding. Arsenal Venture Partners led the round, and was joined by investors including NC State Endowment Fund, Bonaventure Capital, Cofounders Capital, IDEA Fund Partners, John Replogle, and Triangle Angel Partners.
• Inceptus Medical, an Aliso Viejo, Calif.-based medical device incubator, raised $4.5 million in Series B funding for Okami Medical Inc. Investors include U.S. Venture Partners.
• B-Secur, a Belfast-based ECG biometric software developer, raised £3.5 million ($4.5 million) in seed funding, according to TechCrunch. Investors include Accelerated Digital Ventures, Kernel Capital, Woodford Investment Management, and British Business Bank. Read more.
• Emagispace, a Los Angeles-based interior construction and design company, raised $4.2 million in Series A funding. Alpha Edison led the round, and was joined by investors including Circle Ventures, Jeremy Zimmer, 54 Madison.
• Loftsmart, a New York-based marketplace for student rentals, raised $2.75 million in funding. Tribeca Venture Partners led the round.
• Cleo, a London-based digital assistant that helps manage finances, raised £2 million ($2.6 million) in funding. Robin Klein led the round.
• Signal Vine, an Alexandria, Va.-based enterprise text messaging platform, raised $2 million in Series A funding. New Markets Venture Partners led the round.
• Signature Medical raised $2.5 million in Series A funding. Investors include Riot Ventures, Bose Corporation, and Allied Minds.
• ActionStreamer, a Cincinnati-based wearable technology platform, raised $1.88 million in seed funding. CincyTech led the round, and was joined by Vine Street Ventures.
• Noticeboard, an India-based mobile communication platform for on-field staff, raised $1.2 million in funding. Stellaris Venture Partners led the round.
HEALTH AND LIFE SCIENCES DEALS
• Kezar Life Sciences, a South San Francisco-based biopharmaceutical company developing novel small molecule therapeutics, raised $50 million in Series B funding. Cormorant Asset Management and Morningside Venture led the round and were joined by investors including Cowen Healthcare Investments, Pappas Ventures, Qiming Venture Partners, Bay City Capital, EcoR1 Capital, Omega Funds and Aju IB Investment.
• Rodeo Therapeutics Corp, a Seattle-based developer of small-molecule therapies to promote regeneration and repair of multiple tissue types, raised $5.9 million in Series A funding. Investors included AbbVie Ventures, Alexandria Venture Investments, ARCH Venture Partners, Eli Lilly and Company, Johnson & Johnson Innovation – JJDC, Inc., Watson Fund, L.P., WRF Capital and WuXi AppTec.
PRIVATE EQUITY DEALS
• Battery Ventures acquired AED-SICAD, a Bonn, Germany-based provider of high-end geographic information systems. Financial terms weren’t disclosed.
• Avalign Technologies, a portfolio company of Arlington Capital Partners, acquired Thortex, a Portland-based provider of porous coatings and metal injection molding for the medical device market and Millennium Surgical, a Narbeth, Penn.-based provider of specialty surgical instruments. Financial terms weren’t disclosed.
• KPS Capital acquired DexKo Global, a Novi, Mich.-based provider of running gear technology. Financial terms weren’t disclosed.
• Z Capital Partners acquired Sports Information Group, a New York-based multimedia information company focused on horse racing through its flagship Daily Racing Form platform. Financial terms weren’t disclosed.
• Viacom Inc informed Scripps Networks Interactive (Nasdaq:SNI) it is willing to pay all cash to acquire the TV network operator, according to Reuters. A deal with Scripps would create a $24.9 billion cable network. Read more.
• Beyond Pricing acquired Smart Host, a New York-based provider of online price recommendations for short-term rentals to hosts. Financial terms weren’t disclosed.
• Synthesio acquired Social Karma, a Belgium-based audience insights and engagement analytics solutions provider. Financial terms weren’t disclosed.
• Imagine Entertainment, a Beverly Hills, Calif.-based production company, formed a $100 million television production co-financing venture with TVB Venture. Under the terms of the agreement, TVB Venture has invested $100 million. Imagine and TVB will each own 50% of the venture.
• HNA Group, a Haikou, China-based conglomerate that operates airlines, real estate holdings, and banking services, has hired Goldman Sachs (NYSE:GS) to take Pactera, a Beijing-based provider of consulting and technology services, public, according to Reuters. HNA acquired Pactera for $675 million in cash from Blackstone (NYSE:BX) last year. Read more.
• Sage Group agreed to buy Intacct, a San Jose, Calif.-based accounting software company, for $850 million. Intacct had raised more than $130 million in venture funding from investors including Battery Ventures, Bessemer Venture Partners, Emergence Capital Partners, JK&B Capital, and Sigma Partners.
• EagleTree Capital, formerly Wasserstein Partners, agreed to buy a majority share in CORSAIR, a Fremont, Calif.-based manufacturer of PC components, gaming peripherals, and enthusiast memory, for $525 million. The seller was Francisco Partners.
• Platte River Equity sold ACT Independent Turbo Services, a La Porte, Texas-based gas and steam turbine repair facility operator, to Doosan Heavy Industries & Construction. Financial terms weren’t disclosed.
• HubSpot acquired Kemvi, a Cambridge, Mass.-based startup that uses artificial intelligence to extract information from websites, press releases, blog posts, and SEC filings. Financial terms weren’t disclosed. Kemvi had raised about $1 million in venture funding from Kepha Partners, Seabed VC, and Neotribe Ventures. Read more.
FIRMS + FUNDS
• Canaan Partners, a Menlo Park, Calif.-based early-stage venture capital firm, raised $800 million for its 11th fund. [This item has been updated.]
• Private Advisors, a subsidiary of New York Life Insurance Company, raised $350 million for its seventh private equity fund.
• Maniv Mobility LP, an Israel-based venture fund dedicated to mobility tech, raised $40 million for its first fund.
• Jonathan Knauss joined Raymond James as a managing director for its financial services investment banking practice. Previously, Knauss was at Hovde Group.
• Jan Wolter joined Target Partners as a venture partner. Previously, Wolter was at Applause.
• Philip Yau joined GI Partners as a managing director. Previously, Yau was at UBS Private Funds Group,
• Jessica Cohen re-joined TA Associates as a vice president in Boston, and Stefan Dandl and Jérémy Dréan were promoted to vice presidents in London.