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Term Sheet — Tuesday, September 22

Random Ramblings

A bunch of notes to kick off your Tuesday…

• The pearl: Yesterday afternoon came a Re/Code report that Oyster, the “Nexflix for books” that raised $17 million in VC funding, was shutting down its service and that some of its engineers were headed to Google. But we’ve learned the Google tie-in is deeper.

Specifically, Google has also acquired (or at least licensed) the startup’s core underlying IP (one source says Google acquired the entire company, which a Google spokeswoman denies). Moreover, most of the Oyster team will be working out of a Google Books development center in New York (unclear if this new iteration will be Google’s version of Oyster or more of a direct challenge to Amazon’s e-book retail biz, although I’d wager on the latter). No word on terms of the Oyster deal.

• Answer key: Last week I asked you to name the veteran VC firm that very recently decided to call it quits. Your hint was that the word “Venture” was in its name.

The answer is North Bridge Venture Partners, which has been trying for well over a year to raise around $200 million for its eighth early-stage fund (far cry from the $527 million it raised in 2008 for Fund VII). West Coast-based general partner Paul Santinelli emails over the following:

“After spending time testing the market, we gathered enough data to make the decision to pause Fund 8.  There were two driving factors – lack of interest in early-stage investing outside of the consumer internet space (we are not active in this segment) and lack of liquidity in current portfolios. We believe that liquidity in our portfolios is going to improve dramatically over the next twelve months. At that time, we will evaluate the limited partners’ appetite for inception based investing.”

But if there really is a reconstituted version of NBVP, then it would look very different from the group that tried to raise this fund. General partners Michael Skok and Jonathan Heiliger left nearly a year ago, and remaining general partner Ric Fulop (founder of A123 Systems) recently departed to form a new 3D printing company called Desktop Metal. Fellow general partner Jamie Goldstein also is said to be leaving, but there are no words yet on his future plans.

North Bridge continues to have an active growth-stage practice. Firm founder Ed Anderson declined comment.

• Quasi-related: We reported last month that ex-NBVP partner Michael Skok was forming a new firm with C.A. Webb (stepping down as executive director of the New England Venture Capital Association) and John Pearce (former president and CEO of Demandware). Now it has a name: Assemble VC.

• Deal scoop: My colleague Erin Griffith reports this morning that New York-based payments startup Cover has been acquired by British rival Velocity for an undisclosed amount. Both companies have raised VC funding. Read more.

• Video: Blackstone Group CEO Steve Schwarzman stopped by Fortune HQ last week to be interviewed by Susie Gharib. He said that Blackstone’s senior execs studied Jeb Bush’s corporate tax plan for nearly two hours and “we couldn’t figure it out,” and also that the “outside world is over-reacting” to China’s economic tumult. Go here for more.

• Deal data: PitchBook Data and The Angel Resource Institute report this morning that the median pre-money valuation for seed rounds hit $3.95 million in Q2, an all-time high and nearly a 30% increase from the year-earlier period.

• Outbox: Today’s private equity deals include one in which HGGC acquired a majority stake in Silicon Valley email marketing company StrongView, which had raised nearly $39 million in VC funding from firms like Evercore Partners, Globespan Capital Partners, Sequoia Capital and Steamboat Ventures. No one is talking details publicly, but I hear this was a majority recap through which the VCs exited.

• #GetLiquid: Next month’s Liquidity Event in San Francisco is sold out, but we’re still hoping to pull some folks off the wait-list (sign up here). BIG thanks to sponsors Gunderson Dettmer, PitchBook Data, TPG Growth, Andreessen Horowitz and Winmark Capital.


• CloudFlare, a San Francisco-based cybersecurity and networking company, has raised $110 million in new funding. Fidelity Investments led the round, and was joined by Google Capital, Microsoft, Baidu, Qualcomm Ventures. It previously raised over $70 million from Greenspring Associates, NEA, Pelion Venture Partners, Union Square Ventures and Venrock. Read more.


• Daraz, a Rocket Internet-backed general e-commerce site for Bangladesh, Pakistan and Myanmar , has raised €50 million in new VC funding. CDC Group led the round, and was joined by the Asia Pacific Internet Group. Read more.

• Modernizing Medicine Inc., a Boca Raton, Fla.-based provider of cloud-based specialty-specific electronic medical record systems, has raised $38 million in Series E funding. Backers include Pentland Group, Summit Partners and Sands Venture Capital.

• CoverHound, a San Francisco-based auto and property insurance search and sale engine, has raised $33.3 million in Series C funding. ACE Group led the round, which TechCrunch reports was done at a $103 million valuation. Read more.

