• The Capital of Fintech: There’s apparently a fight, or battle, or race on between cities to become the Capital of FinTech. Hubs, scenes, ecosystems “capitals,” and various spins on the phrase Silicon Valley are overrated.
I see the benefit of mentorship, available capital, and attracting talent, but I don’t quite see the value in fighting over who has the most and biggest. Berlin’s economy minister launched a letter-writing campaign to beg London fintech companies to move. Singapore and Hong Kong are battling with government-sponsored conferences. Does there really need to be a winner? Can’t fintech just be an everywhere thing? (PS. I can’t help but think this is a sign that the fintech frenzy, and its related valuations, might hitting its peak.)
• Rinse, Repeat: Video streaming app Meerkat may have capitulated to Periscope, but the app used its remaining capital ($17 million from Greylock and others) to build a new video app that’s been riding high in the app store called Houseparty. Meanwhile David Byttow, CEO of failed anonymous messaging app Secret, is thinking about rebooting the app in light of the election as a sort of non-profit. Even Jason Goldberg, CEO of e-commerce flameout Fab.com who once told me he had a 30-year plan for Fab’s pivot, the furniture company Hem, has a new app called Pepo. Lastly, Marco Polo, the hot new deal everyone in the Valley seems to be buzzing about, is parent company Joya Communications’ third app.
The lesson: Success is fleeting it comes to consumer apps. Always raise enough to try, try again.
• Selling out: This morning my colleague Beth Kowitt has published a deep dive into Unilever’s ~$700 million acquisition of Seventh Generation. It’s an interesting exploration into the careful tightrope walked by eco- and health-conscious upstart brands when they decide to join forces to CPG giants:
[CEO John] Replogle, for his part, is sensitive to any suggestion that the deal was a compromise of principles. “We’re not selling out,” he says. “We’re moving forward.”
Likewise, it’s a sign that consumers that have long sought "clean" food are increasingly interested in "clean" personal care products:
The deal is a bet by Unilever on the continued evolution of a species: the eco-conscious consumer—an alert, premium-paying shopper. Initially that group was concerned only (or mostly) with what they put inside their bodies. Next they became more selective about what they put on them—and finally with what’s around them.
In other words, next big “clean” market could be air. Read the entire story here.
• Good Vibes: There are many ways to donate to charity, but doing so via escrow funds is a new one: An M&A services firm called SRS Acquiom has partnered with a charity group called Pledge 1% to launch “EscrowUP,” a charity program for dealmakers.
It works like so: Every M&A deal includes an escrow fund, where the seller sets aside money in case something unexpected comes up after the deal closes. (Approximately two thirds of deals have a escrow claims after closing, though not all are necessarily granted.) Dealmakers that work with SRS Acquoim and want to participate in EscrowUp pick a charity. After the escrow period ends, SRS Acquiom donates 16 to 24 basis points on the amount held in escrow to the charity of the dealmakers’ choice. Currently Springboard Enterprises, Endeavor, Girls Who Code, Patriot Bootcamp, and Pledge 1% are available options.
Just to be clear: the dealmakers do not actually give up any of the escrow money in this situation – that’s coming from SRS Acquiom’s profits. Paul Koenig, co-founder of the firm, argues that this form of donating builds community. “For it to have the biggest impact, it’s not just a one-time thing at the end of the year, it’s more of a way to get the positive peer pressure and community to come together and say, ‘If we all do this we can have a real impact,’” he says. “We want it to be a campaign, not just a donation to charity.”
A number of high profile dealmakers have chimed in with support of the program, including Steve Case of Revolution LLC, who noted that the increase in M&A between startups and Fortune 500 companies provides a greater opportunity for deal parties to give back. Seth Levine, managing Ppartner at Foundry Group, called the program a “no-brainer,” since it has zero impact on deal dynamics and upside to the community. Ron Cami, a partner at Davis Polk, said, "The M&A community has the ability to have a substantial impact on the economy and our communities when we come together. EscrowUP offers a simple and powerful way for us to help those just starting on their entrepreneurial journey."
