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Term Sheet — Thursday, November 13

Random Ramblings

The latest issue of Fortune Magazine is out, with Larry Page on the cover as Businessperson of the Year. Also included is a feature I wrote on AngelList, which has quietly begun soliciting institutional capital for a series of AngelList-branded and managed funds.

My original interest in AngelList was piqued last month, when I heard that it had received some term sheets for new investment, but that CEO Naval Ravikant told the prospective investors that he also wanted introductions to their limited partners. As you might imagine, that stopped the conversations sold.

So I stopped by the company’s San Francisco offices, where Ravikant showed me a bunch of surprising “big” data that had never before been made public — in order to explain why the seed-stage platform was seeking deeper pockets as users. He also shared that AngelList soon plans to begin trying to monetize its “talent” section, which may ultimately generate more revenue than the investment section (perhaps requiring the company to eventually break in half).

You can read the full story here, but below are a few takeaways of note (including some items that didn’t make the final cut):

  • Since launching “syndicates” just over one year ago, AngelList has transacted around $87 million worth of deals, with monthly volume rising more than 300% between February and October. That puts AngelList at an annual run rate of $127 million, which theoretically would rank it among the country’s more active venture capital firms. And much more active in terms of deal number, which now totals around 40 per month.
  • The new series of funds each are designed to support syndicate investments in 100 startups. Jeff Fagnan, an AngelList board member, believes that, in a year for now, there will be enough investment activity through the platform that the funds “could, without a doubt, absorb a couple hundred million dollars of LP capital.”
  • The funds are designed not only provide institutional investors with a way to access seed at scale, but also to give syndicate leads more reliable capital (although fund LPs can opt-out of individual deals).
  • AngelList’s talent platform kind of works Tinder-style, connecting tech engineers with potential employers. It’s currently doing just under 5,000 matches per week, and more than 80,000 potential candidates have created profiles. There also are thousands of startups on the system — big companies also can participate (third-party recruiters cannot), although many don’t because AngelList requires them to list salary and equity ranges (Yahoo and Yelp are exceptions).
  • Expert the current talent system to remain free for candidates and companies, but AngelList will begin charging employers for value-added features like better candidate sorting and priority job placement.

• Update: Earlier this week we wondered about the future of a new private equity firm being launched by Andrew Balson, a longtime Bain Capital exec who still sits on the boards of such companies as Dominos, Bloomin’ Brands and FleetCor. Namely because Lara Fox Moskowitz, who Balson had hired away from General Atlantic, had taken a role with Solamere Capital.

Reached by phone, Balson confirms that the new firm is on indefinite hold. He says that he reconsidered if he wanted his “next chapter” to be another investment gig, and currently is sorting through his options.

• Flashback: Earlier this week, Bloomberg reported that comedy website Funny or Die has hired Moelis & Co. to explore a possible sale of the company, with an asking price of between $100 million and $300 million. Back in March, we interviewed early Funny or Die investor Mark Kvamme about the company’s future.  Here’s an excerpt:

Fortune: It’s been nearly seven years since Sequoia first invested in Funny Or Die. How does it eventually exit?

Mark Kvamme: A lot of Silicon Valley guys don’t understand the value of content. Take Between Two Ferns. We’ve probably shot between 16 and 18 episodes, and people keep watching episodes we filmed a couple of years ago. In fact, around 50% of our traffic is for content we own and invested in a long, long time ago. It’s kind of like a studio model with a back catalog, where the content value continues to increase.

It’s going to turn out to be a very good investment for Sequoia… Not a WhatsApp sort of multi-billion dollar exit, but a nice multi-hundred million dollar exit sometime.

Fortune: Most likely to an established entertainment company?

Mark Kvamme: Probably, yes.

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THE BIG DEAL

• Churchill Downs Inc. (Nasdaq: CHDN) has agreed to acquire Big Fish Games, a Seattle-based online marketplace and creator of casual mobile and web- based games, for upwards of $885 million (including a $485 million up-front payment). Big Fish Games had raised over $90 million in VC funding from firms like Balderton Capital, General Catalyst Partners and Salmon River Capital.  Read more.