• Veran Medical Technologies Inc., a St. Louis-based developer of image-guided endobronchial and percutaneous technology for diagnosis of lung cancer and therapy delivery, has raised $30.6 million in new VC funding. Versant Ventures and River Cities Capital Funds co-led the round, and were joined by return backers Prolog Ventures, Advantage Capital, Rex Health Ventures, 3G Capital, Dynamic Investments and Vectis.

• Advize, a French ecommerce customer engagement platform, has raised €14 million in VC funding from Iris Capital, Bpifrance and return backer Alven Capital.

• Globality, a Menlo Park, Calif.-based stealth startup focused on global trade, has raised $10 million in funding from individuals like Al Gore, Sheryl Sandberg, Ron Johnson and Ken Goldman. Read more.

• Prevtec Microbia, a Montreal-based developer of biological products for the prevention of diseases in food animals, has raised C$7.2 million in new equity funding. Backers include Investissement Quebec (C$2.5m), PIH Pharma Industry Holding GmbH, Telesystem Ltd., Groupe Jafaco Gestion Inc. and Desjardins-Innovatech.

• MasteryConnect, a Salt Lake City-based learning monitoring platform for K-12 educators, has raised $5 million in new Series B funding from Mark Zuckerberg and Priscilla Chan. This brings the round total to $20.2 million, including an earlier close from Trinity Ventures, Pelion Ventures and Catamount Ventures.

• RouteHappy, a New York-based “product differentiation platform for air travel,” has raised $3 million in Series B funding. PAR Capital Ventures led the round, and was joined by return backers iNovia Capital and Contour Venture Partners.

• Allset, a San Francisco-based mobile app for restaurants and lunchtime eaters, has raised $1.5 million in seed funding from SMRK VC Fund and Alexandr Chernyak.


• American Industrial Partners has acquired Goss International, a Woodridge, Ill.-based maker of web offset printing presses and finishing systems, from Shanghai Electric Corp. No financial terms were disclosed.

• BioClinica Inc., a Newtown, Penn.-based provider of clinical trials services, has acquired Synowledge, a Miami, Fla.-based provider of drug safety, regulatory affairs and related IT services to the life sciences market. No financial terms were disclosed. BioClinica shareholders include Ampersand Capital PartnersJLL Partners and Water Street Healthcare Partners. Harris Williams & Co. managed the sale process.

• The Blackstone Group has acquired Ideal Shopping Direct, a UK-based retailer that sells via the Internet and digital television home shopping channels, from Inflexion Private Equity. No financial terms were disclosed.

• Hammond, Kennedy, Whitney & Co. has sponsored a recapitalization of Partners In Leadership Inc., a Temecula, Calif.-based provider of accountability and cultural transition training service to companies. No financial terms were disclosed.

• HealthPort-IOD, an Alpharetta, Gla.-based portfolio company of New Mountain Capital, has acquired ECS, a Phoenix-based provider of on-demand access to medical records and related services. No financial terms were disclosed.

• HGGC has acquired a majority stake in StrongView, a Redwood City, Calif.-based provider of contextual marketing solutions. No financial terms were disclosed. StrongView had raised nearly $39 million in VC funding — most recently in 2009 — from firms like Evercore Partners, Globespan Capital Partners, Sequoia Capital and Steamboat Ventures.

• Hudson Clean Energy Partners has committed up to $100 million to a new strategic partnership with Sky Solar Holdings Ltd. (Nasdaq: SKYS), which will fund solar projects in Latin America and Japan.

• Kason Corp., a Millburn, N.J.-based portfolio company of Baird Capital, has acquired Kek-Gardner, a UK-based provider of sieving, mixing and size reduction process technology for the process control industries. No financial terms were disclosed.

• KKR has committed an undisclosed amount of funding to launch Trans European Oil & Gas, a new platform from the founders and former management team of Star Energy. Trans European will build a portfolio of conventional onshore oil and gas properties in established European hydrocarbon plays.

• LAZ Karp Partners, a Hartford, Conn.-based provider of parking management services, has raised an undisclosed amount of equity funding from Harvest Partners SCF, the non-control private equity strategy of Harvest Partners.

• Saham Finances SA, the insurance arm of Wendel (Paris: MF) portfolio company Saham Group, has acquired C-Re Holding Ltd. from Emerging Capital Partners for an undisclosed amount. C-Re holds a 53.6% stake in Continental Reinsurance PLC, a private reinsurance company in Africa (excluding South Africa).

• Strait Lane Capital Partners has acquired a majority equity stake in Calling All Ships LLC, a Miami Lakes, Fla.-based distributor of health & beauty aids and various sundry products to the cruise ship and hospitality industries, from Gen Cap America. Cross Keys Capital managed the process. No financial terms were disclosed.

• Tuatara Capital is leading an investor group to form Willie’s Reserve, a cannabis lifestyle brand formed in partnership with Willie Nelson. No financial terms were disclosed.

• Veritas Capital has agreed to acquire the embedded technology and systems business (based in Huntsville, Ala.) of General Electric (NYSE: GE) for an undisclosed amount.


