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Term Sheet — Tuesday, November 11

Random Ramblings

Shirish Sathaye has become the newest general partner with Silicon Valley venture capital firm Formation 8, Fortune has learned. The move comes one year after Sathaye left Khosla Ventures, which he had joined in late 2010. Before that, he had spent nearly a decade with Matrix Partners.

Sathaye becomes the fourth member of the Formation 8 team with Khosla Ventures experience, following partner Jim Kim and senior advisors Gideon Yu and Pierre Lamond. He tells me that the original decision to leave Khosla – where his deals included NutaniX — was largely born of a desire to hop off the scripted career treadmill

“I took six months completely off, and then started investing a bit personally in a couple of companies and went on those boards. I wasn’t really looking to join another firm until Jim [Kim] called me and explained what Formation 8 was all about, and working with some of these people – both those I knew from Khosla and people like Joe Lonsdale – really intrigued me. Plus, it helped me realize that I was kind of bored of retirement… But this wasn’t a calculated decision. It just worked out this way.”

Sathaye formally began work at Formation 8 last week, and will be a general partner on the firm’s second fund (which, according to prior media reports, is targeting $500 million).

• More personnel scoop: Jonas Agesand has quietly left The Blackstone Group, where he had spent the past three years as a London-based managing director of investor relations and business development. His next stop will be rival private equity firm Warburg Pincus, where he is expected to serve in a similar position.

Agesand remains on the Blackstone website and he has not yet updated his LinkedIn profile. Prior to joining Blackstone in 2011, Agesand spent ten years at LGT Capital Partners, a Swiss firm where he led fund, secondary and co-investments for Northern Europe. Before that, he worked with Paris-based placement agent Triago. A Warburg Pincus spokeswoman declined to comment.

• Last one: Earlier this year we reported that Andrew Balson had stepped down as a managing director with Bain Capital, in order to form a new firm focused on smaller investments. His first hire was Lara Fox Moskowitz, who previously had spent four years as an investor relations pro for General Atlantic. Now comes word (and LinkedIn profile confirmation) that Moskowitz just joined Solamere Capital as director of business development and strategy. Awaiting return calls to figure out what this means for Balson’s fledgling effort.

•  Revel Systems, an iPad-based point-of-sale system for retailers, today announced that it has raised up to $100 million in Series C funding led by Welsh Carson Anderson & Stowe. The round includes an upfront $65 million investment from WCAS, plus $10 million from unnamed strategic investors and another $25 million equity line from WCAS. Two quick notes on the round, per a conversation with Revel co-founder and CEO Lisa Falzone:

  1. Revel opted for the equity line, rather than just $25 million extra up-front, in order to maintain dilution flexibility. The company is currently profitable, but plans to move into the red as it rolls out to some major new customers (announcements expected next week) and is unsure if the money will actually be needed.
  2. Part of the raise was used to cash out venture firm DCM, which had led Revel’s Series A round in 2011. Falzone says that she and DCM “just had different points of view of where to take the business,” but declined to get more specific. She also chose not to break out how much of the new round was secondary vs. primary. We reached out to DCM for its thoughts, but didn’t hear back.

• Recommended reading: Last week we noted how Uber CEO Travis Kalanick tried to interfere with a new funding round for rival Lyft, per a Vanity Fair article by Kara Swisher.  Now venture capitalist Fred Wilson — who doesn’t have a stake in either business — chimes in to call the tactics unethical, unsavory and ineffective. He writes: “When I get a phone call from a company telling me that they are going to raise more money and we should think about investing in them instead or at least not investing in their competitor, I hear fear and it makes me more excited about investing in the competitor.” You can read Wilson’s full post here, and please let me know your thoughts.

• Happy Veterans Day, and a heartfelt thank you to all who served and are serving. 


• Hortonworks, a Palo Alto, Calif.-based open-source platform for storing and analyzing big data, has filed for a $100 million IPO. It plans to trade on the Nasdaq under ticker symbol HDP, with Goldman Sachs listed as left-lead underwriter. Shareholders include Yahoo (19.6% pre-IPO stake), Benchmark (18.7%), Index Ventures, Teradata and Hewlett-Packard.

