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Term Sheet — Tuesday, September 1

Random Ramblings

Avid Life Media, the Canadian company behind recently-hacked infidelity website Ashley Madison, told Bloomberg back in April that it was prepping an initial public offering that would value that company at upwards of $1 billion. The statement was dutifully picked up by the business press (including by us at Fortune), particularly since it included a wise-sounding caveat about pricing in London because Europeans were less squeamish about such things than Americans.

But it seems those IPO plans were a lot like those “millions” of female Ashley Madison members — not legitimate, but rather a giant self-actualization exercise. If you build it, they will come.

According to Reuters, some of the hacked documents suggest that Avid Life’s IPO plans were revealed at the same time that “investors had pressed [the company] to improve liquidity so they could sell shares.” It also reveals that the company had repeatedly sought, and failed, to find a buyer or third-party debt.

None of this is the sort of high-flyer image that Avid Life had sought to present back in April. If it couldn’t even raise debt — including, presumably, from lenders outside of North America — why would it have any confidence that it could raise $200 million in equity at a $1 billion valuation, or even find IPO underwriters? And if the company knew that a potential buyer was turned off by (recently resigned) CEO Noel Biderman’s “difficult and very demanding” personality, did it not think that similar issues might arise on a road show?

Or was the entire IPO plan a calculated bluff, leveraging the recent public interest in $1 billion-valued tech startups? Tell everyone that public equity investors are willing to invest $200 million at a huge valuation, and maybe it shakes loose a new buyer who thinks it’s getting a bargain?

Even the financials shared in April with Bloomberg are a bit suspect. Fusion recently used hacked data to calculate that Ashley Madison’s revenue growth hit around 30% between 2009 and 2010, but fell consistently through 2013 (when total revenue hit $76.7 million. Bloomberg‘s report was that the site generated $115 million in 2014, which would be nearly a 50% bump. Yes, it’s possible for revenue growth to shoot upward after steadily drifting down, but that’s one hell of a reversal. Moreover, there was a BBC story just one month later that suggested $150 million in revenue (one explanation for the discrepancy could be the inclusion/exclusion of smaller Avid Life properties besides Ashley Madison).

My point here isn’t that you shouldn’t trust a company whose mission is to encourage and enable cheating, nor am I certain that Avid Life execs were fudging the revenue numbers (or even female member numbers, for that matter).

Instead, it is to say that we all must be a bit more circumspect when a company tells us that it is planning for a giant IPO, until there actually are some public documents or strong sourcing to support the claim. How many stories do we see about companies planning an IPO for “next year” or, even worse, “in the next couple of years.”

Reporting aspirations is one thing, but that’s different from marking our collective calendars.


• Apttus, a San Mateo, Calif.-based provider of quote-to-cash solutions that work on top of the platform, has raised $108 million in Series C funding at a valuation that CEO Kirk Krappe says is “well north of $1 billion.” The Kuwait Investment Authority was joined by return backers Iconiq Capital, K1 Capital and Salesforce Ventures.

Apttus currently is on a revenue run rate of around $120 million (for the current fiscal year, which ends on Jan. 31, 2016), and plans to add another 500 employees by year-end (up to 1,400). The new hires will include between 100 and 200 salespeople.


• CeQur SA, a Swiss developer of insulin infusion solutions for people with diabetes, has raised $100 million in Series C funding. Woodford Investment Management and Arthurian Life Sciences co-led the round, and were joined by return backers Endeavour Vision, Schroder & Co. Banque SA and VI Partners.

• Intellia Therapeutics, a Cambridge, Mass.-based gene-editing company focused on the development of medicines using CRISPR/Cas9 technology, has raised $70 million in Series B funding. OrbiMed led the round, and was joined by Fidelity, Janus Capital Management, Foresite Capital, Sectoral Asset Management, EcoR1 Capital and return backers Atlas Venture and Novartis.

• Shift Technologies, an online marketplace for used cars in San Francisco and Los Angeles, has raised $50 million in new VC funding. Goldman Sachs led the round, and was joined by return backers DCM, DFJ and Highland Capital Partners. Read more.

