Blind Bets: Yesterday Fred Wilson had some harsh words for Uber CEO Travis Kalnick. By not taking Uber public, Uber is wimping out, Wilson said. “Take the goddamn company public.”
Looking at the performance of tech stocks amid earnings season, and it’s easy to see why Kalanick isn’t in a hurry. It’s ugly out there. GoPro lowered its guidance by $130 million this quarter, and the company’s stock, as my colleague Adam Lashinsky pointed out this morning, is a single-digit stock now, down from more than $65 this summer. LinkedIn beat its quarterly expectations and its shares tanked 33%. Tableau beat its expectations, and yet shares plunged by 50% because of a tax issue. Unless you’re a FANG (Facebook Amazon Netflix Google), investors are ruthlessly unforgiving.
We don’t know for sure how well Uber is doing, but leaks of the company’s financials show it spending like there’s no tomorrow. But because Uber still private, investors don’t seem to care. Yesterday the New York Times reported that a 290-page offering document for a Morgan Stanley fund full of Uber stock offers no financial details to investors. They “are effectively handing over their money with their eyes closed,” according to the Times. And happily! Investors (primarily wealthy individuals) have poured $500 million into the fund.
As I wrote last year, at least in the first tech bubble, we knew how much money the startups were burning. Today’s information scarcity means each new shred of bad news makes us rightly wonder which other startups are hiding dysfunction.
The lack of transparency is a problem for startup investors, and it’s a problem for the companies doing business with startups. But it’s really a problem for startup employees. They often don’t know much more than we do about the health of the companies they work for. Or worse, their CEOs sell them on the gospel of “killing it” even as the wheels fall off.
Some startups, like Pinterest and Gusto, are changing that trend with more internal transparency, as Dan outlined earlier this week. But the sheer volume of hyped-up noise about startup riches (which I admit to being guilty of) drowns out any measured warnings about risk.
That’s why it’s valuable to publish information like the burn rates of startups that employ thousands of people. So if you know which ones are burning more than $3 million a month, feel free to let us know. (Anonymous tips go here.) 💩
Funding scoop: Terry Kawaja, the longtime media and tech banker who made his bones advising AOL in its merger with Time Warner, has launched a venture capital fund. Or, more specifically, his New York-based firm ― Luma Partners ― has launched one. It’s called Luma Capital Partners, and will be led by a pair of Intel Capital vets (Sumeet Jain and Carey Lai) and JT Batson (EIR at Greylock & Accel, ex-Donovan Data Systems and The Rubicon Project). The debut fund target is $100 million, with a small first close already banked.
THE BIG DEAL
• Silver Lake has agreed to invest $500 million in cybersecurity firm Symantec Corp. (NASDAQ: SYMC). As part of the deal, Symantec has agreed to buy $500 million worth of its own shares this month, pay investors a special dividend totaling $2.7 billion, and commit to $2.3 billion in share buybacks over the next year, for a total capital return of $5.5 billion. Read more.
VENTURE CAPITAL DEALS
• Opendoor, a San Francisco-based real estate marketplace startup, raised $80 million in Series C funding from Khosla Ventures, Access Venture Partners, GGV Capital, SVB Capital and others. www.opendoor.com/
• Wevr, a Los Angeles-based virtual reality startup, has raised $25 million from strategic investors. Read more.
• Zendrive, a San Francisco driving analytics company, has raised $13.5 million in Series A funding round led by Shervin Pishevar of Sherpa Capital, alongside Nyca Partners, Thomvest Ventures, and existing investors First Round Capital, BMW i Ventures, Bill Ford’s firm Fontinalis Partners, and Tad Montross. Read more.
