Random Ramblings
“Why can’t you just wait for a baked potato?”
That was my grandmother speaking to my father, probably in 1984 or 1985. He had been trying to convince her to purchase (and use) a microwave oven. She wasn’t having it. Not so much because of radiation fears, but rather because a baked potato was supposed to take nearly one hour to cook in a conventional oven. She eventually relented. Got a remote control for the TV too.
I was reminded of this yesterday when reading Liz Gannes's discussion of the instant gratification economy, otherwise known as the “Uber for X” phenomenon. The notion of ‘on-demand’ shifting from the virtual to the physical. She wonders if it’s just a VC-blown Bay Area bubble, or if ordinary America is on the verge of a mobile-induced lifestyle change.
There also have been various stories over the past few months about how all of this is a reflection of our collective laziness. Or of short attention spans. Or of millennial self-indulgence.
But it doesn’t seem to me that today’s ‘instant gratification’ technologies are scratching any different itch than did that microwave oven or remote control. Let alone the airplane, automobile, dishwasher, gas grills, McDonald’s, word processing software or countless other innovations that have become part of almost everyone’s daily lives.
The most pervasive consumer tech advancements always have been about speed and efficiency. Nearly two decades before Fidelity Investments pumped hundreds of millions of dollars into Uber, the firm created black car service Boston Coach. Same pain point and founding rationale, just executed differently. Did people worry when Boston Coach launched that we were too lazy to wait for a taxi outside of the airport, or so isolated that no friends or family were willing to pick us up? And, if so, is there anyone today who still would decry call-ahead airport pickup services?
As time becomes a more and more precious commodity — particularly with technology blurring many of our home/work lines of demarcation — it isn’t surprising that we continue to ask technology to take over some of our more mundane tasks (particularly if that technology creates new service jobs). Yes, there can be inherent value in doing things for yourself, but there also can be more value in spending 15 extra minutes in the office or playing with your kid or sleeping. Picking up your own dry-cleaning isn’t exactly the same as learning to fish.
Which brings us back to my grandmother. Or actually my grandfather, in this case. When he was a first-generation American teenager in the 1930’s, he worked in his dad’s small grocery store. One of his jobs was to take telephone orders from customers, and then walk (or possibly bike) the orders to customer homes. Things are changing. But not quite so much as we might all think…
• Book-keeping: Whenever we deal with carried interest alterations in this space, it’s usually within the context of taxation. But there now is talk that there could be some changes to how carried interest is treated from an accounting standpoint, which could impact publicly-traded private equity firms.
Ratings firm Fitch yesterday noted that the FASB and IASB have jointly developed new standards that may eventually apply to private equity, by requiring firms to recognize carried interest as revenue only after clawback risk has been eliminated. Fitch says that if the standards are indeed applied to private equity – in 2017 at the earliest – it would not expect the change to have an impact of its ratings for listed PE issuers, and that it could result in more consistent reporting across PE firms.
• Update: Yesterday we reported that Will Kohler was leaving Summerhill Venture Partners to join Lightspeed Venture Partners as a partner (a switch which required him to move from Boston to Silicon Valley). So what does this mean for Summerhill, which had spun out of Canadian telecom giant BCE back in 2007. The firm had been in market with its second independent fund - even securing some commitments -- but partner Gary Rubinoff says that fundraising is now on hold as Summerhill instead focuses on portfolio maximization.
THE BIG DEAL
• Juno Therapeutics, a Seattle-based developer of immunotherapies for cancer, has raised $134 million in Series B funding from “ten public mutual funds and healthcare-focused funds.”
