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March 25, 2019
FINANCIAL SNACKS

Robinhood, a no-fee trading stock trading startup, just made its first acquisition, and it's a millennial-focused media company called MarketSnacks.

This purchase may seem odd for the fintech giant valued at more than $5 billion, but it makes sense given Robinhood's increased push to become one-stop shop for a young investor's needs.

 
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"We improved ​market news​ coverage on our platform, added discovery tools on mobile, and revamped our Help Center to better answer your questions," Josh Elman, Robinhood's VP of product, writes in a blog post. "Robinhood Snacks is a major step towards building out these resources and helping you get more informed on market news."

MarketSnacks, a daily podcast and newsletter, focuses solely on finance, featuring a funny photo and humorous analysis on three to four news items each morning. Now, the newsletter will re-brand to "Robinhood Snacks" and the podcast to "Snacks Daily" with exposure to the company's existing user base of more than 6 million users as well as the general public. MarketSnacks co-founders Nick Martell and Jack Kramer will join Robinhood as managing editors of news and continue to produce the daily news offerings.

"Robinhood approached us and told us that their users were craving easily digestible and accessible business news," Martell told Fortune. "Robinhood's done an amazing job at breaking down barriers of financial services and financial products, but users still need good information to participate and be well-informed."

Robinhood declined to disclose the terms of the deal and did not provide growth metrics for the newsletter. MarketSnacks had "tens of thousands of subscribers" two years ago when I last interviewed the founders.

Founded in 2012, MarketSnacks started as a creative outlet outside of the founders' full-time jobs on Wall Street. After the markets closed, Martell and Kramer would text each other about what they'd include in the following morning's newsletter. They then divvied up the sections of the newsletter and took turns editing it each day.

I first subscribed to MarketSnacks in 2014 when I was working at a startup in New York City. I was 22 years old, and my boss recommended a few financial newsletters that were easy to understand. I fit squarely into MarketSnacks' target demographic as their average user is in their 20s, with 85% of their subscriber base under the age of 36. Roughly half of the newsletter readers are women. Robinhood has a somewhat complementary demographic with its average user being 32 years old and 50% of their customer base being first-time investors.

The newsletter strikes a light-hearted tone while tackling subjects like initial public offerings, acquisitions, and quarterly earnings. The goal is to translate financial news to anyone — even if they don't work on Wall Street. For instance, rather than saying Chipotle missed on earnings, you'll read something like, "Everyone has that friend who lamely chooses ‘burrito bowl' over ‘burrito.' The latest earnings from Chipotle were like that friend."

"We make what can be dry and boring really fun and relatable," Kramer said. "We believe humor is a great tool in making things memorable for people just getting into the financial world."

Last year, Martell and Kramer quit their jobs to focus on their venture full time and raised funding of an undisclosed amount from Rough Draft Ventures. They also struck syndication deals with clients such as Fidelity Investments and made media appearances on financial news outlets. Robinhood approached the founders this summer and sponsored the newsletter, which ultimately led to an acquisition offer.

"A core element here is that ‘Robinhood Snacks' will have editorial independence from the rest of Robinhood," Martell said. "We are committed to a set of editorial principles, just like any committed news organization."

I've written previously about the murky territory tech companies have to navigate when they wade into the business of content. Although Martell and Kramer insist that MarketSnacks will maintain editorial independence from Robinhood, when presented with the following scenario, those lines get blurry. I asked — if Robinhood goes public and the IPO doesn't go so well, how will you present the event in the newsletter? "The inherent conflict of interest in that case is so strong, we're not going to cover Robinhood at all, but we will cover everything else with editorial independence," Kramer said.

But an important distinction is that Robinhood isn't launching a publication. It sees the MarketSnacks acquisition as a value proposition to existing and future Robinhood customers. Subscribers to the newsletter don't have to be a user of any Robinhood products.

The other interesting part of this deal is that Robinhood will also scoop up the MarketSnacks podcast, which offers a breakdown of the top three business stories of the day in 15 minutes. The news comes after Spotify bought podcasting startups Gimlet Media and Anchor for a combined $340 million.

"I think podcasting has a huge growth trajectory — the engagement is insane," Martell said. "To us, this exit is a testament to the power of combining a tech company's resources with the trust and value of a media platform."