• CPI Card Group Inc., a Littleton, Colo.-based maker of plastic credit and debit cards, has set its IPO terms to nearly 17.65 million shares being offered at between $16 and $18 per share. It would have an initial market cap of around $858 million, were it to price in the middle of its range. The company plans to trade on the Nasdaq, with BMO Capital Markets, Goldman Sachs and CIBC serving as lead underwriters. CPI reports $13.3 million of net income on $261 million in revenue for 2014, and is owned by Tricor Pacific Capital

• Edge Therapeutics, a Berkeley Heights, N.J.-based developer of therapies for life-threatening neurological conditions, has set its IPO terms to nearly 5.67 million shares being offered at between $14 and $16 per share. It would have an initial market cap of around $388 million, were it to price in the middle of its range. The pre-revenue company plans to trade on the Nasdaq under ticker symbol EDGE, with Leerink Partners and Credit Suisse serving as co-lead underwriters. It has raised just over $100 million in VC funding, from firms like Sofinnova Ventures (9.2% pre-IPO stake), Venrock (8%), Janus Capital Management (8%), New Leaf Venture Partners (6.4%), Franklin Templeton (6.4%) and BioMed Ventures.

• Deezer, a Paris-based music streaming service, said that it has filed for a Paris floatation. No terms were disclosed, but the NY Times says the company has been seeking private funding at around a $1.1 billion valuation. Deezer has raised more than $140 million in funding from such firms as Access Industries, CM-CIC Capital Prive and IDInvest Partners. Read more.

• Performance Food Group, a Richmond, Va.-based foodservice distributor, has set its IPO terms to 14.5 million shares being offered at between $22 and $25 per share. It would have an initial market cap of around $2.34 billion, were it to price in the middle of its range. The company reports $56.5 million of net income on $15.27 billion in revenue for the fiscal year ending June 27, 2015. Shareholders include The Blackstone Group (71.8% pre-IPO stake), Wellspring Capital Partners (19.2%), Lexington Partners (2%), Fisher Lynch (2%), Ares Management and Quilvest.

• Strongbridge Biopharma PLC, a Trevose, Penn.-based drug company focused on rare diseases like endogenous Cushing’s syndrome, has set its IPO terms to 4.25 million shares. This could raise around million, based on the $17.93 trading price of its shares last Friday on the Norwegian Over-The-Counter System. It plans to list on the Nasdaq under ticker symbol SBBP, with BofA Merrill Lynch and Stifel serving as lead underwriters. Shareholders in the pre-revenue company include TVM (12.6% pre-IPO stake), HealthCap (11.9%), RA Capital (10.9%) and New Enterprise Associates (8.5%).


• FactSet Research Systems (NYSE:FDS) has agreed to acquire all the issued and outstanding membership interests of Portware LLC, a New York-based multi-asset execution management system, for $265 million in cash. Sellers include Long Ridge Equity Partners.

• Meggitt PLC (LSE: MGGT) has agreed to acquire EDAC, a Farmington, Conn.-based aerospace components company, from Greenbriar Equity Group for $340 million. Greenbriar acquired EDAC just over two years ago at an enterprise value of around $145 million. Read more.

• Wind Point Partners has agreed to sell Argotec, a Greenfield, Mass.-based maker of polyurethane films and sheets, to Schweitzer-Mauduit International Inc. (NYSE: SWM). The deal is valued at $280 million in cash.


• Clinigen Group (AIM: CLIN) has agreed to acquire Link Healthcare, a specialty pharma company focused on Asia, Africa and Australasia, for upwards of £100 million. Read more.

• Hiroyuki Nishimura, founder of Japanese online message board 2channel, has acquired 4chan, a U.S.-based anonymous online message board, from founder Christopher Poole. No financial terms were disclosed. Read more.

• Signet Enterprises, an Akron, Ohio-based provider of real estate development and management consultancy services, has acquired Publishers Storage & Shipping LLC, a Fitchburg, Mass.-based provider of book storage and order fulfillment for small and mid-size publishers. No financial terms were disclosed.


No firm or fund news this morning.


• Eileen Burbidge, a founding partner with Passion Capital, has been named chair of Tech City UK. Read more.

• Global Infrastructure Partners has promoted William Bryant to partner. He joined the firm’s New York office in 2007, and currently sits on the board of portfolio company Hess Infrastructure Partners.

• Donna Smolens has joined Insight Venture Partners as a senior advisor, with a focus on investor relations. She previously was with Portfolio Advisors LLC as a managing director and co-head of the firm’s North American research and due diligence team.

• Paul Walsh has joined private equity firm Calera Capital as a senior managing director. He previously served as an operating partner with the firm, and is the former chairman and CEO of eFunds Corp. (NYSE: EFD).

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