• Transparency: The California Public Employees’ Retirement System disclosed how much of its profits are shared with its private equity fund managers: 14%. More significant than the actual percentage is the fact that this information was disclosed at all. It’s being characterized as a win for transparency (which many view as inevitable) in a world where the PE funds, not the LPs, hold more negotiating power. PE managers: Thoughts?
THE LATEST FROM FORTUNE...
• Trump's China quandary.
• Getting real about AI.
• Internet mega-attacks on the rise.
• Trump’s silence on bigotry.
• There is no Brexit plan.
• Preparing for the unpredictable.
• The mobile video boom is hurting the carriers.
• Buffett cashes out of Walmart.
• SEC Chair Mary Jo White to step down.
• An Apple headset?
• New regulations could eliminate 80% of Didi’s vehicles in Shanghai.
• Sauce Labs, a San Francisco provider of cloud-based testing for mobile and web applications, raised $70 million in funding from Centerview Capital Technology, IVP, and Adams Street Partners.
• MacroPoint, a Cleveland-based developer of automated location tracking software, raised $44 million in funding from Susquehanna Growth Equity.
• xAd, a New York City-based location marketing and advertising platform, raised $42.5 million in Series E funding. Eminence Capital led the round, and was and joined by W Capital, IVP, and Emergence Capital.
• Nutmeg, a U.K. provider of digital wealth management services, raised £30 million ($37.2 million). Hong Kong financial advisory firm Convoy led the round, and was joined by Schroders, Balderton Capital, Pentech, and Armada Investment Group.
• CareCloud, a provider of cloud-based healthcare solutions for physicians, raised $31.5 million in Series C funding. Blue Cloud Ventures led the round, and was joined by the PNC Financial Services Group and First Data Corporation.
• eOriginal, a Baltimore software firm focused on the management of financial asset documentation, raised $26.5 million from Philadelphia-based private equity firm LLR Partners.
• Quantopian, a Boston-based online platform for developing and testing investment algorithms, raised $25 million in Series C funding. Andreessen Horowitz led the round, and was joined by Bessemer Venture Partners, Point72 Ventures, Khosla Ventures, and Spark Capital.
• Logz.io, an Israeli log analytics software provider, raised $16 million in Series B funding. OpenView led the round, and was joined by 83North and Giza.
• Siemplify, a New York City online information security platform, raised $10 million in funding. 83North and G20 Ventures led the round, with participation from angel investors.
• Musement, a Milan-based digital platform for travel booking company, raised $10 million in Series B funding, according to TechCrunch. Micheli Associati led the round, and was joined by P101, and 360 Capital Partners. Read more.
• Ava, a Zurich-based company that makes fertility-tracking wearable devices, raised $9.7 million in a Series A funding. Polytech Ventures led the round, and was joined by Blue Ocean Ventures, Global Sources, Swisscom, and ZKB.
• Zugata, a Palo Alto, Calif. mobile performance review platform for employees, raised $7 million in Series A funding. Investors include Canaan Partners, General Catalyst, and Redpoint Ventures.
• Prynt, a San Francisco startup that builds printers for smartphone cases, raised $7 million in Series A funding. GGV Capital led the round.
• GoZefo, an Indian refurbished furniture marketplace, raised Rs 40 crore ($5.9 million) in funding, according to The Economic Times. Sequoia India led the round, and was joined by Beenext and Helion Ventures. Read more.
• PlaySimple Games, an Indian mobile social gaming startup, raised Rs 27 crore ($5 million) in Series A funding, according to The Economic Times. SAIF Partners and IDG Ventures India led the round. Read more.
• Midaxo, a Finnish provider of mergers and acquisitions software, raised $4 million in Series A funding. EOC Capital and Finnish Industry Investments led the round.
