Cirque du LBO
Fortune’s latest feature story, published this morning by my colleague Michal Lev-Ram, is about what happens when private equity takes over the circus. Specifically, TPG Capital and Cirque du Soleil, which the firm acquired in 2015 for around $1.4 billion. A few highlights:
• TPG’s track record of investing in companies in creative fields, including talent agency CAA and Fender Musical instruments have given it some experience, helping the company avoid “tension between the leotards and the suits” at Cirque.
• The company has since replaced Cirque’s senior leadership, killed off “unprofitable distractions” like nightclubs and restaurants, outsourcing the making of certain props, and putting processes in place to professionalize the operation (like hire its first ever CMO).
• In order to appeal to millennials, selfie-breaks are now built into Cirque’s shows.
• The next move is to expand into China. That bodes well for TPG’s exit in its investment: Lev-Ram writes: “Cirque’s prospects as a public company are murky. But given its new China ties, it’s more likely that it would be bought by a Chinese investor or conglomerate. A cash-rich acquirer like Dalian Wanda, for example, which has already snapped up Legendary Entertainment, the company that licenses the Ironman competition and Dick Clark Productions, could easily buy Cirque. And China has huge cities that could host permanent shows and use them to lure tourists, as Las Vegas does today. Read the entire story here.
Cognitive Dissonance: The robots are coming, but not for my job. That’s what I’ve been telling myself about my future as a journalist and it’s apparently what the majority of Americans believe, too. Despite research predicting nearly half of U.S. jobs are at risk of being lost to automation, 47% are not worried at all about losing their jobs to automation, according to a recent survey of 2,000 U.S. adults conducted by LivePerson, a customer service technology company.
A majority of respondents – 59% -- say they are very secure and confident their current job and industry will exist in ten years. And 65% somewhat or strongly agree that “other industries may lose jobs to automation but my job and industry are safe.”
One interesting note for Term Sheet readers: “Those in banking and finance are least likely to think their own industry is disappearing, with 11% selecting accounting and finance as likely to be automated in 20 years.” But keep pouring money into fintech startups… just in case.
Debt vs. Equity: Yesterday’s Term Sheet included an item about Prospa, an Australian fintech startup that had just raised $25 million. An astute Term Sheet reader noticed that the bottom of the press release on the company’s site appeared to include a private note from an investor, executive or PR rep by accident. It said: “Concern on the numbers is that it's not all equity/there is equity versus debt and explaining it will become confusing given most people do not understand funding cycles.”
Craig Blair, who led the deal for Airtree Ventures, confirmed that Prospa’s $25 million is indeed 100% equity. But added, “There have been quite a few 'rounds' announced in market that are a combination of equity and debt to inflate the size of the round.” He’s right, and it’s something we reporters find frustrating. There is a big difference between raising equity and raising debt, and it’s deceptive for startups to paint the latter as the former, just to claim a bigger vanity number in the headline.
More on Beepi: Last week we discussed the demise of Beepi, a well-funded online car marketplace startup. SAIC Motor Corporation, a Chinese automaker that reportedly invested $70 million into the company last year, was supposed to lead the another $90 million round of funding last year. But the company backed out when it realized Beepi had significant in liabilities. SAIC wasn’t excited about the idea of a chunk of their equity going straight to fulfilling the liabilities, and pulled its funding, a person familiar with the situation said. A Beepi rep declined to comment.
THE LATEST FROM FORTUNE...
• Global Tech M&A grew in 2016 while other industries fell
• Is Facebook and Google funding journalism a solution or a Hail Mary?
• Fitbit’s turnaround strategy
• Mark Cuban is not a fan of universal basic income
• Mnuchin promises tax reform by August
…AND ELSEWHERE
Nascar hits the skids. How small business owners respond to political crises. Silicon Valley tried to upend banks. Now it works with them.
VENTURE DEALS
• Tala, a Los Angeles-based startup that provides micro-loans to small-business owners in the developing world, raised around $30 million in Series B funding. IVP led the round, and was joined by Ribbit Capital, Lowercase Capital, Data Collective, Collaborative Fund, and the Female Founders Fund.
