Greetings from Las Vegas, where the sun has not yet begun to rise. Some notes as I begin to dig out from the vacation inbox:
• Say what? I’m beginning to hear (and read) about how a lot of VC-backed companies will go public in 2016, due to a slowdown in the later-stage financing market. That strikes me as naïve.
For starters, the latter-stage issue right now is tighter pricing, not a lack of capital availability. The Fed would have to raise rates much more substantially before crossover folks stop chasing yield in alternative markets. So unicorns and other startups can still throw new money into their burn ovens, albeit often at less ambitious valuations.
But the bigger issue is the implicit belief that there will be capital availability from the public markets (i.e., IPO window). Not quite sure where this faith is based. 2015 was the weakest year for VC-backed IPOs since 2010, in terms of dollars raised, and performance of these issues was decidedly mixed. Why exactly is 2016 going to be decidedly better? I know today is just a tiny snapshot, but clearly the macro markets are pessimistic. Do the VCs know something that global traders don’t?
Between 2013 and early 2015, I repeatedly expressed surprise that more VC-backed companies weren’t going public when the public going was good. This may be the year that regret finally begins to set in.
• It begins: As most of us were heading out for New Year's Eve, EMC acknowledged that it will fire a whole bunch of people, in preparation for its takeover by Dell Inc. The Hopkinton, Mass.-based storage company didn't give specific pink slip figures, except to say that they would be part of a recently-approved, $250 million restructuring plan. Most of the layoffs are expected to occur by the end of Q1.
• Today in Theranos: Former Wells Fargo CEO Richard Kovacevich appeared on CNBC this morning to talk global economy, and also was asked a few questions about Theranos. More specifically, the CNBC anchor repeatedly referred to Kovacevich as a member of the Theranos board of directors, even though he was one of 11 directors who were effectively bumped last fall (alongside folks like Henry Kissinger and Bill Frist -- all of whom are now official "counselors" to Theranos).
The odd part wasn’t CNBC's error, but rather the lack of a correction from Kovacevich, who said that he believes the company and its CEO are being unfairly maligned. Particularly when said maligning is largely about alleged dishonesty.
• Recommended reading: This one was from late last year, but a great NY Times read from Katie Benner about what happened to employees when Good Technologies agreed to be acquired by Blackberry for less than half of its most recent private valuation (and also below the takeover price Thoma Bravo had offered earlier in the year). Check it out here.
• Monthly marks: Fidelity has once again revalued its privately-held positions, including such companies as Dropbox, Uber, Snapchat and Blue Bottle Coffee (which got crushed yet again). Get the details by going here.
THE BIG DEAL
• Lyft, a San Francisco-based on-demand transportation company, has raised $1 billion in Series F funding at around a $4.5 billion pre-money valuation.
General Motors led the round with a $500 million investment that also includes strategic agreements, including partnering on an autonomous fleet network. Other new investors include Kingdom Holdings, Janus Capital, Rakuten, Didi Kuaidi and Alibaba Group. Read more.
VENTURE CAPITAL DEALS
• Scholar Rock, a Cambridge, Mass.-based developer of drugs that “selectively target supracellular activation of growth factors in the disease microenvironment,” has raised $36 million in Series B funding. Fidelity led the round, and was joined by Cormorant Asset Management and return backers Polaris Partners, Timothy Springer, ARCH Venture Partners, EcoR1 Capital and The Kraft Group. www.scholarrock.com
• Silvercar Inc., an Austin, Texas-based airport car rental startup, has raised $28 million in Series C funding. Audi led the round, and was joined by return backers like Austin Ventures and Eduardo Saverin. Currently, all of Silvercar’s rentals are silver Audis. Read more.
• Movinga, a Germany-based provider of relocation solutions, has raised $25 million in Series B funding. Index Ventures led the round, and was joined by return backers Earlybird VC, Heilemann Ventures and Global Founders Capital. www.movinga.de
• Hometeam, a New York-based provider of elder home care solutions, has raised $27.5 million in Series B funding. Oak HC/FT led the round, and was joined by return backers Lux Capital, IA Ventures and Recruit Strategic Partners. www.hometeamcare.com
• BionX Medical Technologies Inc., a Bedford, Mass.-based developer of bionic prosthetic devices, has raised $17 million in Series E funding. ZGC Shiner Investment led the round, and was joined by return backers like Gilde Healthcare. The company says it plans to expand the round to $25 million by the end of Q1. www.bionxmed.com
• Quartzy, a Palo Alto, Calif.-based online suite of lab management tools, has raised $17 million in Series B funding. Eminence Capital led the round, and was joined by the YC Continuity Fund and return backers like Khosla Ventures. www.quartzy.com
• Zipnosis, a Minneapolis-based online diagnosis and treatment platform for common medical conditions., has raised $17 million in Series A funding. Safeguard Scientifics led the round, and was joined by Ascension Ventures and return backers Fairview Health Services, Hyde Park Venture Partners, Arthur Ventures, Waterline Ventures and Omphalos Ventures. www.zipnosis.com
• Numi Inc., an Oakland, Calif.-based organic tea company, has raised $16 million in new funding from backers like Catamount Ventures. www.numitea.com