The company previously raised $176 million from ARCH Venture Partners, Alaska Permanent Fund, Bezos Expeditions and Venrock. Juno’s strategic partners are The Fred Hutchinson Cancer Research Center, Memorial Sloan-Kettering Cancer Center and the Seattle Children's Research Institute. www.junotherapeutics.com
VENTURE CAPITAL DEALS
• BitGlass, a Campbell, Calif.-based provider of enterprise mobile cloud security solutions, has raised $25 million in Series B funding. SingTel Innov8 was joined by return backers Norwest Venture Partners and NEA. www.bitglass.com
• Smaato, a San Francisco-based provider of mobile advertising and ad optimization solutions, has raised $25 million in new VC funding. Singapore Press Holdings led the round, and was joined by return backers Aeris Capital and EDBI. www.smaato.com
• Vectra Networks Inc., a San Jose, Calif.-based cybersecurity startup, has raised $25 million in Series C funding, according to Dow Jones. Accel Partners led the round, and was joined by Intel Capital, Juniper Networks and return backers Khosla Ventures, IA Ventures and AME Cloud Ventures participated. Read more
• Verdasys, a Waltham, Mass.–based provider of data protection for endpoints for Global 2000 companies, announced that it is nearing the completion of a new $20 million funding round (it previously announced a $12 million first close from GE Pension Trust, Fairhaven Capital and Brookline Venture Partners). The company also is re-branding as Digital Guardian. www.verdasys.com
• Metanautix Inc., a Palo Alto, Calif.-based provider of big data management and analytics, has raised $7 million in new VC funding led by Sequoia Capital. www.metanautix.com
• Wilcard (f.k.a. Coopkanics), a New York-based “seamless replacement for the Internet on your phone,” has raised $7 million in second-round funding, according to a regulatory filing. The company was formed last year by Jordan Cooper and Doug Petkanics, co-founders of Hyperpublic (acquired by Groupon). Gary Vaynerchuk was joined by return backers General Catalyst Partners and Lerer Ventures. www.trywildcard.com
• Flexwage Solutions, a Mountainside, N.J.-based provider of payroll card solutions, has raised $3.5 million in growth equity funding from undisclosed “investment firms and high net-worth financial technology executives.” www.flexwage.com
• TesoRx Pharma LLC, a Menlo Park, Calif.-based drugmaker whose first product is an oral formulation of unmodified testosterone, has raised $10 million in Series B-1 funding. No investor information was disclosed. www.tesorx.com
• Transatomic Power, a Cambridge, Mass.-based nuclear reactor designer, has raised $2 million in VC funding from FF Science. www.transatomicpower.com
• Andrew Alliance, a Swiss robotics company focused on the life sciences market (including a robotic lab ‘co-worker’), has raised an undisclosed amount of Series B funding from Omega Funds. The company also announced that it will be opening a Boston office. www.andrewalliance.com
PRIVATE EQUITY DEALS
• Blue Point Capital Partners has acquired Onamac Industries Inc., a maker of machined components and assemblies to the aerospace and defense industries. No financial terms were disclosed. Onamac will be part of Blue Point platform Selmet, an Albany, Ore.-based maker of titanium castings supplier for the aerospace and defense industries. www.onamac.com
• Hellman & Friedman has agreed to acquire ABRA Auto Body & Glass, a Brooklyn Park, Minn.–based provider of damaged vehicle repair services, from Palladium Equity Partners. ABRA senior management also participated on the buy-side. No financial terms were disclosed. www.abraauto.com
• IGM Resins Inc., a Charlotte, N.C.-based provider of products and services to the UV ink and coatings industry, has acquired Insight High Technology Group, a Chinese manufacturer of photoinitiators, pharmaceutical intermediates and fine chemicals. No financial terms were disclosed. IGM Resins is a portfolio company of Arsenal Capital Partners. www.igmresins.com
• Polaris Partners has acquired a majority stake in Strata Health Solutions, a provider of e-referral and intelligent resource matching technology for improving patient flow within health systems. No financial terms were disclosed. Strata Health has offices in the UK and Canada. www.stratahealth.com
• VanDeMark Chemical Inc., a Lockport, N.Y.-based maker of phosgene and phosgene derivatives, has acquired Framochem Kft, a Hungary-based manufacturer of phosgene products. No financial terms were disclosed. To finance the acquisition VanDeMark raised new equity funding from Uni-World Capital (existing sponsor), Prudential Capital Group, Hamilton Lane and Madison Capital Funding. It also secured senior debt financing from Madison Capital Funding and Sumitomo Mitsui Banking Corp. and mezzanine financing from Prudential Capital Group. www.vdmchemical.com
IPOs
• Auris Medical Holding, a Swiss pharma company focused on inner ear disorders, has amended its IPO terms to 9.4 million shares being offered at $6 per share. It previously filed to offer 6.9 million shares at between $10 and $12 per share. The company plans to trade on the Nasdaq under ticker symbol EARS, with Jefferies and Leerink Partners serving as lead underwriters. Shareholders in the pre-revenue company include Sofinnova Venture Partners (19.3% pre-IPO stake), Sofinnova Capital (18.6%), Adamant Global Generika Funds (11.4%) and Idinvest Partners (9.1%). www.aurismedical.com
EXITS
• Beanstock Media has agreed to acquire New York-based ad-tech company Onswipe, according to Fortune’s Erin Griffith. A formal announcement could come as soon as tomorrow. Onswipe had raised VC funding from such firms as Spark Capital and QED Capital. Read more.
