Good morning, Term Sheet readers.
So much news today. Let’s get right to it.
NOW, WHAT? Xerox Corp called off its planned $6.1 billion merger with Fujifilm Holdings Corp in a settlement with activist investors Carl Icahn and Darwin Deason that also hands control of the U.S. photocopier giant to new management. This means that the company will replace its CEO Jeff Jacobson (again) and it will make a series of changes to its board of directors. Read more.
TENCENT TROUBLE: In a heated attempt to outmaneuver Alibaba, Asia’s largest listed company Tencent has gone on a serious spending spree. As a result, Tencent is down $78 billion in value as profitability is predicted to drop to its lowest level since 2003, Bloomberg reports. In other words, the tech giant’s margins are said to be abysmal.
Tencent has emphasized that sacrificing margins in the short-term is to be expected as it grows at a lightning speed, but analysts worry that the company is not yet generating enough money from its mobile games to offset a decline in its desktop unit.
BLOCK PARTY: It’s “Blockchain Week” in New York City, and more than 8,000 people are expected to make their way into a Midtown Manhattan hotel for the Consensus conference, which kicks off today. Featured speakers include Twitter CEO Jack Dorsey, Federal Reserve Bank of St. Louis President James Bullard, and FedEx CEO Frederick Smith. So there’s bound to be some good stuff to come out of it.
I’ll be interviewing Jeremy Gardner, co-founder of Ausum Ventures who lives in a Crypto Castle, at the Block event on Wednesday at 3 p.m. Reply to this email with some questions you think I should ask him. More info if you’re interested here.
….In other crypto-related news: ConsenSys Ventures, the venture arm of the ConsenSys Ethereum, has invested in a new round of six companies and has formally launched its accelerator, “Tachyon.”
FEEDBACK: I received the following responses to Friday’s Term Sheet about VC Tim Draper’s never-ending, all-consuming support of embattled Theranos CEO Elizabeth Holmes:
Peter: The two messages he seems to be conveying is “as long as you’re making money for me and my investors, who cares if it’s fraud,” and “all regulation and disclosure requirements are bad.” And this is the guy who, per a Bloomberg article yesterday, is a “crypto legend.” Tells you a little about that world. This bull run can’t end soon enough. Hopefully the crypto mania will result in a shakeout separating good investors set on improving society from the greedy hucksters masquerading behind that narrative. Silicon Valley seems to have attracted both sets.
Marc: His bluster was pathetic. Kelly Evans should have just shut him down but I guess she was smart enough to recognize that he was hanging himself. Well done Kelly. The SEC should have charged him too.
Frank: Perhaps when he invested in a very early round, the supposed “technology “was at a very early stage, and the early prototypes always have bugs in them and produced a lot of false positives. However, he had an obligation to keep his due diligence up to date, as these additional big money rounds came in, and as she was cutting the deal with Walgreens. A simple “walk through” of the entire facility and the following of, at least a couple of batches all the way through the described processes, would have revealed the fraud.
THE LATEST FROM FORTUNE...
• IBM Thinks Blockchain Will Solve Facebook’s Data Problems (by Jen Wieczner)
• Running a Drone Business Was a Massive Cash Cow. Then the Drones Arrived
• Elon Musk Is Using a Hackathon to Solve the Tesla Model 3 Bottleneck (by Kirsten Korosec)
• Carousell, a Singapore-based mobile listing service that operates across Southeast Asia, raised $85 million in Series C funding. Rakuten Ventures and EDBI co-led the round, and were joined by investors including 500 Startups, Golden Gate Ventures, Sequoia India, and DBS.
• Rubicon Global, an Atlanta-based technology platform for waste and recycling, raised $65 million in funding. The investor was NZ Super Fund.
• Carro, a Singapore-based online full stack automotive marketplace, raised $60 million in Series B funding. Investors include Softbank Ventures Korea, Insignia Ventures Partners, B Capital Group, and the family office of Manik Arora. Existing investors Venturra, Singtel Innov8, Golden Gate Ventures and Alpha JWC also participated.
• Qventus, a Los Altos, Calif.-based operations management solution for health systems, raised $30 million in Series B funding. Investors include Bessemer Venture Partners, New York Presbyterian Ventures, Mayfield Fund and Norwest Venture Partners.
