Hello, Erin Griffith here filling in while Dan is on vacation. Please direct your story tips, deal announcements and feedback to email@example.com. I’m also on Twitter at @eringriffith.
• The eyeballs business: We’re in the middle of earnings season for the big tech companies, and I’m paying attention to mobile advertising revenue. Facebook has figured it out, thanks in large part to app-install ads from gaming companies. Twitter will say it’s been mobile-first all along. Yahoo continues to make the case it has figured it out, bringing in 22% of its ad revenue from mobile last quarter. And Google, coming from behind, showed a lot of promise earlier this week.
But I can’t help thinking about comments that Facebook COO Sheryl Sandberg likes to make around Facebook’s share of ad spending. She argues that there’s a disconnect between the percentage of time people spend on Facebook and the percentage of money advertisers allocate to the platform. Eventually, the argument goes, that disconnect will correct itself.
Yesterday I realized that argument sounded familiar because it’s the same argument Yahoo made back in the 2000’s about all of digital advertising. Advertisers will see the error of their ways and distribute money according to time speny eventually! The problem is, we’re still waiting for the ad dollars to equal the time spent. Last year digital advertising made up around 30% of all advertising, bringing in $30 billion less than TV ads.
Search remains the most profitable and effective digital ad format and it takes the least amount of time. (Four percent of our time spent online, in fact.) Now Google is trying to figure out how to win search in a format where almost everything we do happens inside apps, not searching on the mobile Web, and people searching for things don’t convert to buyers as frequently.
Google’s answer seems to be video. The company touted impressive growth in “watch time,” on YouTube last quarter, which doubled on mobile over last year. Google is not alone in this thinking — last night Andreessen Horowitz Partner Chris Dixon chimed in on Twitter that “online video could fix” the disconnect. Facebook, with its big video push, and Snapchat, with its Discover tab, are clearly hoping for the same.
• Playing defense: There are plenty of reasons startups shouldn’t go for the highest possible valuation when raising money, especially in the early stages. It can make future rounds harder to raise, it can create unrealistic expectations for an exit, and it can feed into a dangerous hype cycle. But last week I heard a surprising argument from a founder in favor of maximizing valuation — it deters lowball acquisition offers.
The argument goes: “I have a valuable team and we’re just getting started. I’m worried that if I get an acqui-hire offer, I’ll have to take it to my board and they might pressure me to take it. A higher valuation eases that pressure.”
VC’s I’ve talked to have said this thinking is irrational. (They’d never pressure a founder to sell! They’re a founder’s best friend!) So I’d love to hear from you, Term Sheet readers. Is valuation-as-defense reasonable move for a founder to make?
• The Global Fortune 500 is out today. This group of companies makes up 40.1% of the world’s GDP, and 128 U.S. companies are represented. Wal-Mart took the top spot, just as it did on the U.S. Fortune 500, for the second year.
THE BIG DEAL
• Flipboard, a mobile news app, has authorized the sale of $50 million in shares of a Series D round of funding, according to a Delaware filing procured by VC Experts. The company, which has raised more than $160 million in funding, had previously been named as an acquisition target after reports of deal discussions with Google and Yahoo surfaced. flipboard.com/
VENTURE CAPITAL DEALS
• KalVista Pharmaceuticals, a Porton Down, UK-based pharmaceutical company, raised $33 million in Series B financing from Novo A/S and SV Life Sciences, RA Capital Management, Longwood Fund and Venrock. www.kalvista.com/
• Mswipe Technologies Private Limited, A Mumbai-based mobile point-of-sale company, closed a Series C funding of $25 million from new investors Falcon Edge Capital, Ola Cabs and Meru Capital as well as existing investors Matrix Partners India, Axis Bank and DSG Consumer Partners. www.matrixpartners.in/
• Granular, a provider of farm software, has raised $18.7 million in funding from Andreessen Horowitz, Google Ventures, and Khosla Ventures with participation from Tao Capital Partners, Emory Investment Management, Fall Line Capital, and H. Barton Asset Management. Read more.