• Employment Hero, an Australian HR, payroll, and employee benefits platform, closed its Series A round at AU$4.5 million ($3.4 million), according to ZDNet. AirTree Ventures, One Ventures, and AMP Ventures all participated. Read more.
• Gluru, a London-based task management platform, raised $2 million in seed funding. Investors include British Sussex Place Ventures, SAATCHiNVEST, GECAD, and Playfair Capital.
• Kit, a New York City-based platform for product recommendations, raised about $2.5 million in seed funding. Investors include Slow Ventures, Social Capital, Precursor Ventures, April Underwood, Ellen Pao, Authentic Ventures, BATF, and Expa.
• Genetesis, a Cincinnati-based medical device startup that helps physicians detect and characterize cardiac rhythm disorders, raised $1.2 million in seed financing. CincyTech and Radical Investments led the round, with participation from Loud Capital, Danmar Capital, Wilson Sonsini Investment Company, Genetesis management, and angel investors.
PRIVATE EQUITY DEALS
• Five Points Capital has invested in the previously announced LNC Partners-led recapitalization of OutSolve, a Metairie, La. provider of affirmative action planning and compliance services for federal contractors.
• Rubicon Oilfield International, a Warburg Pincus portfolio company, has bought Top-Co Holding, a provider of oilfield casing, cementing and completion products. No financial terms were disclosed.
• Reynolds American, a U.S. cigarette manufacturer, has rejected a $47 billion takeover bid from British American Tobacco. The companies remain in talks and could still reach a deal. Read more at Fortune.
• Grocery shopping center owner Regency Centers agreed to buy Equity One, an East Coast grocery store and retail center operator, for about $4.6 billion in stock, according to Reuters. The deal, which would convert each Equity One stock into 0.45 of a Regency Centers share, values Equity One’s share price at $31.44 based on Regency Centers’ closing price Monday. Read more.
• International Data Group, a global trade publisher and the owner of PCWorld and market research firm IDC, is in discussions to sell itself for more than $1 billion to a Chinese investor group, according to Reuters. Read more.
• Estee Lauder has agreed to buy Too Faced, an Irvine, Calif. cosmetic company, for about $1.45 billion. Too Faced, which expects sales to exceed $270 million this year, is backed by private equity firm General Atlantic. Read more at Fortune.
• General Electric has acquired ServiceMax, a Pleasanton, Calif.-based developer of cloud-based field service software, for $915 million. ServiceMax raised $204 million from investors including Trinity Ventures, GE Ventures, Mayfield Fund, and Crosslink Capital. Read more at Fortune.
• Accion Venture Lab has sold its stake in Varthana, a Bangalore-based specialized loans provider for private school tuition in India.
• TGP Capital Partners has acquired Dynamatic, a Sturtevant, Wis. manufacturer of speed drives, brakes, and controls, from Woodlawn Partners. No financial terms were disclosed.
• Trivago, an online hotel search aggregator, has filed to go public, with a goal of raising $400 million. It plans to trade on the Nasdaq under the ticker symbol TRVG. Expedia purchased a 62% stake in Trivago for $531 million in 2012.
FIRMS + FUNDS
• Permal Capital Management, a Boston-based private equity fund, raised $465 million for its fifth secondary fund, Permal Private Equity Opportunities V.
• Spark Capital raised $400 million for its fifth early-stage fund, Spark V, and $600 million for its second growth fund, Spark Growth II.
• Jeff Schiamberg and Theodore E. Tutun have joined Cowen Group as managing directors, working in the firm’s consumer banking group and as the head of East Coast sponsor coverage, respectively. Schiamberg was previously a managing director at RBC. Tutun was most recently at Jefferies.
• Dan Zabrowski has joined Decheng Capital as a venture partner.
• Thomas Mokulehua has joined Corridor Capital as a director of finance on the firm’s operations team. Previously Mokulehua worked at DaVita HealthCare Partners.
SHARE TODAY'S TERM SHEET
Term Sheet is produced by Laura Entis. Submit deal items here.