ALL AI EVERYTHING
Jocelyn Goldfein has worked on some of Silicon Valley’s most iconic products: She spent seven years as an engineering leader at VMware and four years at Facebook. She even interned at Netscape. In 2014, she started angel investing as a “DIY entrepreneur-in-residence” program -- a way to connect with entrepreneurs, learn, and find inspiration for her next startup. But she quickly discovered she was most energized by working with a variety of teams across industries and companies.
Now she’s making investing her full-time job. Goldfein has joined Zetta Venture Partners as a partner.
Mark Gorenberg and Ash Fontana formed Zetta in 2013 to back early-stage software companies powered by artificial intelligence. Goldfein is Zetta’s third partner, joining its second fund, a $100 million vehicle, which closed in the fall. Goldfein’s mentor, VMware founder Diane Greene, introduced her to the firm. Zetta was among the backers of Greene’s last startup, Bebop, which sold to Google for $380.
Goldfein is seeking to back AI companies that have significant “tech risk,” meaning they’re using artificial intelligence to solve novel problems. She’s looking at “places where data has been accumulating without our knowing it, or without our knowing what to do with it.” Agriculture, manufacturing, and IoT are all creating lots of interesting data, she noted.
The recent hype around artificial intelligence is deserved, Goldfein says, “but there’s no free lunch.” In other words: These are hard problems to solve. “AI means rethinking how we fund startups, how we go to market, who we hire, what is our culture, how we organize, as well as issues around privacy and putting our own biases into our algorithms. There’s a lot to figure out.”
Here Is an AI Deal That Happened: Amazon doesn’t like to talk about its acquisitions. That’s why a year has gone by before anyone noticed the company’s cloud division quietly acquired Harvest.ai, a security startup. TechCrunch reported the deal valued the company around $20 million. Here’s how one investor described Amazon’s interest in the company:
Data leakage prevention was around for awhile but pretty clunky to implement. Machine learning makes it a lot easier and the customer can get instant value out of it. For AWS, it’s a no-brainer.
While small, the deal is notable because of the frenzy of investments and acquisitions of AI companies in recent years. Last year AI companies set a new funding record, with nearly $5 billion in investments. Microsoft even launched a venture fund entirely dedicated to AI. For many, the bets are already paying off. Corporations including Google, IBM, Yahoo, Intel Apple and Salesforce acquired least 40 AI startups in 2016, according to CB Insights.
Unicorn Watch: The unicorns are all grown up and funding ponies of their own. First there was Slack’s $80 million fund. Now, Airbnb is doing deals. Yesterday the company announced it led a $13 million investment into Resy, a restaurant booking app. This follows Airbnb’s push into travel guides and partnerships with travel-related services like Foursquare.
Over the holiday, CEO Brian Chesky solicited product feedback on Twitter and hinted that the company would be making some big moves in a few interesting areas this year, including loyalty plans, group travel, and a subscription service to live on Airbnb (hmmm). The most interesting one, from a new revenue perspective, was flights. Too bad the company missed the chance to snap up flight booking startup (and fellow Y Combinator alum) Hipmunk – Concur acquired it in the fall.
Sensing a pattern? Private companies are private, but even public companies like Amazon can keep M&A moves secret. If you see a deal, share a deal. Term Sheet tips are anonymous.
Term Actually Disclosed: Yesterday’s Term Sheet included an item on Mueller Water Products’ sale of Anvil International to One Equity Partners. The deal was for $315 million in cash.
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• Premia Holdings, a Bermuda-based a property and casualty insurance and reinsurance group, raised $510 million in funding. Investors include Kelso & Company, and Arch Capital Group (NasdaqGS:ACGL).
• Kaminario, a Needham, Mass.-based flash storage player, raised $75 million in funding. Waterwood led the round, and was joined by Sequoia, Pitango, Lazarus, Silicon Valley Bank, and Globespan Capital Partners. Read more at Fortune.
• Lalamove, a Hong Kong-based on-demand delivery service, raised $30 million in Series B funding. Xianghe Capital led the round.
• Ivantis Inc., an Irvine, Calif.-based company that makes a device designed to lower eye pressure for glaucoma patients, raised $25 million in Series C funding. RA Capital Management led the round, and was joined by Mérieux Développement and existing investors.
• Lola Travel, a Boston-based travel app, raised $15 million in Series B funding. Charles River Ventures led the round, and was joined by General Catalyst and Accel.
• MobileCause, a Calabasas, Calif.-based digital fundraising and communications platform for nonprofits, raised $15 million in Series B funding. Level Equity led the round.