VENTURE CAPITAL DEALS

•Scopely, a Culver City, Calif.-based mobile entertainment network, has raised $35 million in Series A funding co-led by Evolution Media Partners and Highland Capital Partners. The company previously raised more than $8 million in seed funding. Read more.

• Monteris Medical Corp., a Plymouth, Minn.-based developer of minimally-invasive laser systems for the ablation of pathologic brain lesions, has raised approximately $30 million in Series B funding. Birchview Capital led the round, and was joined by The Vertical Group and return backer BDC Capital Healthcare Fund. www.monteris.com

•  Gogobot, a Menlo Park, Calif.-based personalized travel recommendation site, has raised $20 million in Series C funding. HomeAway (Nasdaq: AWAY) led the round, and was joined by return backers Redpoint Ventures and Battery Ventures. As part of the deal, HomeAway CEO Brian Sharples will join the Gogobot board of directors.www.gogobot.com

 

• HealthCare.com, a Miami- based healthcare pricing and meta-search engine, has raised $7.5 million in Series A funding. Jeffrey Boyd (CEO of Priceline) led the round, and was joined by People Fund. www.healthcare.com

• Symbiota, a Cambridge, Mass.-based developer of microbial solutions to promote plant health and improve agricultural production, has raised $7.5 million in Series A funding from Flagship Ventures. www.SymbiotaBio.com

• Indice Semiconductor, a Tualatin, Ore.-based provider of mixed-signal power control and conversion ICs, has raised $6 million in Series A funding. Backers include Australian venture firm Rampersand and Pixelworks co-founder Allen Alley. www.indicesemi.com

• Quandl Inc., a Toronto-based online marketplace for financial and economic data, has raised $5.4 million in VC funding, according to VentureWire. www.quandl.com

• Metal Networks, a Houston-based provider of software for buying and selling semi-finished industrial metal, has raised $5 million in Series A funding led by S3 Ventures. www.metalnetworks.com

• Trecker.com, a Berlin-based SaaS platform for farm and agriculture business processes, has raised €2.1 million in Series A funding led by Target Partners. www.trecker.com

• Thefahion.com, a Copenhagen-based ecommerce aggregator in the fashion space, has raised $1.7 million in VC funding from North East Venture Capital and The Danish Growth Fund. www.thefashion.com

• VIDA, a San Francisco-based ecommerce platform focused on the apparel market, has raised $1.3 million in seed funding. Backers include Google Ventures, The Valley Fund, Slow Ventures, Beehive Holdings, Nanon and Jesse Draper. Read more.

PRIVATE EQUITY DEALS

• The Carlyle Group is interested in buying at least some of the assets being put up for sale by UK outsourcing company Serco Group PLC, according to Sky News. Among Serco’s planned disposals are BPO company Intelenet and customer contact services business The Listening Co. Read more.

• Data Dimensions, a Janesville, Wis.-based provider of healthcare-related business process outsourcing and automation services, has raised an undisclosed amount of private equity funding from HealthEdge Investment Partners. www.datadimensions.com

• Full Spectrum Laser LLC, a Las Vegas-based laser and 3D printer engineering and manufacturing company, has raised $10 million in growth equity funding from Summer Street Capital. www.fsl3d.com

• Golden Gate Capital has agreed to acquire Angus Chemical Co. from Dow Chemical Co. (NYSE: DOW) for $1.215 billion. Other suitors reportedly had included Onex Partners and Metalmark Capital. www.dow.com/angus

• Philips NV has received indicative offers from several private equity firms for a majority of its lighting components business, which could be valued at between €2.5 billion and €3 billion, according to Reuters. Bidders reportedly include Bain Capital, CVC Capital Partners, Clayton Dubilier & Rice, KKR and Onex Partners. Read more.

• Ryckman Creek Resources LLC, a majority-owned subsidiary of Peregrine Midstream Partners LLC, has secured $110 million in financing to complete a new gas storage facility in southwestern Wyoming. The capital was provided by Peregrine owner EQT Infrastructure and a bank consortium led by ING Capital. www.peregrinempllc.com

• TPG Capital reportedly has agreed to acquire a $2 billion portfolio of U.S. commercial real estate loans from Deutsche Bank. Read more.