For 6 things to know about this IPO, please go here.


• Revel Systems, a San Francisco-based iPad-based point-of-sale system for retailers, has raised up to $100 million in Series C funding led by Welsh Carson Anderson & Stowe. The round includes an upfront $65 million investment from WCAS, plus $10 million from unnamed strategic investors and another $25 million equity line from WCAS.

 TransferWise, a London-based online currency exchange startup, is in talks to raise $50 million from Sequoia Capital at around a $1 billion valuation, according to the FT. The company previously raised around $32 million from Kima Ventures, Valar Ventures, SV Angel, IA Ventures, Index Ventures, Seedcamp and TAG. Read more.

• DogVacay, a Santa Monica, Calif.-based online and mobile pet services community, has raised $25 million in Series B-1 funding. Omers Ventures led the round, and was joined by GSV Capital and return backers Science Inc., First Round Capital, Benchmark, Foundation Capital, and DAG Ventures. Read more.

• La Lumiere LLC, a New York-based developer of a wearable light therapy mask, has raised $20 million in Series B funding. Johnson & Johnson Development Corp. led the round, and was joined by SWaN and Legend Venture Partners.

• Ambiq Micro, a Westlake, Texas–based provider of ultra-low power integrated circuits, has raised $15 million in Series C funding. Kleiner Perkins Caufield & Byers led the round, and was joined by return backers Austin Ventures, Mercury Fund and ARM Holdings.

• Forter, an Israel-based fraud prevention solution for online merchants that includes a real-time decision engine, has raised $15 million in Series B funding from New Enterprise Associates and Sequoia Capital.

• OrthoAlign Inc., an Aliso Viejo, Calif.-based maker of medical devices for orthopedic surgery, has raised $15 million in new VC funding from new investors River Cities Capital Funds and Mutual Capital Partners and unidentified existing shareholders.

•, a Dublin, Calif.-based provider of continuous cloud security technology for Amazon Web Services, has raised $9.85 million in Series A funding. Bain Capital Ventures led the round, and was joined by True Ventures.

• Cavendish Kinetics, a San Jose, Calif.-based provider of RF MEMS tuning solutions for mobile and wearable devices, has raised $7 million in Series A funding. Tallwood Venture Capital and Wellington Partners co-led the round, and were joined by Qualcomm Ventures,

• Ocho, a video-based social network for the iPhone, has raised $1.65 million in seed funding. Backers include Mark Cuban, Bill Lohse, Matt Brimer and Jiawei Wang.


• Avalara Inc., a Bainbridge, Island, Wash.-based provider of cloud-based software for sales tax and other transactional tax compliance, has raised $100 million in private equity funding from Warburg Pincus.

• Clear Channel Outdoor Holdings has received private equity interest for its European outdoor advertising business and is exploring a possible sale, according to Reuters. CVC Capital Partners is among those to have inquired about the assets, which could be valued at upwards of $3 billion. Clear Channel Outdoor is majority-owned by Bain Capital and Thomas H. Lee Partners. Read more.

• Liaison International, a Watertown, Mass.–based provider of admissions management solutions, has acquired Spectrum Edu Solutions, a Poughkeepsie, N.Y.–based provider of CRM and marketing solutions for higher education institutions. No financial terms were disclosed. Liaison shareholders include Polaris Partners and Warburg Pincus.

• New State Capital Partners has acquired United Medical Systems Inc., a Westborough, Mass.-based provider of mobile medical equipment and services for use in urology and other market segments in North and South America.

• Novolex, a Hartsville, S.C.-based portfolio company of Wind Point Partners, has agreed to acquire Packaging Dynamics, a Chicago–based maker of flexible packaging solutions, from Kohlberg & Co. No financial terms were disclosed. Harris Williams & Co. managed the process.