• TruValue Labs, a San Francisco-based provider of real-time sustainability data analytics, raised $13.6 million in Series A funding. Katalyst Ventures led the round, and was joined by investors including the Hearst Financial Venture Fund, The Entrepreneurs’ Fund, and Sun Hung Kai Strategic Capital Limited.
• Upbound, a Seattle-based cloud-native computing company, raised $9 million in Series A financing. GV led the round.
• VidMob, a New York-based provider of a video creation platform, raised an additional $6.4 million extension to its previously announced $7.5 million Series A round. Investors include Manifest Growth, Interlock Partners, Acadia Woods and Macanta Investments, and You & Mr Jones.
HEALTH AND LIFE SCIENCES DEALS
• Acousia Therapeutics, a Germany-based biotech company, raised 10 million euros ($11.9 million) in Series B funding. LBBW Venture Capital led the round, and was joined by investors including Creathor Ventures and Bregua Corp.
• SeqOnce Biosciences Inc, a Pasadena, Calif.-based life science company, raised $1 million in seed funding. Mount Wilson Ventures led the round.
PRIVATE EQUITY DEALS
• WestView Capital made an investment of an undisclosed amount in Cognito Forms, a Columbia, S.C.-based online form builder and data/payment collection platform.
• Drake Automotive Group, which is backed by Huron Capital, acquired Proforged, a Boulder, Colo.-based provider of chassis parts. Financial terms weren’t disclosed.
• JMI Equity made an investment of an undisclosed amount in CipherHealth, a New York-based patient communication, engagement and care coordination software company. Financial terms weren’t disclosed.
• Cinven agreed to buy JLA Group, a U.K.-based provider of commercial and industrial laundry. Financial terms weren’t disclosed.
• Foxconn Industrial Internet, a segment of Taiwanese iPhone parts maker Foxconn, will begin fundraising for its $4.3 billion IPO. The firm plans to list 1.8 billion shares. The company is set to IPO on the Shanghai Stock Exchange. Read more.
• Mercari, a Japanese flea marketplace app, filed to raise up to $1.1 billion in Tokyo. The company plans to offer shares priced between 2,200 to 2,700 yen ($20 to $25) apiece for a total valuation around . Read more.
• Greensky, an Atlanta, Ga.-based sales platform, said it plans to raise $750 million in an IPO of 34.1 million shares priced between $21 to $23. Pacific Investment Management Company and TPG back the firm. Goldman Sachs, J.P. Morgan, and Morgan Stanley are underwriters in the deal. The firm plans to list as “GSKY.” It has not yet chosen an exchange. Read more.
• Kiniksa Pharmaceuticals, a Lexington, Mass.-based firm creating products for autoimmune conditions, said it plans to raise $126 million in an IPO of 7 million shares priced between $17 to $19. Goldman Sachs and J.P. Morgan are underwriters in the deal. Baker Bros. Advisors backs the firm. The firm plans to list on the Nasdaq as “KNSA.” Read more.
• M17, a Taipei-based, filed to raise $116 million in an IPO. Vertex Asia Fund (12.1%), Infinity Ventures (9.1%), and KTB Asia Fund (5.7%) back the firm. Citigroup and Deutsche Bank Securities are underwriters in the deal. The firm plans to list on the NYSE as “YQ.” Read more.
• Kleopatra Holdings, a Wilton, Conn.-based rigid plastics maker, withdrew its $100 million IPO. Citigroup, Credit Suisse, Goldman Sachs, BofA, Baird, and Jefferies were underwriters in the deal. The firm planned to list on the NYSE as “KP.” Read more.
• Scholar Rock Holding, a Cambridge, Mass.-based biotech developing diseases in which protein growth plays a main factor, said it plans to raise $75 million in an IPO of 5.36 million shares priced between $13 to $15. Fidelity (15%), Polaris Venture (14%), ARCH Venture (14%), and Artal International (10%) back the firm. Jefferies, Cowen, and BMO Capital Markets are underwriters in the deal. Read more.
• China Tower, the world’s biggest mobile phone tower operator, filed for a $10 billion IPO in Hong Kong. The IPO could give China Tower an IPO of up to $40 billion. Read more.
• Kohlberg & Co acquired Senneca Holdings Inc, a Cincinnati-based maker of built-to-order specialty doors. Financial terms weren’t disclosed. Audax Private Equity was the seller.
FIRMS + FUNDS
• CRV, a Cambridge, Mass.-based venture capital firm, raised $600 million for its 17th fund.
• Wes Blackwell joined Scout Ventures as a partner.