• Darktrace, a Cambridge, UK-based provider of immune system technology, raised $22.5 million in Series B funding from Summit Partners. The round values the company at more than $100 million. www.darktrace.com/
• Mirakl, an online marketplace based in Paris, has raised $20 million in Series B funding led by 83North with participation from Felix Capital and investor Dave Strohm. www.mirakl.com/
• MedGenome, a San Francisco-based provider of genomic diagnostics in India and elsewhere, raised $20 million in Series B venture funding from Sequoia Capital. medgenome.com/
• Kinetic Social, a New York-based advertising technology startup, has raised $17.5 million in venture backing from Multiplier Capital and Bridge Bank. www.kineticsocial.com/
• 500px, a Toronto-based photo sharing startup, has raised $13 million in Series B funding led by Visual China Group, with participation from existing backers including Andreessen Horowitz, Harrison Metal, and ff Venture Capital. 500px.com/
• Organica Water, a wastewater treatment and recycling company based in Princeton, N.J. raised $9.1 million in Series C financing led by XPV Capital Corporation with participation from Idinvest Partners, through its Electranova Fund, abd existing investors International Finance Corporation and Gamma Capital Partners. www.organicawater.com/
• WireX, a Yehud, Israel–based network forensics company, raised $9.3 million in venture capital led by Vertex Venture Capital with participation from Magma Venture Capital, Entrée Capital angel investors. wirex-systems.com/
• ACT.md, a Boston-based healthcare startup, has raised $8.4 Million in Series A funding led by Rose Park Advisors. act.md/
• DataFox Intelligence, a San Francisco-based corporate intelligence startup, has raised $5 million in funding co-led by Goldman Sachs and Green Visor Capital. www.datafox.co
• Beacon, a subscription flight service created by the co-founders of Surf Air, has raised $7.5 million in funding led by Romulus Capital with participation from MiVentures and Western Technologies Investment. flybeacon.com/
• Survata, a San Francisco-based survey startup, has raised $6 million in Series A funding led by IDG Ventures with participation from Bloomberg Beta and angel investors. www.survata.com/
• Agrible, Inc., a Champaign, Ill.-based agriculture technology start-up, has raised $4.1 million in Series A funding led by Serra Ventures with participation from Archer Daniels Midland Company. www.agrible.com/
• Booktrack, San Francisco-based eBook technology company, raised a Series B investment round of $5 million led by COENT Venture Partners and Sparkbox Ventures. www.booktrack.com/content/
• BitX, a Singapore-based bitcoin exchange startup, has raised $4 million in Series A funding from PayU, a subsidiary of Naspers, and Digital Currency Group, the investment vehicle of Barry Silbert. bitx.co/
• Gameface Media, a Boston-based athletic photography company, raised $4 million in funding from Copley Equity Partners. Bialla Venture Partners and angel investors also participated. www.gamefacemedia.com/
• Grana, a Hong Kong-based e-commerce startup raised $1.5 million from Golden Gate Ventures and other undisclosed investors. www.grana.com/
• Homer Logistics, a delivery service for restaurants, has raised $2 million in venture funding from Brooklyn Bridge Ventures, Two Sigma Ventures, Vayner RSE, Rugged VC and Haystack Fund. www.homerlogistics.com/
• Job Market Maker, a talent acquisition software company based in Charleston, S.C., has raised $1 million venture funding from an undisclosed group of investors. www.jobmarketmaker.com/
• Emolument.com, a London-based remuneration data website, raised $1.4 million from undisclosed angel investors. www.emolument.com/
• Mallzee, a UK-based personalized shopping startup, has raised $3.9 million (£2.5 million) from Royal Mail Group. mallzee.com/
• 1DocWay, Inc., a New York-based telepsychiatry network operator, has raised $1.7M in a seed round led by iSeedVC,with participation from Rock Health, Asset Management, Great Oaks Venture Capital and Waterline Ventures. www.1docway.com/
• Leukocare, a Munich, Germany-based biotechnology company, raised an undisclosed amount of new funding from LifeCare Partners, a European health care investment firm. www.leukocare.com/
PRIVATE EQUITY DEALS