• RapidMiner Inc., a Cambridge, Mass.-based provider of data mining and machine learning solutions, has raised $15 million in third-round funding, according to a regulatory filing. Existing shareholders include Ascent Venture Partners, Longworth Venture Partners, Earlybird Venture Capital and Open Ocean Capital. www.rapidminer.com
• DipJar, a New York-based provider of digital tip jars and donation boxes for credit cards, has raised $2.4 million in seed funding. Corazon Capital, Charge Ventures and individual angels were joined by return backers Bolt and Project 11. www.dipjar.com
• Athletigen Technologies Inc., a Nova Scotia-based sports genetics startup, has raised US$1.55 million in seed funding led by Exponential Partners. www.athletigen.com
• HealPros LLC, an Atlanta-based provider of mobile diabetic retinopathy eye examinations on behalf of healthcare payers, has raised an undisclosed amount of Series A funding led by Sopris Capital. www.healpros.com
• Phytech, an Israel-based provider of agricultural analytics and data management solutions, has raised an undisclosed amount of new VC funding from return backers Syngenta Ventures and Mitsui & Co. www.phytech.com
PRIVATE EQUITY DEALS
• Grovepoint Capital has acquired the UK division of consumer payments company Payzone from Duke Street Capital for an undisclosed amount. www.dukestreet.com
• Partners Group has agreed to acquire a minority equity stake in Hortifruti, a Brazilian health foods retailer with over US$255 million in annual revenue, from Bozano Investimentos. No financial terms were disclosed. www.partnersgroup.com
• Patron Capital and Electra Partners have agreed to acquire Grainger Retirement Solutions, the home reversion equity release business of Grainger PLC (LSE: GRI), for £325 million (including 45 million equity checks from both Patron and Electra). www.graingerplc.co.uk
• The Riverside Company has acquired Euromed SA, a provider of standardized herbal extracts and natural active substances for the pharma, dietary supplement and cosmetic industries. No financial terms were disclosed. The seller was Swiss pharma company Meda. www.riversidecompany.com
• TriWest Capital Partners has acquired ATCO Emissions Management, a Canadian provider of noise and air emissions control solutions, from ATCO (TSX: ACO). No financial terms were disclosed. www.atco.com
• Utility One Source, a Kansas City-based portfolio company of The Blackstone Group, has acquired Load King, an Elk Point, N.D.-based provider of specialty trailers, from Manitex International (Nasdaq: MNTX). No financial terms were disclosed. www.utility1source.com
• Valentus Specialty Chemicals Inc., a Detroit-based coatings company owned by Huron Capital Partners, has acquired North Brunswick, N.J.-based National Paint Industries Inc. for an undisclosed amount.
• No IPO news this morning.
• Actis has agreed to sell Guatemalan electricity distribution business Energuate to I.C. Power Ltd., a wholly-owned subsidiary of Kenon Holdings Ltd. (NYSE: KEN), for around $589 million (including $289m of assumed debt). www.act.is
• Cisco Systems Inc. (Nasdaq: CSCO) has completed its previously-announced acquisition of Lancope Inc., an Alpharetta, Ga.-based provider of network visibility and security intelligence solutions, for around $450 million in cash. Sellers included Canaan Partners, GMG Capital Partners, H.I.G. Capital and Council Capital. www.lancope.com
• Polaris Private Equity has completed its previously-announced sale of a 75% stake in Skanska Byggvaror, a Sweden-based online retailer of building and construction products, to Byggmax (Oslo: BMAX) for around $86 million (and upwards of another $13m in possible earn-outs). www.skanskabyggvaror.se
• BH Media Group, the newspaper unit of Berkshire Hathaway, has purchased Fredericksburg, Va.-based The Free Lance-Star and an affiliated commercial printer, from Sandton Capital Partners for an undisclosed amount. Read more.
• New World Development Co. (HK: 17) is planning to take its $7 billion China unit -- New World China Land Ltd. (HK: 917) private, according to Bloomberg. Read more.
• Paytm has acquired Shifu, an Indian personal assistant app for smartphones, for around $8 million. Read more.
FIRMS & FUNDS
• CI Capital Partners, a New York-based middle market private equity firm, has secured $750 million in capital commitments for its third fund. The firm had been investing out of a $620 million second fund raised in 2008. www.cicapllc.com
• DW Healthcare Partners is raising upwards of $350 million for its fourth fund, according to regulatory filings. www.dwhp.com
• Healthquest Partners, a Menlo Park, Calif.-based venture capital firm, is raising upwards of $175 million for its second fund, according to a regulatory filing. www.healthquestcapital.com
• The Riverside Company is raising upwards of $400 million for its fifth European private equity fund, according to a regulatory filing. It already has secured $125 million, with Evercore serving as placement agent. www.riversidecompany.com
Moving In, On & Up
• Berkshire Partners has promoted Samantha Adams and Thomas Kuo to managing directors. Adams joined the firm in 2012 as director of talent management, while Kuo joined in 2007 to invest in business services, industrial and transportation companies. www.berkshirepartners.com
• Tom Johnson has been named CEO of financial and strategic communications firm Abernathy MacGregor. He previously was the firm’s co-president and head of M&A. www.abmac.com
• Marc Sharpe has stepped down as a managing director with CAZ Investments, which he had joined in 2013 from SigmaBleyzer Investment Group. No word yet on his future plans. www.cazinvestments.com
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