• Phantom, a Palo Alto, Calif.-based security automation and orchestration platform, raised $13.5 million in Series B funding. Kleiner Perkins Caufield & Byers led the round, and was joined by existing investors TechOperators Venture Capital, Blackstone (NYSE: BX), Foundation Capital, In-Q-Tel, Rein Capital, Zach Nelson, and John W. Thompson.
• Resy, a New York City-based restaurant-booking app, raised $13 million in Series A funding. Airbnb led the round, and was joined by First Data Corporation, RSE Ventures, and Lerer Hippeau Ventures. Read more at Fortune.
• Cloud Elements, a Denver-based provider of API integration and aggregation services, raised $13 million in Series B funding. Harbert Growth Partners led the round.
• Macrophage Pharma Limited, a U.K.-based company developing immunotherapies, raised £9 million ($10.9 million) in Series A funding. CRT Pioneer Fund led the round, with participation from Novo Seeds, and Aglaia Biomedical Ventures.
• Scandit, a San Francisco-based developer of mobile barcode scanning and data capture tools for smartphones, raised $7.5 million in Series A funding. Atomico led the round.
• QikServe, a U.K.-based B2B cloud-based platform for hospitality operators, raised £2.7 million ($3.4 million) in funding. Maven Capital Partners led the round, and was joined by Par Equity, Equity Gap, and Scottish Enterprise.
• Infocyte, a San Antonio, Texas-based enterprise malware and threat hunting technology company, raised $3.4 million in Series A funding. LiveOak Venture Partners led the round, and was joined by Feik Enterprises, and Hollis Family Partnership.
• Choozle, a Denver-based real-time digital marketing platform, raised $2.4 million Series A-1 funding from Great Oaks Venture Capital, Gemini Group, and additional private investors.
• The Athletic, a subscription sports website, raised $2.3 million in seed funding. Courtside Ventures led the round.
• KWIPPED, a Wilmington, N.C.-based online B2B equipment rental marketplace, raised $1 million in funding. VentureSouth led the round.
• Activehours, a Palo Alto, Calif.-based app that enables workers to get paid on-demand, raised $22 million in Series A funding through a combination of debt and equity. Matrix Partners led the round, and was joined by March Capital Partners, Ribbit Capital, Felicis Ventures, and additional existing investors.
• Avalon Healthcare Solutions, a Tampa, Fla.-based laboratory benefits management, raised an undisclosed amount of funding from Mosaic Health Solutions, BlueCross BlueShield of South Carolina, and Francisco Partners.
• Enfusion Systems, a Chicago-based online portfolio and risk management platform for hedge fund managers, raised an undisclosed amount in funding from FTV Capital.
• G Media Studios, a Providence, R.I.-based advertising company, raised an undisclosed amount in funding from Primoris Wealth Advisors.
• Milk Makeup, a New York City-based cosmetics company, raised an undisclosed amount in funding from Main Post Partners.
• Financial-Information-Technologies, a Tampa, Fla.-based provider of data, payment and software services to the beverage alcohol industry, raised an undisclosed amount in funding from Luminate Capital Partners.
PRIVATE EQUITY DEALS
• Blue Sage Capital has acquired Broken Arrow Communications, an Albuquerque, N.M.-based company that offers installation, maintenance, and repair services for wireless communication facilities.
• Garden Fresh Restaurant Corp, a San Diego-based restaurant operator of chains including Souplantation and Sweet Tomatoes, has agreed to sell its assets to Cerberus Capital Management. Garden Fresh Restaurant Corp filed for bankruptcy in October.
• Dermatology Associates, a Tyler, Texas-based skin care company backed by ABRY Partners, has acquired three dermatology practices: Advanced Dermatologic Surgery in Houston, Dr. Bryan Townsend in Austin, and Dermatology and Laser Center of Fort Worth, Texas.
• Thompson Street Capital Partners has recapitalized Revenue Management Solutions, an Oklahoma City-based provider of revenue cycle management services for the healthcare industry. Financial terms were not disclosed.
• ARIAD Pharmaceuticals (NasdaqGS:ARIA) has agreed to be acquired by Takeda Pharmaceutical Company (TSE:4502) for $5.2 billion. At $24 per ARIAD share, the offer represents a 75% premium over the company’s closing price Friday.
• Alibaba (NYSE:BABA) and Shen Guo Jun, the founder of Intime Retail (SEHK:1833), have offered to buy the Beijing-based department store and mall operator private for HK$19.79 billion ($2.55 billion). At HK$10 per Intime Retail share, the bid represents a 42.3% premium over the company’s share price on Dec. 28. Read more at Fortune.