• AirMap, a Santa Monica, Calif.-based developer of software for drone navigation, raised $26 million in funding. Microsoft Ventures led the round, and was joined by Airbus Ventures, Qualcomm Ventures, Sony, Rakuten, and Yuneec. Read more at Fortune.
• Knotel, a New York City-based provider of rentable workspaces for startups, raised $25 million in Series A funding. Investors include Invest AG, Bloomberg Beta, Observer Capital, 500 Startups, Rocket Internet, and angel investors.
• Monzo, a London-based digital bank, raised £19.5 million ($24.4 million) in funding. Thrive Capital led the round, and was joined by Passion Capital and Orange Digital Ventures.
• MomentFeed, a Santa Monica, Calif.-based provider of mobile customer experience management for brands, raised $16.3 million in funding. Level Equity led the round, and was joined by Signia Venture Partners, Draper Nexus, and DFJ Frontier.
• C3Nano, a Hayward, Calif.-based developer of transparent conductive inks and films, raised $15 million in funding. GSR Ventures led the round, and was joined by Nissha Printing, Xinjiang Guoli Minsheng Equity Investment, Phoenix Venture Partners, and several undisclosed investors.
• Famoco, a Paris provider of android-based transactional devices, raised €11 million ($11.6 million) in funding. Idinvest Partners led the round, and was joined by Orange Digital Ventures, SNCF Digital Ventures, BNP Paribas Développement, Hi inov, Bpifrance, and Aurinvest.
• Bowery, a Kearny, N.J.-based indoor farming company, raised $7.5 million in a seed funding. First Round Capital led the round, and was joined by Box Group, Lerer Hippeau Ventures, and Tom Colicchio.
• SlamData, a Boulder, Colo.-based open-source analytics company, raised $6.7 million in Series A funding. Shasta Ventures led the round.
• Hostmaker, a London-based hospitality management firm, raised £5 million ($6.2 million) in Series A funding. Ventech led the round, and was joined by DN Capital.
• Collage, a Toronto-based HR and benefits management platform, raised $5 million in seed funding from Diagram.
• Doctor.com, a New York City-based platform that connects patients and healthcare providers, raised $5 million in Series A funding from Spring Mountain Capital.
• Banuba, a Hong Kong-based startup developing technology for augmented reality mobile apps, raised $5 million in funding from Larnabel Ventures and VP Capital.
• Privacy Labs, a Bellevue, Wash.-based consumer privacy and security company, raised $4 million in seed funding. Initialized Capital led the round, and was joined by Lemnos Labs, Liquid 2 Ventures, CrunchFund, and Fuel Capital.
• TL Biolabs, a Santa Clara, Calif.-based provider of genetic and genomic testing services for the agriculture industry, raised $4 million in seed funding. Andreessen Horowitz led the round, and was joined by Refactor Capital, Josh Buckley, and Y Combinator. This item has been updated to show that the company is based in California, not the UK.
• Zappar, a U.K.-based developer of augmented reality tools, raised $3.75 million in Series A funding. Hargreave Hale led the round, and was joined by You & Mr Jones and iDreamSky.
• Shinezone, a Chinese online games distributor, raised ¥400 million ($3.5 million) in Series B funding. Investors include China Fortune Securities, Bank of Ningbo, Shanshan Venture Capital, Jiuyou Fund, Nord Engine Capital, and HTVC.
• Earin, a Swedish maker of wireless earbuds, raised $3.5 million in funding, according to TechCrunch. Read more.
• Storj Labs, an Atlanta-based distributed cloud storage provider, raised $3 million in a seed funding from angel investors.
• Roq.ad, a Berlin-based provider of cross-device advertising services, raised an undisclosed amount in funding from NWZ Digital, PDV, media + more venture, and K – Invest.
HEALTH + LIFE SCIENCES DEALS
• Modus Therapeutics, a Stockholm, Sweden-based clinical-stage drug development company focused on treating patients with sickle cell disease, raised $3.6 million in funding from KDev Investments, Östersjöstiftelsen, and Praktikerinvest.
PRIVATE EQUITY DEALS
• Sycamore Partners will acquire The Limited’s ecommerce and intellectual property for $26.8 million, according to Reuters, beating out Sunrise Brands. The Limited, a New Albany, Ohio-based women’s retailer, filed for bankruptcy last month. Read more.
