Random Ramblings
Some notes to kick off your Wednesday:
• Devil in the details: We still don't know why Andrew Caspersen perpetrated his alleged private equity fraud, but we are getting some answers about how he managed to... ummm... "borrow" $8.1 million from his employer, Park Hill Group (a unit of PJT Partners), before repaying it via money pilfered from The Moore Charitable Foundation (and, amazingly, $3 million from his own family).
According to The NY Times, Park Hill's payment process allowed him to "personally send out invoices to clients... and his employers learned of the improper wire transfers only about a week before his arrest because they appeared legitimate."
Park Hill apparently is reviewing a process that, while designed to foster closer relations between its staff and their clients, is clearly ripe for abuse.
• Oscar's grouch: Bright Health this morning announced that it has raised $80 million in Series A funding co-led by Bessemer Venture Partners and NEA, with Flare Capital Partners and Waterline Ventures also participating.
We beat the press release to the punch with a post yesterday, but this basically is a big new challenger for Oscar Health, which most recently was valued at $2.7 billion (post-money) by firms like Fidelity. Unlike Oscar, which was launched (and initially funded) by technologists, Bright Health is a tech-enabled consumer health insurance company led by a big-name health insurance executive: Rob Sheehy, the former CEO of UnitedHealth.
The Minneapolis-based startup plans to partner with major healthcare providers (including big metro hospitals), and begin providing coverage for 2017. No word yet on the partners or initial markets, except that it will focus on both individuals and Medicare Advantage.
"The goal here is to get rid of the fissure between payers and providers," says Steve Kraus, a partner at BVP and a Bright Health board member. "I wouldn't want to go up against a UnitedHealth or Aetna in the commercial market, but there is clearly now an opportunity for individuals."
• Breaking up [banks] is hard to do: I obviously agree with Bernie Sanders on the need for a change to carried interest tax treatment. But after yesterday's interview with the NY Daily News, I'm very curious to know if Sanders knows that carried interest actually is, or what the arguments are for maintaining the status quo...
• Term Sheet Review of Books: Over the weekend I read Disrupted, the buzzy book from tech journalist Dan Lyons, about his year or so working at marketing software company (and successful 2015 IPO issuer) Hubspot. You might recall that this is the tome that two senior Hubspot execs apparently tried to illicitly obtain prior to publication, costing them their jobs (although one has since landed on his feet at Insight Squared, while the other is working on an AngelList syndicate).
In short: If you work in tech or tech investing, you should read it. This isn't to say that I agree with everything the 50-something Lyons wrote, and clearly his focus on age bias is, in some part, undercut by his own bias against the abilities of younger workers. But he does put an awful lot of meat on the bone, and his book made make think a lot harder than I think he intended it to. Plus, he can write.
From a business perspective, Lyons also calls out a fundamental hypocrisy about Hubspot, in that it champions an "inbound" marketing technology while itself relying on more traditional sales reps. Very curious to hear your thoughts...
• Personnel scoop: Blake Coler-Dark has joined FCVC Advisors, the family office and institutional unit of FundersClub. He previously led IR for Echelon Asset Management and, before that, was part of the pre-IPO team at LendingClub.
• Answer Key: Yesterday I asked you to name the Boston startup that currently employs the most Vistaprint alums. A bunch of you correctly answered DraftKings, and the first ten received tickets to Thursday night's TUGG Wine & Tequila Party. If you got it wrong (or too late), I still encourage you to buy a ticket and attend. It's always a great time, and supports folks who are doing very important work.
• Publishing note: I'll be flying down to Chapel Hill tomorrow afternoon to help judge the VCIC International Finals ― and perhaps console some Tar Heels fans (that includes you, dad) ― which means Erin Griffith (@eringriffith) will pinch-hit on Friday.
THE BIG DEAL
• Pfizer (NYSE: PFE) this morning called off its proposed $160 billion purchase of Allergan (NYSE: AGN), following the announcement of new U.S. Treasury rules designed to curb tax inversions. As part of the mutual termination, Pfizer will pay Allergan $150 million as reimbursement for deal-related expenses. Read more.