• Receipt Bank, a London-based provider of bookkeeping automation software provider announced it has raised $10 million in growth capital from Kennet Partners. www.receipt-bank.com/
• Modsy, a San Francisco-based home design startup, has raised $8 million in funding led by Norwest Venture Partners with participation from angel investors. www.modsy.com/
• FunnelWise, a Des Moines-based marketing software company, has raised $7 million in Series A funding from undisclosed investors. www.funnelwise.com/
• Admedo, a London-based programmatic advertising platform, has raised $6 million in Series B financing led by MMC Ventures. www.admedo.com/
• WiSilica, an Alison Viejo, Calif.-based Internet of Things startup, has raised $3.35 million in venture funding from FirstFloor Capital with participation from Anchor Asia Management and angel investors. wisilica.com/
• Hobnob, a Honolulu-based mobile event startup, raised $2.25 million in seed funding from Norwest Venture Partners, Aspect Ventures, Bessemer Venture Partners and Greycroft. hobnob.io/
• BeON Home, a home protection system startup, raised $2.9M in capital led by Jopeko. beonhome.com/
• Fit Pay, a San Francisco-based payment platform for wearable devices, raised $3.1 million in seed funding from Giesecke & Devrient, with participation from Plug and Play Tech Center, a startup accelerator. www.fit-pay.com/
• PuzzleSocial, a New York-based maker of Daily Celebrity Crossword, raised a $5 million debt round led by existing investor Thayer Bigelow, former president of HBO. www.puzzlesocial.com
PRIVATE EQUITY DEALS
• EEW Energy, a German energy-from-waste company owned by Swedish buyout firm EQT has agreed to an acquisition by Beijing Enterprises Holding for $1.59 billion. www.eew-energyfromwaste.com/en.html
• General Electric is nearing a deal to sell its $115 billion asset management business to State Street Corp, according to Reuters. Goldman Sachs had also bid for the business, which could be worth as much as $500 million. Read more.
• Linsalata Capital Partners has acquired Home Helpers, (H.H. Franchising Systems), an Ohio-based franchisor of in-home senior care. Terms of the transaction were not disclosed. M&A advisor Livingstone represented Home Helpers. homehelpershomecare.com/
• Nlyte Software, a San Mateo-Calif.-based data center service management company, acquired FieldView Solutions, provider of real-time event correlation and analytics. Financial terms were not disclosed. Nlyte is backed by Balderton Capital and NGEN Partners. www.nlyte.com/
• GTCR has made an investment of undisclosed size in TerSera Therapeutics, a company the firm formed in partnership with Ed Fiorentino to acquire specialty pharmaceutical companies and products. www.gtcr.com/
• Castle Venture Group has announced acquired GodCloud, Inc., an internet portal for Christians, for an undisclosed amount. godcloud.info/
• Perkin Industries and Suquet Capital Partners invested in Hispanicize, a Miami-based Hispanic media company, merging the asset with DiMe Media, a Hispanic-focused influencer network. www.hispanicizeevent.com/
• Polaris Private Equity acquired 65% Configit A/S, a Danish Software business, for an undisclosed amount. www.configit.com/
No IPO news today.
• Rocket Internet has sold its food ordering sites in Europe, Mexia and Brazil to Just Eat, a London-based competitor, for $140 million. rocketinternet.pr.co/
• Rock Hill Capital Group has sold Tideland Signal Corp, a provider of navigation technologies to the water industry, to Xylem Inc. Terms were not disclosed. www.tidelandsignal.com/
FIRMS & FUNDS
• General Catalyst has raised $845 million in commitments for its eighth venture fund and a supplemental fund designed for follow-on investments. The firm now manages $3.75 billion. www.generalcatalyst.com/
• Index Ventures has raised $550 million for its eighth venture capital fund. The vehicle will be focused on early-stage investments, alongside a $700 million fund for later-stage investments. indexventures.com/
Moving In, On & Up
• Ron Pillar and Pratik Patel have joined Arma Partners, an M&A advisory firm. Pillar will serve as partner and head of its New York operations and Patel will work as managing director, also based in New York. www.armapartners.com/
• Vestar Capital Partners has promoted Winston Song to principal, and Nikhil Bhat, Matt Dubbioso and Alex Kerr to vice president. www.vestarcapital.com/
• Index Ventures promoted Shardul Shah to partner. Shah joined the firm in 2008 as an associate. indexventures.com/
• Arjun Sethi has joined Social Capital Partnership as an investing partner. Sethi is founder of MessageMe, a messaging app acquired by Yahoo in 2014. socialcapital.com/
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