• Ivenix Inc., an Amesbury, Mass.-based developer of an infusion management system, has raised $42 million in new equity funding. WuXi Healthcare Ventures led the round, and was joined by Cardinal Partners, CICA, Inc., Easterly Ventures, Fidelity Biosciences, SCP Vitalife Partners and Stichting Lichfield. Leerink Partners served as placement agent.

• WellAware, a San Antonio, Texas-based provider of software solutions for oilfield production monitoring and optimization, has raised $16 million in Series B1 funding. Mitsui & Co. and Genscape Inc. co-led the round.

• Yummly, a Redwood City, Calif.-based food discovery platform, has raised $15 million in Series B funding from Bauer Venture Partners.

• Dubsmash, a Berlin-based video messaging app, has raised $5.5 million in Series A funding. Index Ventures led the round, and was joined by Lowercase Capital, ENIAC Ventures, Sunstone Capital, Raine Ventures and Riccardo Zacconi (King Digital Entertainment CEO).

• Medfusion Inc., a Cary, N.C.-based patient engagement platform, has raised $3 million in VC funding from Bull City Venture Partners and Hatteras Venture Partners.

• ConnXus, a Mason, Ohio-based provider of supplier diversity management software, has raised $2.5 million in new VC funding. Techstars Ventures led the round, and was joined by Serious Change LP, CincyTech and Impact America Fund.

• CatchThatBus, a mobile app for bus booking and information in Malaysia and Singapore, has raised $1.5 million in new VC funding from 500 Startups and Jungle Ventures. Read more.

• Wiselike, a San Francisco-based knowledge-sharing platform, has raised $1.25 million in seed funding. GGV Capital led the round, and was joined by 500 Startups and GREE.

• Super League Gaming Inc., a Santa Monica, Calif.-based firm that transforms movie theaters into interactive, multiplayer gaming arenas, has raised an undisclosed amount of Series B funding from Cinemark Theatres, Softbank and unidentified investors in Hong Kong and Singapore. Existing shareholders include Quadrant Management.


• Ares Management, via its Ares EIF Group, has agreed to acquire the Van Hook Gathering System in North Dakota from WPX Energy (NYSE: WPX) for around $185 million. WPX will continue to manage the pipeline system.

• Aterian Investment Partners has acquired Backyard Discovery, a Pittsburg, Kan.-based maker and installer of playsets, from Baird Capital Partners and Greyock Capital Group. No financial terms were disclosed.

• Baring Private Equity Asia has acquired a 40% stake in Weetabix Ltd., a UK-based maker of branded cereals and cereal bars, from Lion Capital for an undisclosed amount. Weetabix will continue to be controlled by China’s Bright Food Group.

• Lone Star Funds, HNA Group and Sankaty Advisors are the final bidders for GE Capital’s Australian commercial lending and leasing businesses, which have a book value of around US$1.8 billion, according to the NY Times. Morgan Stanley is running the process. Read more.

• Resilience Capital Partners has acquired Porter’s Group Holdings LLC, a Bessemer City, N.C.-based provider of metal fabrication solutions for the security, military, mining, heavy equipment and trucking industries. No financial terms were disclosed.

• The Riverside Company has acquired Arrowhead Electrical Products, a Blaine, Minn.-based provider of aftermarket replacement parts for motorized vehicles from Pfingsten Partners. No financial terms were disclosed.

• Providence Equity Partners has agreed to merge portfolio companyu SRA International with the government services unit of CSC (NYSE: CSC), in order to form a single IT provider to the U.S. government that would have projected 2015 revenue of around $5.5 billion. CSC, which is structuring the deal as a tax-free spin-off, says that its shareholders will hold 84.68% of the combined company, while Providence and other SRA backers would hold 15.32% and receive $390 million in cash.


• American Renal Associates Holdings, a Beverly, Mass.-based dialysis services provider, has filed for a $100 million IPO. It plans to trade on the NYSE under ticker symbol ARA, with BofA Merrill Lynch, Barclays and Goldman Sachs serving as lead underwriters. The company reports $16 million of net income on $561 million in net patient revenue (revenue minus uncollectable accounts) for 2014. Centerbridge Capital Partners holds a 79.6% pre-IPO stake.