• Rhône Capital has agreed to acquire Global Knowledge, a Cary, N.C.-based corporate training company, from MidOcean Partners. No financial terms were disclosed.

• Swander Pace Capital has formed Clarion Brands Holding Corp. to acquire six niche OTC brands from Edison, N.J.-based DSE Healthcare Solutions. No financial terms were disclosed.

• Truven Health Analytics, an Ann Arbor, Mich.–based portfolio company of Veritas Capital Partners, has acquired Heartbeat Experts, a New York-based provider of stakeholder management solutions for the life sciences market, from shareholders like Partners For Growth. No financial terms were disclosed. Berkery Noyes managed the process for Heartbeat Experts.


• New Relic, a San Francisco-based provider of application performance management solutions for the enterprise, has filed for a $100 million IPO. It plans to trade under ticker symbol NEWR, with Morgan Stanley and J.P. Morgan serving as lead underwriters. The company reports a net loss of $19.4 million on $39 million in revenue for the six months of 2014 ending Sept. 30, compared to an $18.5 million net loss on nearly $22 million in revenue during the year-earlier period. New Relic has raised around $270 million in VC funding from Benchmark (22% pre-IPO stakjje), Trinity Ventures (13.6%), Insight Venture Partners (5.6%), Tenaya Capital (4.9%), BlackRock, Passport Capital, T. Rowe Price, Dragoneer Investment Group and Allen & Company.

• On Deck Capital Inc., a New York-based online platform for small business lending, has filed for a $150 million IPO. It plans to trade on the NYSE under ticker symbol ONDK, with Morgan Stanley listed as left lead underwriter. The company reports a $14.4 million net loss on nearly $108 million in revenue for the first nine months of 2014, compared to an $18.7 million net loss on $42 million in revenue for the year-earlier period. OnDeck has raised over $170 million in VC funding, from firms like RRE Ventures (15.4% pre-IPO stake), Institutional Venture Partners (14.4%), Village Ventures (10.8%), SAP Ventures (10.1%), First Round Capital (6.5%), Google Ventures (6.3%) and Tiger Global (6%). Read more.

• Peak Resorts, a Wildwood, Mo.-based ski resort operator, has set its IPO terms to 10 million shares being offered at between $9 and $11 per share. It would have an initial market cap of approximately $140 million, were it to price in the middle of its range. The company plans to trade on the Nasdaq under ticker symbol SKIS, with FBR, Stifel and Baird serving as lead underwriters. It reports around $25 million in EBITA and $105 million in revenue for the year ending April 30,

• Unique Fabricating Inc., an Auburn Hills, Mich.-based automotive die-cut fabricator of non-metallic materials, has set its IPO terms to 1.875 million shares being offered at between $8 and $10 per share. It plans to trade on the NYSE under ticker symbol UFAB, with Taglich Brothers serving as sole underwriter. Shareholders include Peninsula Capital Partners (21.34% pre-IPO stake).


• Daiichi Sankyo Co. (Tokyo: 4568) has completed its previously-announced $315 million, or $15 per share, cash purchase of Ambit Biosciences, a San Diego-based drug company whose lead candidate focuses on acute myeloid leukemia. Ambit shareholders included Foresite Capital (11.55% stake), Aisling Capital (9.18%), OrbiMed Advisors (8.28%), Apposite Capital (7.37%) andRoche Holding (5.96%).

• KKR is planning to sell the the North Dakota Bakken oil deposit assets it acquired as part of its $7.2 billion purchase of Samson Resources Corp. in 2011, according to Reuters. The deal would be worth less than $500 million, and comes as Samson tries to deal with falling energy prices. Read more.

• KPS Capital Partners has completed its previously-announced sale of Waupaca Foundry Inc., a Waupaca, Wis.-based iron foundry company, to Hitachi Metals Ltd. (TSE: 5486) for nearly $1.34 billion in cash. KPS originally invested $226 million in cash to acquire the company two years ago. Last year Waupaca paid out a $325 million dividend to shareholders, and this sale generated another $800 million in cash for shareholders.