• Gildan Activewear Inc. (TSX:GIL) will acquire American Apparel, a Los Angeles-based retailer which filed for bankruptcy in November, after raising its bid for the company to around $88 million, according to a person familiar with the matter. Read more at Fortune.
• Valeant Pharmaceuticals International (NYSE:VRX) has agreed to sell three skin care lines, CeraVe, AcneFree, and Ambi, to L'Oreal (ENXTPA:OR) for about $1.3 billion in cash. It also agreed to sell Dendreon, its cancer unit, to Chinese industrial conglomerate Sanpower Group for $819.9 million. Read more at Fortune.
• Alphabet Inc. (NasdaqGS:GOOGL) is in talks to sell Skybox, the Mountain View, Calif.-based satellite imaging company it acquired for $500 million in 2014, to Planet Labs, a San Francisco-based satellite imaging startup, according to Bloomberg. Read more.
• Mars Inc. has agreed to acquire VCA (NasdaqGS:WOOF) for $7.7 billion.
• Kyu, a New York City-based fashion and retail site, has acquired BEworks, a Toronto-based firm that uses behavioral economics to solve business and governmental challenges. The price was not disclosed. Read more at Fortune.
• Keane Group, a Houston, Texas-based provider of services for the hydraulic fracturing industry backed by Cerberus Capital, is seeking to raise $300 million in its initial public offering. Pricing terms have yet to be determined. It plans to trade on the NYSE under the ticker symbol FRAC.
• Citrix (NasdaqGS:CTXS) has acquired Unidesk, a Marlborough, Mass.-based app management company. Unidesk raised $36.8 million from investors including Ignition Partners and Matrix Partners. Read more at Fortune.
• ParkOhio (NasdaqGS:PKOH) has acquired GH Electrotermia S.A., a Valencia, Spain-based manufacturer of induction heating products, from Miura Private Equity for about $31 million.
• The Wicks Group has recapitalized Invo HealthCare Associates, a Jamison, Pa.-based provider of therapeutic services for individuals and families with autism and special needs. The seller is Post Capital Partners. Financial terms were not disclosed.
• Amazon Web Services, Amazon’s (NasdaqGS:AMZN) cloud services unit, has acquired harvest.ai, a San Diego-based cyber security firm, for around $20 million, according to TechCrunch. Harvest.ai raised $2.3 million from investors including Moonshots Capital and Trinity Ventures. Read more.
• Fitbit (NYSE:FIT) has acquired Vector Watch, a London-based smart watch brand, for an undisclosed amount, according to TechCrunch. Vector Watch, which launched last year, raised $12 million from backers including 3TS Capital Partners and Gecad Ventures. Read more.
FIRMS + FUNDS
• Morgan Stanley Capital Partners, Morgan Stanley’s (NYSE:MS) private equity platform, raised $1.5 billion for its sixth mid-market fund, North Haven Capital Partners VI.
• Varsity Healthcare Partners, a Los Angeles-based healthcare-focused venture capital and private equity firm, raised $300 million for its second fund.
• Gen Cap America, Inc., a Nashville-based private equity firm, raised $250 million for its seventh buyout fund, Southvest Fund VII, L.P.
• Pool Global Partners, a Toronto-based hard technology-focused venture capital firm, has raised an undisclosed amount for its first fund.
• The Knight Foundation, eBay founder Pierre Omidyar, LinkedIn co-founder Reid Hoffman and other investors have formed a $27 million fund to invest in artificial intelligence research in the public interest.
• Yumin Choi has joined Bain Capital Ventures as a managing director leading the firm's healthcare investments. Previously, Choi led and managed healthcare investments at HLM Venture Partners.
• Michael Dempsey has joined Compound, a New York City-based early-stage venture capital firm, as a principal. Previously, Dempsey was a member of the investment team at Rothenberg Ventures.
• Greg Hughes, David Chung, and Bob Pender have joined HGGC as executive directors. The private equity firm also promoted Pat Dugoni to vice president, and hired James Herrmann as a business development officer.
• Matt Bigge has joined Crosslink Capital as a partner. Additionally, the firm has promoted Omar El-Ayat to from president to partner.
• Harvest Partners has made a series of promotions: Andrew Schoenthal is now a senior managing director, Nick Romano is now a managing director, Michael Greenman, James Mitchel, and David Schwartz are now principals, and Steve Fessler is now a vice president.
• Pritzker Group Private Capital has promoted Brad West from vice president to principal.
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