VENTURE CAPITAL DEALS
• Human Longevity, a San Diego-based developer of a database of whole genome, phenotype and clinical data, has raised $220 million in Series B funding. Backers include Illumina, Celgene, GE Ventures and DFJ. The company previously raised an $80 million Series A round at a $272 million pre-money valuation. www.humanlongevity.com
• Finanzcheck, a German consumer loans marketplace, has raised €33 million in Series C funding. HarbourVest led the round, and was joined by Acton Capital Partners and return backer Highland Europe. www.finanzcheck.de
• CrossChx, a Columbus, Ohio-based provider of healthcare identity solutions, has raised $15 million in Series C funding. Backers include Silicon Valley Bank, Khosla Ventures, Drive Capital, NCT Ventures and Moonshots Capital. www.crosschx.com
• Vasona Networks Inc., a Santa Clara, Calif.-based provider of software that improves mobile carrier infrastructure efficiency, has raised $14.6 million in Series C funding from Bessemer Venture Partners, New Venture Partners and NexStar Partners. www.vasonanetworks.com
• Kyulux Inc., a Japanese developer of OLED display and lighting technologies, has raised $13.5 million in Series A funding from firms like Samsung Display, LG Display, Japan Display and JOLED. www.kyulux.com
• Haptik, an Indian mobile concierge service, has raised $11.2 million in Series B funding led by Times Internet, according to TechCrunch. Read more.
• LiveSafe Inc., an Arlington, Va.-based mobile safety communications platform, has raised $5.25 million in Series B funding from an entity affiliated with FedEx CEO Fred Smith. www.livesafemobile.com
• Anchore, a Santa Barbara, Calif.-based developer of a solution for inspecting, tracking and securing software containers, has raised $2.5 million in seed funding from Menlo Ventures and e-ventures. Read more.
PRIVATE EQUITY DEALS
• ABRY Partners has agreed to acquire SambaSafety, an Albuquerque, N.M.-based provider of cloud-based driver risk management solutions. No financial terms were disclosed. Sellers include Main Street Capital Corp. www.sambasafety.com
• Chauvet & Sons LLC, a Sunrise, Fla.-based provider of LED lighting products for entertainment and architectural lighting markets, has secured an undisclosed amount of private equity funding from Cortec Group. www.chauvetlighting.com
• Emerson Electric Co. (NYSE: EMR) has discussed a sale of its network power business with suitors like Siemens AG and Platinum Equity Partners, according to Reuters. A deal could be valued at upwards of $4 billion. Read more.
• Internet Truckstop Group, a New Plymouth, Idaho-based provider of tech solutions to the freight supply chain, has secured an undisclosed amount of private equity funding from Bregal Sagemount. www.truckstopgroup.com
• Jensen Hughes, a Baltimore-based portfolio company of Gryphon Investors, has acquired Aon Fire Protection Engineering, a Glenview, Ill.-based provider of fire protection engineering, fire code consulting and security services, from Aon Corp. (NYSE: AON). No financial terms were disclosed. www.jensenhughes.com
• The Jordan Company has acquired TKE Enterprises, a Dallas-based maker of decorative and functional hardware for the kitchen and bath industry. No financial terms were disclosed, except that the deal was supported by a $224 million senior secured credit facility lead arranged by Antares Capital. www.thejordancompany.com
IPOs
• The Carlyle Group is planning an IPO for Yakjin Trading after failing to find a buyer for the South Korean garment manufacturer, according to The Korea Herald. TPG Capital had been among those that considered making an offer. Read more.
• Cotiviti Corp., an Atlanta-based healthcare payment processing and auditing company, has hired J.P. Morgan and Goldman Sachs to lead an IPO that could value the company at around $3 billion, according to Bloomberg. Cotiviti is owned by Advent International. Read more.
