STUPID AMOUNTS OF MONEY
Good morning! Three quick things:
ALL UBER EVERYTHING: Travis Kalanick is mounting a comeback campaign, reports The Information. A potential (but unlikely to materialize) investment from SoftBank could have helped him secure more control of the board in order to do so.
To wildly understate things, a SoftBank deal would be complicated. SoftBank is already invested in pretty much all of Uber’s rivals. And The Information reports that a sizable investment from the Vision Fund would require approval from shareholders including Apple and Saudi Arabia. (Complicated bonus fact: Remember when Apple randomly invested $1 billion into Didi, the onetime rival, now-parent-company of Uber’s China operations?)
Under one scenario discussed, SoftBank could fund a deal with a loan collateralized by its Alibaba shares. The initial loan would go towards buying Uber shares, which would be used as collateral for more money to purchase more shares and so on.
Clear as day!
Always unpredictable, SoftBank’s Masayoshi Son told reporters doing SoftBank’s earnings call on Monday that he is interested in talking to both Uber and Lyft about investments and partnerships, and hasn’t made any decisions: “We have not decided which way.”
Meanwhile Kalanick is testing the limits of board governance with his maneuvering. It’s worth stating this: Travis Kalanick grew Uber to what it is today. But lest we forget in the six short weeks since he has not been CEO of the company, he is responsible for the company’s current problems. Kalanick oversaw a company visit to an escort bar, an H.R. department that allowed harassment and retaliation to go unchecked, the purposeful disregard of Apple’s App Store rules, Greyball, Project Hell, the obtaining of a rape victim’s medical records, and he hired an executive who he knew had taken trade secrets from Waymo.
NEW MONEY: Fatherly, a New York City-based media startup focused on millennial men, has raised $4 million in venture funding from BDMI, the investment arm of media company Bertelsman, and talent agency UTA.
The company plans to use the money to expand the scope of its content, launch a podcast, develop original video series, and expand internationally in the next 18 months. The company has created franchises like 940 Weekends, a reference to the number of weekends dads have to spend with their kids between birth and age 18; My Father The…, a series of interviews with children of famous men, and the Father of the Year awards, which it hopes will lead to more events. Michael Rothman, the company’s CEO, says the strategic expertise from UTA and BDMI will be key to accomplishing Fatherly’s goals.
Launched in 2015, Fatherly has the aim of making parenting into as much of a passion point for men as, say, sports or comedy. “We do everything we can to make this space in your life feel aspirational rather than ho-hum, the end of your life,” Rothman says. “We’re trying to speak to people who probably felt like the 4.2 million mom blogs weren’t for them.”
Since then, Fatherly has attracted a 2.5 million followers on Facebook and a web audience of 3.5 million monthly unique visitors, according to internal metrics.
A more meaningful of measure Fatherly’s success might be the number of people getting tattoos of its logo, a seahorse in the shape of the letter “F.” (The seahorse is the only creature that ingests eggs in reproduction.) Rothman says a dozen people have sent the company photos of their Fatherly tattoos. He does not yet have one, though he has threatened that if the company hits certain engagement goals he’ll get the logo tattooed as a teardrop under his eye.
The company currently earns revenue from all the usual forms of media monetization: native ads, custom videos, custom content. The company, which has worked with 100 advertisers to date, reportedly beat its annual revenue goal for 2017 of $5 million in July. (Read more here.)
A Legal ICO? A startup called Protocol Labs, backed by the Winklevii, Barry Silbert’s fund, and Sam Altman, has held a $52 million ICO that it says is legal in the eyes of the SEC. How? It was only offered to specific investors, all of which appear to be accredited. So even though we are supposed to believe that digital tokens are not securities, Protocol Labs is treating them as such:
Its product, the Filecoin Network, is still months if not longer from launch, and buyers of its tokens are in effect seed-funding the rough equivalent of a prelaunch company.
Around 150 investors participated in the offering.
And in a sign of the times, companies attempting to hype their ICOs are becoming increasingly aware of how nutty this whole phenomenon is. Here’s the disclaimer from a recent offering to land in my inbox:
There are many crazy fund raising ICO’s (Initial Coin Offerings) out there right now, trying to raise stupid amounts of money. This is not what we are doing.
In other words “this time it’s different.”
On a different note, the phrase, “This time it’s different” is a popular answer to a popular question in the tech world: Are we in a bubble? That question has changed quite a bit in recent years. Nobody is really debating whether we’re in a private market tech bubble anymore. Now the question is whether the big public tech companies – FANG, BAT, FAAMA, whatever acronym you want to make out of their initials – are hitting bubbly levels. As the New York Times points out: 7 of the world’s 10 most valuable companies are currently tech companies. The last time that happened was at the peak of the dotcom bubble, in 1999.
THE LATEST FROM FORTUNE...
