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May 22, 2018
A PRIVACY MESS

Good morning, Term Sheet readers.

As part of the annual Fortune 500 issue, our staff published some captivating, long-form features, including ones on Amazon, Pfizer, and Xerox.

 
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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."

Read the full story here.

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THE LATEST FROM FORTUNE...

Meet NYSE's First Female President (by Hallie Detrick)

Regulators Crack Down on Crypto Scams via 'Operation Crypto-Sweep' (by Polina Marinova)

Japan's Biggest Bank to Switch on Blockchain Payments in 2020 (by Robert Hackett)

Bill Gates Recommends These 5 Books for Your Summer Reading (by Radhika Marya)

...AND ELSEWHERE

Sony is buying music publisher EMI for $2.3 billion. J.C. Penney's CEO just left to become CEO of Lowe's. Barack and Michelle Obama sign a production deal with Netflix. A Venezuelan Bitcoin miner on why he had to flee.

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VENTURE DEALS

Outreach, a Seattle-based customer engagement platform, raised $65 million in Series D funding. Spark Capital led the round, and was joined by investors including Sapphire Ventures, DFJ Growth, Four Rivers Group, Mayfield, MHS Capital, Microsoft Ventures and Trinity Ventures.

NewsDog, an India-based news app, raised $50 million in Series C funding. Tencent led the round.

Honor, a San Francisco-based home care company, raised $50 million in Series C funding. Naspers Ventures led the round.

TradingView, a Westerville, Ohio-based developer of social networking and data analysis tools intended for financial markets, raised $37 million in Series B funding. Insight Venture Partners led the round, and was joined by investors including Jump Capital and DRW Venture Capital.

Valimail, a San Francisco-based provider of email authentication services, raised $25 million in Series B funding. Tenaya Capital led the round, and was joined by investors including Shasta Ventures, Flybridge Capital Partners, and Bloomberg Beta.

StoreDot, an Israel-based charging battery developer for electric vehicles, raised $20 million in funding from BP Ventures.

Heal, a Los Angeles-based company with on-demand doctor house calls, raised $20 million in funding. Investors include Bascom Ventures, Inflection Capital, IRA Capital, RLJ Equity Partners, and Trans-Pacific Partners. 

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.

Tidelift, a Boston-based open source software company, raised $15 million in Series A funding. Investors include General Catalyst, Foundry Group, and Matthew Szulik.

theSkimm, a publisher of a daily newsletter, raised $12 million in Series C funding. Investors include Tyra Banks, Willow Bay, Jesse Draper, Shonda Rhimes, Linnea Roberts and Hope Taitz, Goldman Sachs Group, Inc. and Michael Karsch.

CREXi, a Marina Del Rey, Calif.-based  commercial real estate marketplace and technology platform, raised $11 million in Series A funding. Jackson Square Ventures led the round, and was joined by investors including Manifest Investment Partners, Lerer Hippeau Ventures, Freestyle Capital and TenOneTen Ventures.

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.

Luma Health, a San Francisco-based developer of a platform that connects patients with healthcare providers, raised $6.33 million in Series A funding. U.S. Venture Partners led the round, and was joined by investors including Stanford-StartX Fund.

HOOCH, a New York-based subscription cocktail app and hospitality platform, raised $5 million in seed funding. Revelis Capital Group and Blue Scorpion Investments co-led the round, and were joined by investors including Access Industries Holdings, Warner Music Group and FJ Labs.

Koru Kids, a U.K.-based after-school nanny matching service, raised £3.5 million ($4.7 million) in seed funding. Investors include Forward Partners and Albion Capital.

Vervoe, an Australia-based advanced interviewing platform, raised $3.5 million in funding. SEEK led the round.

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HEALTH AND LIFE SCIENCES DEALS

Scioto Biosciences, an Indianapolis-based developer of "innovative therapies to transform the delivery of microbiome therapeutics," raised $1.8 million in Series A funding. Investors include BioCrossroads, Elevate Ventures and Rev1 Ventures.

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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.

FTV Capital invested $35 million in Tango Card, a Seattle-based provider of digital incentives and rewards.

L Catterton Asia invested in Future Lifestyle Fashions Ltd, an India-based fashion company. Financial terms weren't disclosed.

Main Capital acquired a stake in SDB Ayton, a healthcare HR specialist. Financial terms weren't disclosed.

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IPOs

Far Point Acquisition Corp, a New York-based blank check company formed to acquire a company, or companies in the fintech space, filed for a $400 million IPO. Third Point backs the firm. Credit Suisse and BofA are underwriters in the deal. The company plans to list on the NYSE as "FPAC.U." Read more.

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 $811.5 million 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.

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EXITS

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.

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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.

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PEOPLE

David Cheng was promoted to vice president at DCM Ventures.

Genstar Capital promoted Geoff Miller to director and Rob Clark to 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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