• inVentiv Group Holdings, a Burlington, Mass.-based provider of outsource clinical and commercial services to the life sciences market, has filed for a $100 million IPO. That figure is likely as placeholder, with Renaissance Capital estimating that the offering could eventually be designed to raise $500 million. Credit Suisse and Morgan Stanley are serving as lead underwriters. The company reports a $150 million loss on $2.32 billion in revenue for 2015. Shareholders include Thomas H. Lee Partners. www.inventivhealth.com
EXITS
• Ally Financial Inc. (NYSE: ALLY) has agreed to acquire TradeKing Group Inc., a Charlotte, N.C.-based digital wealth management company, for around $275 million. TradeKing had raised around $33 million in VC funding from firms like Battery Ventures, Velocity Capital Private Equity, Milestone Merchant Partners, G2 Holding, OCA Venture Partners, GTCR and Legent Holding. www.tradeking.com
• KKR has hired UBS to find a buyer for its 45% stake in Genesis Care, an Australian provider of radiation oncology services and cardiovascular care, according to the WSJ. Read more.
• Huatai Securities Co. (SHSE: 601688) is seeking to acquire AssetMark Inc., a Concord, Calif.-based maker of software for the asset management market, for upwards of $800 million, according to Reuters. Several private equity firms also have expressed interest. AssetMark currently is owned by Aquiline Capital Partners and Genstar Capital. Read more.
• Persistent Systems has acquired Genwi, a San Jose, Calif-based provider of a customizable marketing platform. No financial terms were disclosed. Genwi backers included Floodgate and the individual partners of Elevation Partners. www.genwi.com
• Schoeller Bleckmann Oilfield Equipment has acquired a 68% stake in Downhole Technology, a Houston-based provider of composite frack plugs, from Pelican Energy Partners. The deal includes an option whereby Schoeller Bleckmann can acquire the remaining ownership stake from company management after three years. www.downholetechnology.com
• Toptal, a San Francisco-based online talent marketplace for software developers, has acquired Skillbridge, a New York-based platform for the on-demand business talent space. No financial terms were disclosed. Toptal is a portfolio company of Andreessen Horowitz, while Skillbridge had been backed by First Round Capital. www.skillbridge.co
OTHER DEALS
• Alibaba Group (NYSE: BABA) has completed its previously-announced acquisition of the South China Morning Post, a Hong Kong-based newspaper, for approximately $262 million. www.alibaba.com
• Glencore (LSE: GLEN) has agreed to sell 40% of its agriculture unit to Canada Pension Plan Investment Board for $2.5 billion. Read more.
• SurveyMonkey has acquired Renzu, a San Francisco-based data analytics app, for an undisclosed amount. Read more.
• The U.S. Justice Department will file a lawsuit to block Halliburton (NYSE: HAL) from acquiring Baker Hughes (NYSE: BHI), according to Reuters. Read more.
FIRMS & FUNDS
• Aquiline Capital Partners, a New York-based private equity firm focused on the financial services sector, has closed its third fund with more than $1.1 billion in capital commitments.
• HarbourVest Partners has closed a new Canadian venture capital fund-of-funds with C$375 million in capital commitments. www.harbourvest.com
• H.I.G. Capital has closed a new private equity fund focused on Brazil and Latin America with $740 million in capital commitments. www.higcapital.com
MOVING IN, ON & UP
• The Blackstone Group has made several changes to its Asia team: Chris Heady, head of Asia real estate, is now chairman of Asia Pacific; Jan Nielsen, current head of Southeast Asia private equity, will be COO for all Blackstone Asia Pacific; Carol Kim is now COO of Asia Pacific investor relations; Daisuke Kitta, head of Japan real estate, is now head of all Japan activities; and Susannah Lindenfield, current head of international compliance, is now general counsel for Asia Pacific. www.blackstone.com
• Rex Chung has joined EIG Global Energy Partners as a Hong Kong-based managing director and co-head of Asia. He previously led the Asia capital markets and client and partner groups at KKR. www.eigpartners.com
• Walt Jackson has joined Onex Credit to launch a direct lending platform. He previously was COO of the private credit group at Goldman Sachs. www.onex.com
• Venktesh Shukla, chairman of TiE Global and president of TiE Silicon Valley, has agreed to join Fenox Venture Capital as a general partner. www.fenoxvc.com
• Ed Trissel has joined PR firm Joele Frank as a partner. He previously was chief communications officer for Warburg Pincus. www.joelefrank.com
• Colin Welch has joined TSG Consumer Partners as a New York-based partner. He previously was president and CEO of Financo LLC and CEO Financo Europe. www.tsgconsumer.com
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