Random Ramblings
Fidelity Investments got a lot of attention earlier this month for marking down the values of its shares in a number of well-known, privately-held startups. But even before those stories appeared, the Boston-based mutual fund manager had brightened on several of its more notable holdings, including prior markdown subjects like Dropbox and Snapchat.
Fidelity publishes monthly portfolio holding listings on a one-month lag, meaning that most of the recent articles were based on data through the end of September. Yesterday, however, I reviewed newly-released data through the end of October.
The big news was that several of the more severe September markdowns had been reversed, albeit not always to the point of making Fidelity whole (on paper) for its original investment. But there were some companies, including Blue Bottle, that had their carrying values slashed even deeper. For full details, please read my post by going here.
• Related: There is a new Reuters interview with Will Danoff, portfolio manager for Fidelity's largest mutual fund -- Contrafund, whose holdings include Uber and WeWork -- in which he says of pre-IPO investments: "There are so many unicorns. It means you have to be more careful than we were three or four years ago."
It is important to note, however, that neither Danoff nor other Fidelity portfolio managers actually strike deals with pre-IPO companies. That's done by a separate group within Fidelity, which then asks portfolio managers if they want shares in an already-negotiated deal. Obviously that separate group would be aware of caution expressed by the portfolio manager of its largest fund -- thus perhaps negotiating for fewer shares -- but it's not like Danoff himself is sending out term sheets.
• From the filings: Tiger Global has raised another $2.5 billion to invest in private companies, according to a regulatory filing. This comes less than one year after it raised $2.5 billion for its ninth such fund (which came just six months after it raised $1.5 billion for Fund VIII).
• Energized: Bill Gates generated a lot of buzz over the past couple of days, for announcing a large new zero-carbon energy investing initiative that has the financial support of fellow billionaires like Mark Zuckerberg, Marc Benioff, Ray Dalio, George Soros, John Doerr and Vinod Khosla. The University of California also is involved.
It's called the Energy Breakthrough Coalition, and is being launched in partnership with Mission Innovation -- a commitment by 20 nations to double their commitments to early-stage, clean energy R&D. Basically, EBC would provide early-stage financing to begin commercializing the government R&D.
Some notes and thoughts:
1. Gates has committed $1 billion to the initiative, which is on top of the estimated $1 billion he already has invested in clean energy companies and projects. None of the other participants has yet made a specific financial commitment, but a Gates spokesman says that he expects more than $1 billion from the current group (which he plans to expand as time goes on).
2. This is still very much a work in progress. Gates plans to structure the money in a fund -- or perhaps series of funds -- but has not yet identified (let alone hired) an investment staff. The current plan is to build out the infrastructure over the next year, with actual money beginning to slow at the end of 2016. The quasi-premature announcement was made, it seems, to coincide with the Paris climate talks.
3. This question of fund vs. series of funds may become very important, given that Gates is currently planning to devote billions of dollars to the early stage. While there certainly is a need for such financing -- and the need should grow exponentially thanks to Mission Innovation -- the reality is that cleantech companies often have manufacturing components that require large later-stage financing. And while early-stage cleantech capital has dried up, the later-stage market is a veritable desert (thanks to numerous big bets gone bad). It seems to me that, in order to succeed, EBC will need to have the capacity to not only participate pro rata in follow-on deals, but also to lead them.
THE BIG DEAL
• AppDynamics, a San Francisco-based application intelligence company, has raised $158 million in new growth equity funding at a reported post-money valuation of $1.9 billion.
General Atlantic and Altimeter Capital co-led the round, and were joined by Adage Capital, Industry Ventures, Goldman Sachs, Cross Creek Advisors and return backers IVP, Greylock and Lightspeed Venture Partners. Read more.
VENTURE CAPITAL DEALS
• ThreatConnect Inc., an Arlington, Va.-based threat intelligence platform, has raised $16 million in Series B funding. SAP National Security Services led the round, and was joined by return backer Grotech. www.threatconnect.com
• Nestio, a New York-based leasing and marketing platform for residential landlords, has raised $8 million in Series A funding. Trinity Ventures led the round, and was joined by seed backers Freestyle Capital, Joanne Wilson and David Cohen. Read more.
• Mirador, a Portland, Ore.-based provider of cloud-based borrower application software for lenders, has raised $7 million in Series A funding. Core Innovation Capital led the round, and was joined by Nyca Partners, Jump Capital and seed backers Collaborative Fund, Wicklow Capital and Crosslink Capital. www.miradorlending.com
• Burpple, a Singapore-based food discovery service, has raised $6 million in Series A funding from Tembusu Partners, Singapore Press Holdings and Triumph Capital. Read more.
