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Term Sheet — Thursday, June 23

Random Ramblings

Today’s big deal is that Twilio raised $150 million in its IPO, pricing one dollar above the top end of its $12-$14 per share offering range. That means that the cloud communications software unicorn is valued higher than it was in its most recent round of private funding (by 19%, or 4.3% once you factor in the new $150 million).

To be sure, there are a lot of venture capital and growth equity sighs of relief this morning. Not only at the valuation bump (however slight), but just the demonstrated fact that there is an accepting public market for high-growth, unprofitable software companies.

But this isn’t to say that everyone is blowing balloons. Over the past day I’ve heard a lot of concern about Twilio choosing to price right into the Brexit vote, thus making its aftermarket performance particularly prone to macro risk. In short: Why today of all days?

A few thoughts on that:

1. The markets are up sharply in early trading this morning, apparently reflecting a belief that Brexit will go the way of Y2K. Indeed, a source close to Twilio tells me that the company and its bankers do not believe the vote will be terribly close.

2. Part of the move seems to be typical aggressiveness by lead banker Goldman Sachs, which recently earned grumbles from other investment bankers for top-ticking the Cotiviti IPO (thus, arguably, depressing aftermarket performance and making investors less interested in IPOs).

3. Here was a delightfully cynical view one private equity investor who isn’t in the company: “This is a win-win for Twilio. If Brexit fails, then it gets to ride a massive market wave. If Brexit succeeds, then Twilio manages to go public before the markets collapse and the IPO window slams shut. Plus, no one will blame Twilio for the lousy stock performance. This may be the best day to go public, not the worst. I’d bet they intentionally planned it this way.”

4. It also is worth noting that we won’t actually know the Brexit results until well after U.S. markets close today. The first results are supposed to come in after midnight local time (7pm ET), so the real trading impacts will be felt first in Asia.

• New firm alert: Jesse Draper, the daughter of Tim Draper and host of the Valley Girl web series, has launched a new VC effort called Halogen Ventures. Not too many details yet, except the focus is primarily on early-stage consumer tech startups.

 

• PE poach: Noah Knauf, a longtime managing director with Warburg Pincus, has joined venture capital firm Kleiner Perkins as a general partner in its digital growth practice.

News of the hire was first shared with Kleiner Perkins investors yesterday morning via email, and Knauf later was added to the firm’s website. Kleiner Perkins itself isn’t talking, likely because it’s putting the finishing touches on its latest early-stage and digital growth funds (the latter of which is expected to raise $1 billion).

Knauf has been with Warburg Pincus since 2006, focusing primarily on healthcare and healthcare services deals. At Kleiner Perkins, Knauf is expected to continue to be more of a generalist, investing in both healthcare and technology companies. He will be one of four general partners in the digital growth practice, alongside Mary Meeker, Ted Schlein and Mood Rowghani.

THE BIG DEAL

Twilio, a San Francisco-based provider of cloud communications software, raised $150 million in its IPO. The company priced 10 million shares at $15 per share (above $12-$14 range), for an initial market cap of approximately $1.23 billion. That’s higher than the $1.03 billion valuation Twilio received during its last venture capital round.

The company will trade on the NYSE under ticker symbol TWLO, while Goldman Sachs and J.P. Morgan served as co-lead underwriters. Twilio has raised around $240 million in VC funding, from firms like Bessemer Venture Partners (28.5% pre-IPO stake), (13.6%) and Fidelity (6.1%). 

VENTURE CAPITAL DEALS

• Circle, a Boston-based social payment app using blockchain technology, has raised $60 million in new VC funding. IDG Capital Partners led the round, and was joined by Baidu and return backer Breyer Capital. The company has now raised more than $136 million in total VC funding. Read more.

• Narvar Inc., a San Bruno, Calif.-based post-purchasing solutions platform for retailers, has raised $22 million in Series B funding. Battery Ventures led the round, and was joined by Fung Capital and return backers Accel and Freestyle Capital. Read more.

• SecurityScorecard, a New York-based provider of global threat intelligence and risk awareness solutions, has raised $20 million in Series B funding. Google Ventures led the round, and was joined by return backers Boldstart Ventures, Evolution Equity Partners and Sequoia Capital. Read more.

• Pearl Capital Business Funding LLC, a New York-based provider of direct financing to small and mid-sized businesses, has raised $20 million from Arena Investors. www.pearlcapital.com

• Juniqe, a Berlin-based online art marketplace, has raised EUR 14 million in new VC funding. Highland Europe led the round, and was joined by return backers Vorwerk Ventures, High-Tech Gründerfonds and Redalpine. www.juniqe.com

• AppZen, a Mountain View, Calif.-based artificial intelligence solution for back-office automation, has raised $2.9 million in seed funding. Resolute Ventures led the round, and was joined by Bloomberg Beta, Silicon Valley Bank, FundersClub and MasterCard. www.appzen.com

PRIVATE EQUITY DEALS

• Amplus Energy Solutions, a portfolio company of I Squared Capital, has acquired SunEdison India’s portfolio of commercial and industrial rooftop projects. No financial terms were disclosed. www.amplussolar.com

• The Carlyle Group and CCMP Capital Advisors are among those in the second round of bidding for Fort Dearborn Co., an Elk Grove, Ill.-based company currently owned by KRG Capital Partners, according to Bloomberg. The deal could be valued at around $800 million, with final bids due next month. Read more.