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• Takeaways from a “near-perfect” jobs report.
Rest and vest. Insurance megamergers slow down. The story behind the weirdest stock photos. The sequel to the global financial crisis. “Tech company leaders can no longer pretend that tech is isolated from the ills and woes of society at large.” We know who he is. How “computer geeks” replaced “computer girls.”
• WeWork, a New York-based co-working company, raised $500 million round of funding for expansion in Southeast Asia and Korea. The investors were not named. This item has been updated.
• iflix, a Malaysia-based subscription video on demand service for emerging markets, raised $133 million in funding. Hearst led the round, and was joined by investors including EDBI and clients of DBS private bank. Existing shareholders Evolution Media, Sky PLC, Catcha Group, Liberty Global, Jungle Ventures and PLDT Inc. participated.
• Banza, a Detroit, Mich.-based producer of wholesale chickpea pastas, raised $7.5 million in Series A funding. Beechwood Capital led the round, and was joined by investors including Strand Equity Partners and RSE Ventures.
• Tokyo Smoke, a Toronto-based cannabis lifestyle and retail brand, raised C$4 million ($3.2 million) in Series B funding. Aphria Inc and Green Acre Capital led the round.
• Werk, a New York-based job board platform focused on flexible work, raised $2.9 million in seed funding. Rethink Impact led the round, and was joined by investors including SoGal Ventures and Leah Busque. Existing investors Halogen Ventures, Precursor VC, and Better Ventures participated.
• Winky Lux, a cosmetics beauty brand, raised $2 million in seed funding. Female Founders Fund led the round, and was joined by investors including BBG Ventures, GGV, SoGal Ventures and TGZ Capital.
HEALTH AND LIFE SCIENCES DEALS
• Karius, a life sciences company focused on infectious diseases, raised $50 million in Series A funding. Data Collective and Lightspeed Venture Partners co-led the round, and were joined by investors including Tencent and Khosla Ventures. Existing investors Innovation Endeavors and Spectrum 28 participated.
• Meissa Vaccines Inc, a South San Francisco-based developer of vaccines, raised seed funding of an undisclosed amount. The investor was FundRx.
PRIVATE EQUITY DEALS
• Captek Softgel, which is backed by Swander Pace Capital, acquired J+D Labs Pharma Manufacturing, a Vista, Calif.-based maker of health and wellness supplements. Financial terms weren’t disclosed.
• Anne Arundel Dermatology Management, a portfolio company of New MainStream Capital, acquired Knoxville Dermatology Group PC, a Knoxville, Tenn.-based provider of general, surgical and cosmetic dermatology services. Financial terms weren’t disclosed.
• CollabNet, a portfolio company of Vector Capital, has merged with VersionOne, an Alpharetta, Ga.-based management software solutions provider. The combined company will maintain the CollabNet name and will be headquartered in Atlanta. Financial terms weren’t disclosed.
• TOM Vehicle Rental, which is backed by Equistone Partners Europe, acquired Transflex Vehicle Rental, a U.K.-based vehicle rental firm. Financial terms weren’t disclosed.
• Brynwood Partners acquired Cold Spring Brewing Company, a Cold Spring, Minn.-based beverage manufacturer. Financial terms weren’t disclosed.
• Resolute Industrial, a portfolio company of One Equity Partners acquired Tioga HVAC Rentals, a Brooklyn Center, Minn.-based supplier of heating and small-tonnage cooling equipment. Financial terms weren’t disclosed.
• Netflix Inc. acquired Millarworld, a comic book publishing company founded by Mark Millar. Financial terms weren’t disclosed.
• Taptica (AIM:TAP) acquired Tremor Video’s demand-side platform, a technology stack built for video optimization and attribution, for $50 million. Tremor Video DSP will operate as an independent division of Taptica.
• Permira agreed to sell Netafim, an Israel-based irrigation firm, for $1.895 billion, to Mexichem. Mexichem will acquire 80% of Netafim while Kibbutz Hatzerim, the founder, will retain the remaining 20%.
• The Rohatyn Group agreed to acquire GMO Renewable Resources, a Boston-based provider of investment opportunities in forestry and agriculture investing, from Grantham, Mayo, Van Otterloo & Co. Financial terms weren’t disclosed.
• Xella International GmbH will buy URSA, a Madrid-based insulation materials provider. The sellers include KKR Credit. Financial terms weren’t disclosed.
FIRMS + FUNDS
• Harbert Growth Partners IV, L.P., a Richmond, Va.-based venture capital firm, raised $120 million for its fourth fund.
• Brian Nicholson joined M13 as the head of investments. Previously, Nicholson was at Stripes Group.
• Lisa Marrone joined August Capital as a principal.
• Anand Subramanian joined Macquarie Capital as a managing director and co-head of private capital markets. Previously, Subramanian was at Qatalyst Partners.