• ComScore (Nasdaq: SCOR) has acquired MdotLabs, a Madison, Wis.–based SaaS platform for identifying malicious activity related to Web and mobile advertising. No financial terms were disclosed. MdotLabs had raised a small amount of VC funding from Great Oaks Venture Capital and Chicago Ventures. www.mdotlabs.com
• The Riverside Company has sold UltraVolt, a Ronkonkoma, N.Y.–based maker of DC-to-DC high-voltage power converters, to Advanced Energy Industries Inc. (Nasdaq:AEIS) for $30.2 million in cash. www.ultravolt.com
• Roche (SWX: ROG) has agreed to acquire Santaris Pharma AS, a Danish developer of RNA-targeted therapies, for upwards of $450 million (including a $250m upfront cash payment). Shareholders in Santaris include Gilde Healthcare Partners, BankInvest, Forbion Capital Partners, Global Life Science Venture, Innovation Capital, Novo LD, Omega, Seventure and Sunstone Capital.www.santaris.com
• Sensata Technologies Holding (NYSE: ST) has acquired DeltaTech Controls, a Berlin, Germany-based provider of customized electronic operator controls based on magnetic position sensing technology, from CoActive Technologies, a Hong Kong-based portfolio company of Littlejohn & Co. No financial terms were disclosed. Littlejohn will continue to own CoActive’s other operating unit, C&K Components. www.coactive-tech.com
• Valeant Pharmaceuticals International Inc. (NYSE: VRX) has completed its previously-announced acquisition of PreCisionDermatology Inc., a Cumberland, R.I.-based provider of dermatology products. The deal is valued at upwards of $500 million, including a $475 million up-front cash payment. PreCision had raised around $60 million in VC funding following its spinout from Collegium Pharmaceuticals, from such firms as Aisling Capital, NovaQuest Capital Management, Essex Woodlands, MidCap Financial, Frazier Healthcare and Boston Millennia Partners. www.precisionderm.com
OTHER DEALS
• Gannett (NYSE: GCI) announced plans to spin off its publishing assets – including USA Today – from its digital and broadcasting businesses. Read more.
• LINN Energy LLC has agreed to acquire producing assets in the Hugoton Basin from Pioneer Natural Resources Co. (NYSE: PXD) for $340 million. www.linnenergy.com
• Premier Inc. (Nasdaq: PINC) has acquired TheraDoc, a provider of electronic clinical surveillance solutions, from Hospira (NYSE: HSP). The deal was valued at $117 million in cash, which is a multiple of between 10x and 11x on TheraDoc’s trailing 12-month operating earnings. www.theradoc.com
• RelaDyne, a Sharonville, Ohio–based portfolio company of AEA Investors, has acquired Turbo Filtration Corp., a Mobile, Ala.–based provider of industrial reliability services to the turbine and industrial reliability market. No financial terms were disclosed. www.reladyne.com
• Strategic Value Partners has agreed to sell VESTOLIT GmbH, a German producer of paste PVC for automotive flooring and underbody protection, to Mexichem for €219 million in cash and assumed liabilities.
• Telefónica (CATS: TEF) has offered to acquire Global Village Telecom, the Brazilian business of Vivendi SA (Paris: VIV), for approximately $8.9 billion in cash and stock. Read more.
FIRMS & FUNDS
• ACON Investments has closed its fourth Latin America middle-market private equity fund with $515 million in capital commitments. www.aconinvestments.com
• The California Public Employees’ Retirement System and UBS Global Asset Management (Americas) have formed Golden State Matterhorn LLC, a $500 million platform that will “pursue infrastructure investment opportunities across core, OECD markets.” CalPERS will provide $450 million, while UBS will provide $15 million and manage the investments. www.ubs.com
• Guardian Capital Partners, a Wayne, Penn.-based private equity firm focused on the lower middle markets, has closed its second fund with $153.5 million in capital commitments. www.guardiancap.com
• Mid Europa Partners, a private equity firm focused on Central and Eastern Europe, has closed its fourth fund with €800 million in capital commitments (compared to a €1 billion target). It also has secured another €650 million in co-investment commitments from a group of 25 limited partners. www.mideuropa.com
• Northern Lights Capital Group, a private equity firm with offices in Seattle and Denver, has agreed to merge with Treasury Group Ltd. (ASX: TRG), in order to create a jointly-owned company that will “provide strategic support to boutique asset managers worldwide.” www.nlcg.com
• Wynnchurch Capital, a Rosemont, Ill.-based private equity firm focused on the middle markets, is planning to raise upwards of $1 billion for its fourth fund, according to peHUB. www.wynnchurch.com
MOVING IN, UP, ON & OUT
• 2x Consumer Products Growth Partners has promoted Michael Apostal to vice president. He had joined the firm last year from Houlihan Lokey. www.2xpartners.com
• Battery Ventures has promoted both Alex Benik and Brian Lieber from principal to partner. Benik joined the firm in 2001 and focuses on enterprise tech opportunities. Lieber joined in 2014 and focuses on buyout opportunities. Battery also promoted vice president Morad Elhafed to principal. www.battery.com
• Pang Lee has joined law firm Cooley LP as a Shanghai-based partner in the firm’s global private investment funds group. He previously was counsel in the asset management group of Shearman & Sterling’s Hong Kong office. www.cooley.com