• PDI Inc. (Nasdaq: PDII) has acquired RedPath Integrated Pathology Inc., a Pittsburgh-based cancer diagnostics company, from shareholders like NewSpring Capital, Inflexion Partners, CID and Seneca Health Partners. The deal was valued at upwards of $34.8 million (including a $12 million upfront payment). Back in 2010, RedPath had agreed to be acquired by France’s ExonHit Therapeutics SA, which later backed out of the deal.


• Fullscreen, a youth-focused YouTube network, has agreed to acquire Rooster Teeth, an Austin, Texas–based online creative studio and digital content brand. No financial terms were disclosed. Fullscreen was recently acquired by Otter Media, a joint venture between AT&T and the Chernin Group.

• LiquidHub, a Wayne, Penn.-based “digital integration” company, has acquired Foundry9, a New York-based digital marketing agency. No financial terms were disclosed. LiquidHub shareholders include ChrysCapital and PPM Americas Capital Partners. Foundry9 was advised on the sale by HeadwatersMB.

• MediaMath, a New York-based operating system for marketers and ad agencies, has acquired Rare Crowds, a Bellevue, Wash.–based developer of solutions to find solutions to find marketer-defined target audiences. No financial terms were disclosed. MediaMath has raised around $90 million in VC funding from Spring Lake Equity Partners, Akamai Technologies, Safeguard Scientifics, Catalyst Investors and Observatory Capital.

• Mindjet Corp., a San Francisco-based provider of “mind mapping” enterprise software, has secured $10 million in venture debt funding from Wellington Financial.

• Praesidian Capital has provided $7.45 million in first-lien debt to recapitalize House of Television Rentals Inc., a Jamestown, N.Y.-based chain of 12 “rent-to-own” home electronics and furniture stores.

• SHV Holdings has increased its acquisition offer for Dutch animal feed company Nutreco to €44.50 per share, or nearly €3 billion. That represents a 58% premium to Nutreco’s shares prior to SHV’s original offer, and also a slight bump to an indicative €43.20 per share bid from Cargill and Permira. Read more.


• Advent International is considering the opening of an office in Peru, according to Dow Jones. The Boston-based private equity firm last week announced that it had closed its latest Latin American fund with $2.1 billion in capital commitments.

• African Capital Alliance is raising upwards of $600 million for its fourth West Africa-focused growth equity fund, according to Dow Jones.

• Headland Capital Partners is raising upwards of $1 billion for its seventh Asia-focused private equity fund, and its first since spinning out from HSBC as an independent entity, according to Private Equity International.

• The Teachers’ Retirement System of Louisiana has agreed to make five new private equity fund commitments: $100 million to American Securities Partners VII ($4b target), $100 million to Kelso Investment Associates IX ($2.5b target), $50 million to Insight Venture Partners IX ($2.75b target), $50 million to H.I.G Bayside Loan Opportunity Fund IV ($1b target) and $50 million to NGP Natural Resources XI ($4.5b target). It also has made commitments to VC funds managed by Lightspeed Venture Partners, GGV Capital, JMI Equity, Khosla Ventures, Polaris Partners and Spark Capital.

• Wynnchurch Capital has closed its fourth mid-market private equity fund with $1.2 billion in capital commitments. The Chicago-based firm began fundraising in September with a $900 million target.


• Henry Juan has joined Young America Capital to lead a maritime and infrastructure investment banking practice. He previously was a managing director with Cypress Associates. Also joining the group will be Jakob Bergendorff (ex-head of M&A with Maersk Group) and JR Zambrotta (ex- DNB Markets).

• Piero Minardi has joined Warburg Pincus as a São Paulo-based managing director, with a focus on investments in Brazil and across Latin America. He previously was a partner with Gávea Investimentos.

• Felicia Smith has joined Highland Capital Management as a managing director, with a focus on business development for structured products. She previously was VP of capital markets for Santander Consumer USA.

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