• Getaway, a designer and operator of "tiny house" rentals, raised $15 million in funding from L Catterton.
• Sciens Building Solutions, a San Francisco-based provider of fire detection services backed by Huron Capital Partners, acquired W.W. Gay Fire & Integrated Systems, a Jacksonville, Fla.-based provider of fire detection and fire suppression systems. Financial terms weren’t disclosed.
• Jansy Packaging, a Fort Lee, N.J.-based packing company backed by Eureka Growth Capital, acquired Cogent Partners, a Pomona, Calif.-based distributor of packaging products and services.
OTHER DEALS
• Saba Software, a Redwood Shores, Calif.-based talent management platform, agreed to acquire Halogen Software (TSX:HGN) for approximately C$293 million ($223.6 million) in cash. Saba raised $30 million in VC funding from investors including Sequoia Capital and Vector Capital.
IPOS
• Sushiro Global Holdings, the operator of Japan’s largest of chain of conveyor-belt sushi restaurants backed by Permira, is preparing for an IPO that could value the company at ¥107 billion ($949 million), according to Reuters. Permira bought Sushiro in 2012 from Unison Capital for about ¥80 billion ($709.4 million). Read more.
EXITS
• Quinpario Acquisition Corp. 2 (Nasdaq:QPAC) agreed to acquire SourceHOV and Novitex Holdings, both backed by Apollo (NYSE:APO), for $2.8 billion, according to the St. Louis Business Journal. The new company, Exela Technologies, will provide financial technology and business services and trade on the Nasdaq Global Select Market. Read more.
• Amobee, a Foster City, Calif.-based digital marketing company that operates as a subsidiary of Singtel, agreed to acquire Turn, a Redwood City, Calif.-based advertising technology platform, for $310 million. Turn raised $163.5 million in equity funding from investors including BlackRock, Fidelity Investments, Greenspring Associates, and Focus Ventures.
• Airbnb confirmed its previously reported acquisition of Tilt, a San Francisco-based social payments company. The deal values the company at $12 million in cash plus “tens of millions” in employee retention packages, according to TechCrunch. Tilt raised $62 million in VC funding, including a $25 million Series B round in 2015 that reportedly valued the company at $400 million. Read more.
• Tennant Company (NYSE:TNC) agreed to acquire IPC Group, an Italy-based manufacturer of commercial cleaning machines and equipment, from Ambienta for $350 million in cash.
• Fireman Capital Partners sold its portfolio company Skip Hop, a New York City-based provider of branded products and accessories for parents, babies and kids, to Carter’s (NYSE:CRI) for $140 million in cash.
FIRMS + FUNDS
• K2 Global, a San Francisco-based private equity and venture capital firm, raised $183 million for a venture capital fund targeted at early stage startups, according to TechCrunch. Read more.
• EQT raised €4 billion ($4.2 billion) for EQT Infrastructure III, its third fund focused on infrastructure investments. This item has been updated with the correct link.
• The Carlyle Group (NASDAQ:CG) raised around $2.5 billion for Carlyle Strategic Partners IV, its fourth distressed and special situations fund.
• Project A, a Berlin-based venture capital firm, raised €140 million ($148 million) for its second fund. In addition, the firm raised €40 million ($42.3 million) for a separate fund that will provide follow-on investments.
• Xsolla, a Los Angeles-based ecommerce platform for video game publishing and distribution, launched Xsolla Capital, a $30 million royalty investment fund to provide backing for independent videogame developers.
PEOPLE
• Christine Aylward has resigned from her position as a managing director at Foresite Capital. She joined the San Francisco-based firm in 2011.
• Yukon Partners has promoted Aaron Arnett to principal and David Sampair to director.
• RCP Advisors has made a series of promotions: Dave McCoy is now a managing partner, Alex Abell, Nell Blatherwick, Michael Feinglass, and Andy Nelson are now partners, and Ross Koenig and Michael Rice are now vice presidents.
• Peter Zimmerman has joined ShoreView Industries as a principal. Previously, he was at Sentinel Capital Partners.
• Jay Galluzzo has joined North Castle Partners as a managing director. Galluzzo is the former CEO of Flywheel Sports.
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