PRIVATE EQUITY DEALS
• AutoAlert, an Irvine, Calif.-based portfolio company of HGGC, has acquired MotoFuze LLC, a Raytown, Mo.-based customer experience management platform for the auto industry. No financial terms were disclosed. www.autoalert.com
• Brundage-Bone Concrete Pumping Inc., a Denver-based concrete pumping company that is sponsored by Peninsula Pacific Strategic Partners, has made three acquisitions in South Carolina: Acton Concrete Pumping Inc., (Greenville), AJ Concrete Pumping (Charleston) and Kenyon Concrete Pumping (Charleston). No financial terms were disclosed. www.peninsulapacific.com
• Citic Capital and China Media Group are leading an investor consortium that will invest $400 million for a 13% stake in City Football Group, whose clubs include Manchester City FC. Read more.
• CPA Global, a Channel Islands-based portfolio company of Cinven, has acquired Innography, an Austin, Texas-based provider of IP search and analytics software. No financial terms were disclosed. Sellers include Austin Ventures and Covera Ventures. www.innography.com
• Gryphon Investors has acquired a majority equity stake in The Original Cakerie, a Canada-based maker of frozen desserts for retail and foodservice customers in North America. No financial terms were disclosed. www.gryphoninvestors.com
• GTCR has agreed to acquire Park Place Technologies, a Cleveland-based provider of post-warranty data center maintenance services, from WestView Capital. No financial terms were disclosed. www.parkplacetechnologies.com
• Klass Capital has acquired Docebo, an Italy-based provider of cloud-based corporate learning management solutions, from Italian venture capital firm Principia SGR. No financial terms were disclosed. www.docebo.com
• Riverstone Holdings LLC has committed $250 million to form Rover Petroleum LLC, a Dallas-based company that will acquire and develop conventional oil assets in North America (focused on opportunities within Texas and Oklahoma). www.riverstonellc.com
IPOs
• eASIC Corp., a Santa Clara, Calif.-based fabless maker of zero mask-charge ASIC chips, has withdrawn registration for a $75 million IPO (originally filed in February 2015). No explanation was provided. The company had reported a $1 million net loss on $67 million in revenue during 2014. Shareholders include Khosla Ventures (20.8% pre-IPO stake), Crescendo Ventures (15%), Seagate (14.6%), Kleiner Perkins Caufield & Byers (8.8%), Evergreen Partners (7.8%) and Advanced Equities (5.9%). Morgan Stanley and Deutsche Bank Securities were serving as lead IPO underwriters. www.easic.com
EXITS
• Mattress Firm Holding Corp. (Nasdaq: MFRM) has agreed to acquire rival mattress retailer Sleepy’s Inc. for $780 million from Calera Capital. The combined company would have around 3,500 physical stores and north of $3.6 billion in annual revenue. Read more.
• Quikr, an Indian online classifieds site, is in talks to acquire Indian property listings portal Commonfloor for around $200 million, according to TechCrunch. Quikr has raised over $340 million in VC funding from firms like Tiger Global, Investment AB Kinnevik and Steadview Capital. Commonfloor has raised over $60 million from Tiger Global, Accel and Google Capital. Read more.
OTHER DEALS
• Beam Suntory has agreed to sell its Spanish brandy and sherry business to Philippines-based Emperador for €275 million. Read more.
• iPayment Inc., a New York-based payment processor, has hired J.P. Morgan to conduct a strategic review of the business that could result in a sale for upwards of $1 billion, according to Bloomberg. Read more.
• ITC Holdings Corp. (NYSE: ITC), a Novi, Mich.-based electricity transmission company, said that it has launched a strategic review that could result in a possible sale. ITC’s current market cap is around $5.6 billion, while its enterprise value is north of $10 billion. Read more.
• Perk (TSX: PER) has acquired Palo Alto, Calif.-based mobile app development platform Corona Labs for $2.3 million. www.coronalabs.com
FIRMS & FUNDS
• Apax Partners has closed a new Israel-focused buyout fund with $500 million in capital commitments, according to Private Equity International. www.apax.com
• Greycroft Partners has closed its fourth early-stage VC fund with $200 million in capital commitments. The firm also has promoted Ellie Wheeler to partner. www.greycroft.com
• Morgan Stanley plans to cut up to 25% of its fixed-income jobs, according to Reuters. Read more.
MOVING IN, UP, ON & OUT
• Phil Arra has joined Monomoy Capital Partners as a managing director and head of business development. He previously was with Terra Verde Partner. www.mcpfunds.com
• Ross Catlin has joined Natixis as a managing director and senior originator of acquisition and strategic finance for the Americas. He previously was with Fifth Street Finance as a managing director of sponsor coverage and origination. www.natixis.com
• Lawrence Lenihan, co-founder of FirstMark Capital, is launching a new business that will create and operate fashion startups, according to VentureWire. As part of the move, he has transitioned from a general partner to venture partner role with FirstMark, and tells VentureWire that he doesn’t “want to refer to myself as a venture capitalist anymore.” www.firstmarkcap.com
• Revolution Growth has hired three new vice presidents: Kristin Gunther (ex-Perseus), Ashley Larson (ABS Capital Partners) and Chris Hughes (Boston Consulting Group). The firm also promoted Meredith Balenske to VP of communications. www.revolution.com/growth
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