• Piramal Realty, a Mumbai-based subsidiary of conglomerate Piramal Group, has sold a minority stake to Warburg Pincus, for US$284 million. Piramal Realty develops real estate in Byculla, Thane, Worli, BKC and Mulund. www.piramal.com/
• SolaRight Lighting, a, Oklahoma City-based, Square Deal Capital-backed solar lighting company, has acquired the intellectual property rights, product rights and worldwide manufacturing and distributing rights of SolarCap Infinity, Inc., a solar lighting product company based in Seoul, South Korea. www.solarcap-lighting.com/
• Merrick Pet Care, a San Francisco-based organic pet food company, has sold to Nestlé Purina PetCare. Merrick was owned by Swander Pace Capital, which acquired the company in 2010. Founder Garth Merrick, Monitor Clipper Partners, and Highland Consumer Partners also sold shares. www.merrickpetcare.com/
• Brentwood Associates has completed a dividend recapitalization of Sundance Holding Company, LLC, a Salt Lake City-based retail company. www.sundancecatalog.com/
Clubhouse, a New York-based provider of engineering software, has raised $2 million from undisclosed investors. clubhouse.io/
• Folio Holdings, LLC, a Tampa, Fla.-based data analytics and distribution services company serving the film industry, has raised an undisclosed amount of investment from Atlantic Merchant Capital Investors with La Ragazza & Associates. folio.pictures/
• Blue Buffalo Pet Products, a Wilton, Conn.-based maker of natural pet foods, has raised around $677 million IPO. It listed shares under the ticker BUFF, with J.P. Morgan and Citigroup serving as co-lead underwriters. Shareholders include The Invus Group, which along with management sold 33.8 million shares for $20 each. www.bluebuff.com
• Gestamp Solar, a Spanish photovoltaic company which yesterday sold an 80% stake to KKR, is planning an IPO in the next two years, its CEO told Reuters. The KKR investment valued the company at $1 billion. Read more.
• BlackBerry will acquire AtHoc, a San Mateo, Calif.-based provider of networked crisis communications. AtHoc had raised $8.2 million in funding from Intel Capital, Greylock Partners and i-Hatch Ventures. www.athoc.com/
• St. Jude Medical agreed to buy competitor Thoratec Corp, based in Pleasanton, Calif., for $3.4 billion, a premium of approximately 10 percent to Thoratec’s stock price at close on Tuesday. www.thoratec.com/
• Tyco Retail Solutions, a retail subsidiary of Tyco, a Swiss security system company, has acquired FootFall, a UK-based retail intelligence company, from Experian, for US$60 million (£38.5 million) in cash. www.footfall.com/
FIRMS & FUNDS
• Ridgewood Energy Corporation, a Houston-based oil and gas investment firm, closed its third private equity fund, Ridgewood Energy Oil & Gas Fund III, L.P. with $1.9 billion in capital commitments, exceeding its $1.5 billion target. www.ridgewoodenergy.com/
• MMA Energy Capital, a subsidiary of Baltimore-based MMA Capital Management, has created a joint ventures with alternative asset manager Fundamental Advisors to develop solar power projects. www.mmacapitalmanagement.com/
MOVING IN, UP, ON & OUT
• Niko Bonatsos has been promoted to venture partner at General Catalyst Partners. He joined the firm in 2011 as a principal. www.generalcatalyst.com/
• Niamh A. Curry joined Proskauer’s Private Investment Funds Group as a partner in New York. www.proskauer.com/
• Michael Sanzone has joined Citizens Bank as a managing director in the Sponsor Coverage team. Previously he was U.S. Head of Financial Sponsor Coverage at RBS. www.citizensbank.com/
• Pier Luigi Colizzi has been named head of mergers and acquisitions for Europe, the Middle East and Africa at Barclays. Previously he weas head of banking in Italy. The former head of M&A for those regions, Matthew Ponsonby, is now vice chairman of banking as well as co-global chief operating officer of banking. www.home.barclays/
• KKR has appointed Atsushi Saito, former President and CEO of the Tokyo Stock Exchange and the Japan Exchange Group, as non-executive chairman of KKR Japan. www.kkr.com
• Devon Russell, a senior managing director at Madison Capital Funding, has left the firm, according to PE Hub. He was one of three members of the firm’s investment committee. Read more.
• Damien Steel has been named a managing director at Toronto-based OMERS Ventures, the venture capital arm of Canada’s largest pension fund. Steel was previously a director at the firm. www.omersventures.com/
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