• IC Power, an electricity provider in Latin America, Israel and the Carribean, has filed for a $100 million IPO. It plans to trade on the NYSE under ticker symbol ICP, with BofA Merrill Lynch and Credit Suisse serving as lead underwriters. IC Power is solely held by Kenon Holdings Ltd. (NBYSE: KEN).

• PharMEDium Healthcare Holdings, a Lake Forrest, Ill.-based provider of outsourced compounded sterile preparations, has filed for a $100 million IPO. It plans to trade on the NYSE under ticker symbol PMHC, with Credit Suisse, J.P. Morgan and Morgan Stanley serving as lead underwriters. The company reports $9.3 million of net income on around $209.5 million of revenue for the first half of 2014, compared to less than $1 million of net income on $153 million in revenue for the year-earlier period. Clayton Dubilier & Rice acquired PharMEDium in early 2014 for around $900 million.

• Sancilio Pharmaceuticals Co., a Riviera Beach, Fla.-based developer of drugs based on lipid drug delivery technology, has filed for an $86.25 million IPO. It plans to trade on the Nasdaq under ticker symbol SPCI, with UBS and Piper Jaffray serving as lead underwriters. The company reports a $260,000 net loss on around $13.5 million in revenue for the first half of 2015. Shareholders include Signet Healthcare Partners (12.2% pre-IPO stake) and Wellington Management (12.2%).


• EQT Partners has said that it is planning next year to either sell or float Swedish education company Academedia, according to Reuters. The company generated around $759 million in 2014 revenue. Read more.


 No other deals this morning.


• Ascent Venture Partners, a Boston-based VC firm focused on enterprise technology, is raising upwards of $150 million for its seventh fund, according to a regulatory filing. It already has secured $63.55 million.

• Cairngorm Capital, a UK-based private equity firm formed by ex-H.I.G. Capital executive Andrew Steel, has closed its debut fund with £50 million in capital commitments.

• Cloud Apps Capital Partners, a San Francisco-based VC firm founded by former executive Matt Holleran, has closed its debut fund with more than $50 million in capital commitments.

• IDG Ventures, a San Francisco-based early-stage investment firm, has closed its latest fund with $120 million in capital commitments. Read more.

• Montagu Private Equity, a European private equity firm based in London, has closed its fifth fund with €2.75 billion in capital commitments.

• Rally Ventures, an early-stage VC firm with offices in Silicon Valley and Minnesota, is raising upwards of $120 million for its second fund, according to a regulatory filing.

• SeedPlus Singapore, a new seed fund managed by Jungle Ventures, is raising up to $20 million, according to a regulatory filing.

• Sigma West, a San Francisco-based VC firm focused on Series A financings for SaaS and marketplace startups, has renamed itself Jackson Square Ventures.


• Battery Ventures has promoted three executives to vice president: Sanjiv Kalevar (Boston), who focuses on business software and financial technology; Jeff Lu (Silicon Valley), who focuses on e-commerce, digital media and enterprise software and Shiran Shalev (Israel), who focuses on enterprise software and financial technology.

• Fulcrum Equity Partners, an Atlanta-based growth equity firm, has promoted Philip Lewis to principal. He originally joined the firm in 2007.

• Cliff Meijer has joined Headway Capital Partners, a London-based private equity secondaries firm, as an advisor. He previously spent more than a decade as managing partner of Thomas Weisel Global Growth Partners.

• Joe Pignato has joined Allied Minds (LSE: ALM), a based science and tech development and commercialization company, as chief financial officer. He has spent the past five years as CFO of Swipely and, before that, held CFO roles at both Prism VentureWorks and Charles River Ventures.

• Jon Presnell has joined Blue Point Capital Partners as a principal. He previously was a principal with Greenbriar Equity Group.

• Vijay Sekhon has joined Sidley Austin LLP as a Century City, Calif.-based partner in the law firm’s M&A and private equity practices. He previously was with Klee, Tuchin, Bogdanoff & Stern LLP.

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