• Cerberus Capital Management has agreed to acquire GE Money Bank, a French consumer credit business, from General Electric Co. (NYSE: GE). The sale would represent ending net investment equivalent to around $4.6 billion (as of 3/31), and would not include GE Money Bank’s $2 billion mortgage loan portfolio. www.ge.com

Equistone Partners has acquired a majority stake in Sihl Group, a Swiss maker of coated papers, films and fabrics, from Italy’s Diatec Holding. No financial terms were disclosed. www.sihl.ch

• Freeman Spogli & Co. has acquired Integrated Supply Network, a Lakeland, Fla.-based wholesale distributor of automotive tools, equipment and supplies, from Audax Group. No financial terms were disclosed. www.isnweb.com

• Mid Europa Partners has agreed to increase its ownership stake in Waberer’s International, a Budapest-based logistics and hauling company, from 56.8% to 97.1%. Read more.

• Mitratech, an Austin, Texas-based provider of enterprise legal management solutions, has acquired CMO Software, a London-based provider of EHS and GRC solutions. No financial terms were disclosed. Mitratech is a portfolio company of TA Associates. www.mitratech.com

• Petroleos Mexicanos (a.k.a. Pemex) is nearing a $500 million sale-leaseback agreement with private equity firm First Reserve, according to Bloomberg. This reportedly would be in addition to a $1.2 billion sale-leaseback deal that Pemex reportedly closed recently with KKR. Read more.

• Snow Phipps Group has acquired ECRM, a Salon, Ohio-based collaborative retail marketing company, from BV Investment Partners. No financial terms were disclosed. www.ecrm.marketgate.com

• Thoma Bravo has acquired Bomgar, a Ridgeland, Miss.-based provider of secure access solutions, from TA Associates. No financial terms were disclosed. www.bomgar.com

IPOs

• Fullerton Health, a Singapore-based provider of corporate medical services, is prepping an IPO that could value the company at upwards of $1 billion, according to the FT. Bloomberg had reported last fall that a Fullerton offering could raise around $300 million. Shareholders include Southern Capital Group. Read more.

EXITS

• Pinterest has agreed to an acqui-hire of the team behind Tote, a San Francisco-based fashion shopping app backed by Plug and Play Ventures. No financial terms were disclosed. Read more.

• Purch, an Ogden, Utah-based digital content and commerce company, has acquired Business.com, an online provider of small business information and services. No financial terms were disclosed. Purch has raised over $170 million in VC funding from firms like Canso Investment Counsel, ABS Capital Partners, Highway12 Ventures and Village Ventures. Business.com backers included JMI Equity. Read more.

• Snapgajob has agreed to acquire PeopleMatter, a fellow provider of hourly market hiring solutions. No financial terms were disclosed. Virginia-based Snagajob has raised around $148 million in VC funding, from firms like Invus Group, NewSpring Capital and Rho Ventures. PeopleMatter has raised over $60 million in VC funding from firms like Harbert Growth Partners, Morgenthaler, Intersouth Partners, Noro-Moseley Partners, Scale Venture Partners and StarVest Partners. www.snagajob.com

OTHER DEALS

• Google Fiber has acquired San Francisco-based Internet service provider Webpass for an undisclosed amount. Read more.

FIRMS & FUNDS

• The Blackstone Group has acquired a passive, minority interest in Marathon Asset Management, a New York-based credit-event driven hedge fund manager with $12.8 billion in assets under management. Marathon also announced that partner and COO Andrew Rabinowitz has been promoted to president and COO, while Vijay Srinivasan has assumed global credit research responsibilities (succeeding Rich Ronzetti, who is retiring). Read more.

• Goldman Sachs is targeting $5 billion for its seventh “Vintage” secondaries fund, which focuses on mature buyout and distressed investment portfolios, according to Private Equity International. Read more.

MOVING IN, ON & UP

• The Canada Pension Plan Investment Board made several personnel moves: Alain Carrier was named head of international activities, succeeding new CEO Mark Machin (Carrier also will remain head of Europe); Suyi Kim will take over as head of Asia; Deborah Orida will take Kim’s previous position as head of Asia private equity. www.cppib.ca

• Charlesbank Capital Partners has promoted Joshua Beer and Jason Pike to managing director. Beer’s portfolio companies include Varsity Brands and FullBeauty Brands, while Pike works with American Residential Services, HDT Global and StoneCastle. www.charlesbank.com

• Damon Cronkey has joined XSeed Capital as a partner. He previously was EVP of corporate development and strategy at SurvfeyMonkey. www.xseedcap.com

• Jackie DiMonte has joined Hyde Park Venture Partners as an associate. She previously was a program manager for Silver Spring Networks. www.hydeparkvp.com

• Kobie Fuller has joined Upfront Ventures as a general partner. He previously was with Accel, and will relocate from Silicon Valley to Los Angeles. www.upfront.com

• Colin McCarthy has joined Boulder, Colo.-based private equity firm Grey Mountain Partners as a senior associate. He previously was with Maranon Capital. www.greymountain.com

• Bridget McKenna has joined TIAA as director of asset management business development. She previously was a vice president with Aetos Capital. www.tiaa.org

• Christopher Nam has joined Mizuho as a managing director and head of North American Internet and digital media investment banking. He previously was with Credit Suisse. www.mizuho.co

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