Read this story on Fortune.com

PINTEREST FILES FOR IPO: Pinterest filed documents to go public late Friday. The company saw revenue grow 60% to $755.9 million last year, posting a net loss of $63 million, or 17 cents per pre-IPO share. At the end of 2018, Pinterest reported 265 million users and more than 175 billion "pins" saved to its platform. Read more at Fortune.

UBER DEAL:  Uber will announce a $3.1 billion cash-and-share deal to acquire its Dubai-based rival Careem Networks as early as this week, according to Bloomberg. Uber will reportedly pay $1.4 billion in cash and $1.7 billion in convertible notes for Careem. Read more.

TACKLING DISCRIMINATION: My colleague Emma Hinchliffe profiled Simone, a small, very early-stage startup that's working to connect people in crisis at work with attorneys, and eventually, with therapists and career coaches. Unlike some of the companies in its cohort, Simone's focus is less on the acute problem of sexual harassment, and more on the murkier area of workplace discrimination. Read more at Fortune.

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VENTURE DEALS

Tinkergarten, a company that offers outdoor play-based learning classes and activities for kids raised $21 million in funding, from WndrCo.

Skymind, a San Francisco-based business intelligence and enterprise software company, raised $11.5 million in Series A funding. TransLink Capital led the round, and was joined by investors including ServiceNow, Sumitomo's Presidio Ventures, UpHonest Capital, and DCode with GovTech Fund. Existing investors Y Combinator, Tencent, Mandra Capital, Hemi Ventures, and GMO Ventures, also participated.

Mursion, a startup that provides immersive VR training for the workplace, raised $8 million in Series A funding. New Markets Venture Partners led the round, and was joined by investors including the Schusterman Family Investment Office, Zoma Capital, New Schools Venture Fund, Propel Capital, Figure 8 Investments, and the Strada Education Network.

Gjirafa, an Albanian language search engine, raised $6.7 million in Series B funding, from Rockaway Capital.

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HEALTH AND LIFE SCIENCES DEALS

Evox Therapeutics Ltd, a U.K.-based exosome therapeutics company, raised 1.5 million pounds ($1.98 million) in funding. Investors include Innovate UK.

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PRIVATE EQUITY DEALS

A private equity-led consortium agreed to buy Inmarsat Plc (LSE:ISAT) for about $3.4 billion in cash. The consortium includes Apax Partners, Warburg Pincus and Canada Pension Plan Investment Board and Ontario Teachers' Pension Plan Board.

Onex Corp agreed to acquire Gluskin Sheff (TSX:GS) for C$14.25 per share or about C$445 million ($331.8 million).

SCA Performance, Inc, a portfolio company of Kinderhook Industries, acquired Rocky Mountain Truckworks, an OEM authorized specialty vehicle manufacturer for light-duty trucks.

FOS Capital Partners made an investment in Interscope, Inc, a medical device company. Financial terms weren't disclosed.

Ambiente Holdings, a portfolio company of Fountain Square Industries, acquired Jeroboam Fine Wine, a Dallas-based wine distributor. Financial terms weren't disclosed.

Hunt Capital Holdings acquired Peak 8 Asset Management, a Greenwich, Conn.-based asset management firm. Financial terms weren't disclosed.

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IPOs

Tradeweb Markets, a New York-based electronic trading platform, plans to raise $683 million IPO of 27.3 million shares priced between $24 to $26. Thomson Reuters and Blackstone back the firm. J.P. Morgan, Citi, Goldman Sachs and Morgan Stanley are underwriters. It plans to list on the Nasdaq as "TW." Read more.

Zoom Video Communications, a San Jose, Calif.-based video conferencing system, filed for a $100 million IPO. It posted revenue of $330.5 million in the year ending 2019 and income of $7.6 million. Emergence Capital, Sequoia, and Li Ka-shing back the firm. Morgan Stanley, J.P. Morgan, Goldman Sachs, and Credit Suisse are underwriters.

Naspers, a South African internet firm, is planning an IPO of part of its e-commerce business in Amsterdam. Read more.

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EXITS

Thermo Fisher Scientific Inc will buy Brammer Bio, a Cambridge, Mass.-based developer of cell and gene therapies, for approximately $1.7 billion in cash. Ampersand Capital Partners is the seller.

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FIRMS + FUNDS

OMERS Ventures, a Canada-based venture capital firm, raised €300 million ($339 million) for its latest fund.

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PEOPLE

SoftBank Group Corp promoted Lydia Jett to partner at the SoftBank Vision Fund. Read more.

Beth Pickens joined TSG Consumer Partners as a principal.

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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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