A PRIVACY MESS
Good morning, Term Sheet readers.
One I want to bring to your attention as it’s especially timely is my colleague Michal Lev-Ram’s story on Facebook’s clean-up effort. Facebook CEO Mark Zuckerberg recently conceded that the social media giant was responsible for the content on its site. This was a pretty remarkable admission from a company that has insisted it was just providing a platform and thus absolved from blame for what gets said, done, or sold on its network.
After the fallout of the Cambridge Analytica scandal, Facebook has put together a “fix-it” team. By the end of 2018, Facebook plans to double the number of moderators and other “safety and security” personnel whose job it is to catch and remove inappropriate content. Here’s the Catch-22: In order for Facebook’s moderators and A.I. to better police content, they will need to rely on increasingly invasive tactics. There will be more human reviewers sifting through your photos, comments, updates, and likes. Meanwhile, the A.I. tools will need to do the same in order to flag high-risk posts.
So, we face a double-edge sword. Do you accept this trade-off — give Facebook more latitude to assess your data in exchange for safety? Where exactly do you draw the line?
From Michal’s story:
“Assessing risks and parsing posts, on such a global scale, is indeed unprecedented. To do it effectively, Facebook will likely end up accessing and analyzing ever more of our data. A.I. is already offering a radical shortcut, because it can sift through so much information in such little time.
In cases of sexual exploitation and unlawful nudity, for example, software can already detect the presence of nipples. How do A.I. tools learn to do this? By studying lots and lots of photos—our photos—and looking for patterns. But while technology can ascertain an areola, it can’t distinguish between an acceptable depiction of the body part—breastfeeding pics—and so-called “revenge porn,” a major no-no on the platform.
Where tech fails, human surveillance fills the gaps. Here, too, more information and more context can lead to more informed decision-making.”
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• NewsDog, an India-based news app, raised $50 million in Series C funding. Tencent led the round.
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• Realeyes, a London-based startup that uses computer vision to read a person’s emotional responses when they are watching a video, raised $16.2 million in funding, according to TechCrunch.Draper Esprit led the round, and was joined by investors including Karma Ventures and Harbert European Growth Capital. Read more.
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• Terminal, a Canada-based provider of a platform allowing companies to build and scale remote technical teams, raised $10 million in Series A funding. Investors include Lightspeed Venture Partners, Thiel Capital, Kleiner Perkins Caufield & Byers, Atomic, Craft Ventures, and Jerry Yang.
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HEALTH AND LIFE SCIENCES DEALS
PRIVATE EQUITY DEALS
• Kinderhook Industries recapitalized All States Ag Parts, a Downing, Wisc.-based supplier of used and remanufactured parts for tractors and ag equipment. Financial terms weren’t disclosed.
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• L Catterton Asia invested in Future Lifestyle Fashions Ltd, an India-based fashion company. Financial terms weren’t disclosed.
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• Electrocore, a Basking Ridge, N.J.-based vagus nerve stimulation therapy maker, filed for an IPO of up to $74.8 million. The firm posted sales of $811,500 in 2017. Core Ventures and Merck back the firm. Piper Jaffray, Evercore ISI, and JMP Securities are underwriters in the deal. The firm plans to list on the Nasdaq as “ECOR.” Read more. This item was updated with the correct sales amount.
• Adobe will acquire Magento Commerce, a Campbell, Calif.-based developer of cloud-based commerce solutions, for $1.68 billion. The seller was Permira. According to a person familiar with the situation, Permira acquired Magento from eBay for approximately $200 million. Magento’s return for Permira was more than 5x. Read more.
• Arlington Capital Partners agreed to sell Polaris Alpha, a Fredericksburg, Va.-based provider of missile solutions, to Parsons. Financial terms weren’t disclosed.
• Material Handling Systems, Inc. agreed to acquire VanRiet Material Handling Systems, Netherlands-based provider of integration systems, equipment, and after-market services solutions, from Avedon Capital Partners.
FIRMS + FUNDS
• Madrona Venture Group, a Seattle based early stage venture capital firm, raised $300 million for its seventh fund.
• Renaissance Venture Capital Fund, a Michigan-based venture capital fund-of-funds, raised $81 million of new capital.