IPOs

• Intrepid Aviation Ltd., a Stamford, Conn.-based passenger aircraft leasor, has filed for a $150 million IPO. It plans to trade on the NYSE under ticker symbol INTR, with Goldman Sachs, BofA Merrill Lynch and Deutsche Bank Securities serving as lead underwriters. Shareholders include Reservoir Capital Group and Centerbridge Partners. www.intrepidaviation.com

• PRA Health Sciences Inc., a Raleigh, N.C.-based contract research organization for the biotech and pharma markets, raised $306 million in its IPO. The company priced 17 million shares at $18 per share, compared to plans to offer 18.6 million shares at between $20 and $23 per share (the extra shares were to have been offered by company owner KKR, which opted not to sell). PRA will trade on the Nasdaq under ticker symbol PRAH, while Jefferies served as left lead underwriter. It reports a $14 million net loss on $712 million in revenue for the first six months of 2014. www.prahs.com

EXITS

 Cox Automotive has acquired Xtime, a Redwood Shores, Calif.–based provider of vehicle service and repair software for auto dealerships, for $325 million. XTime had raised around $28 million in VC funding from firms like DFJ, RPM Ventures, Bessemer Venture Partners, Lumia Capital and Saints Capital. www.xtime.com

• Kindred Healthcare Inc. (NYSE: KND) has agreed to acquire Centerre Healthcare Corp., a Franklin, Tenn.–based operator of inpatient rehabilitation hospitals, for approximately $195 million in cash. Sellers include River Cities Capital Funds, RiverVest Venture Partners, Sightline Partners, Pacific Venture Group, Sterling Partners and Three Arch Partners. www.centerrehc.com

• Lindsay Goldberg has hired Macquarie to find a buyer for German packaging company Weener Plastik, according to Reuters. The deal could be valued at around €400 million. Read more.

OTHER DEALS

• 4:33 Creative Lab, a Korean gaming studio, has raised $110 million in equity funding from China’s Tencent and Japan’s Line. Read more.

• BB&T Corp. (NYSE: BBT) has agreed to acquire Lititz, Penn.-based retail and commercial bank Susquehanna Bancshares (Nasdaq: SUSQ) for $2.5 billion in cash and stock, or approximately $13.50 per share. Read more.

• Berkshire Hathaway has agreed to acquire the Duracell battery business from Procter & Gamble (NYSE: PG). Under terms of the deal, P&G would contribute $1.7 billion in cash to Duracell, and will receive approximately $4.7 billion of P&G stock currently held by Berkshire Hathaway. Read more.

• Dubai Ports World has agreed to acquire Economic Zones World, a Dubai-based operator of industrial parks and commercial zones like the Jebel Ali Free Zone near DP World’s Jebel Ali port. The deal is valued at $2.6 billion, including debt. Read more.

• Hasbro (Nasdaq: HAS) reportedly is in talks to acquire DreamWorks Animation (Nasdaq: DWA), which has a current market cap of around $1.9 billion. Read more.

FIRMS & FUNDS

• The Pennsylvania Public School Employees’ Retirement System has hired Cogent Partners to manage a secondary sale of around $2 billion worth of private equity fund stakes, according to Bloomberg. Read more.

• Yukon Partners, a Minneapolis-based mezzanine investment firm, has closed its second fund with $400 million in capital commitments. www.yukonpartners.com

MOVING IN, UP, ON & OUT

• Adam Boyden has joined Ann Arbor, Mich.-based VC firm RPM Ventures as a managing director. He is the former CEO of OpenLane (acquired by Kar Auction Services) and had been serving as an advisor to RPM (leading its investment in Social Finance, where he later became COO). www.rpmvc.com

• President Obama plans to nominate Antonio Weiss, head of global investment banking at Lazard, as the next U.S. Treasury undersecretary for domestic finance. Read more.

• Welsh, Carson, Anderson & Stowe has added three new “senior industry executives.” They are: Ian MacLeod, former partner and head of global software and services with Qatalyst Partners; Sandeep Sahai, former president and CEO of WCAS portfolio company Headstrong; and Rick Willett, former president and CEO of Ascend Learning. www.wcas.com

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