Good morning! In today’s guest column, Fortune writer Robert Hackett weighs in on Uber’s terrible, no good, very bad start to 2017—plus discusses one of the biggest cyber deals of the week: CA Technologies’ acquisition of Veracode. Follow him on Twitter.
The world’s most highly valued private company has had a rough year. Between “#DeleteUber,” a Waymo lawsuit, allegations of flagrant misogyny in the workplace, a video of the CEO berating a driver, and the Greyball incident, you’d be forgiven for not remembering each and every infelicity. Did I miss any?
Now is the time for reform, apparently. Following through on a promise to seek “leadership help,” Uber boss Travis Kalanick yesterday revealed his plan to hire a number two—or as multiple people have described the enlistment, a Sandberg to his Zuckerberg. (But really, pick your favorite analogy: a good cop to his bad cop, a yin to his yang, a Whitecube to his Greyball, etc.) “This morning I told the Uber team that we’re actively looking for a Chief Operating Officer: a peer who can partner with me to write the next chapter in our journey,” he wrote on the company blog Tuesday.
The move is a good one, but it’s only part of the equation.
Earlier this week I spoke to Mitch Kapor and Freada Kapor Klein, who jointly manage Kapor Capital, an early investor in Uber, for a story detailing the company’s unremitting series of mishaps that will appear in an upcoming issue of Time, sister publication to Fortune. The husband and wife venture capital duo, a well-established Silicon Valley power couple, made headlines recently when they decided to publish an aggrieved open letter about their portfolio company’s allegedly hostile and sexist culture. We chatted prior to Kalanick making the job posting for a lieutenant publicly known, but some of that conversation, which otherwise might end up on the cutting room floor, was relevant.
Here’s the bit that stood out: “Having a senior person come in, or changing Travis’ role—that wouldn’t magically be the answer,” Klein told me when I asked what it would take to mend the firm’s values. “That might be part of a larger set of steps, but neither of those has to be essentials for the company [culture] changing.”
Rather, Kapor and Klein recommended that Uber implement a “very well thought out strategy with short term, medium term, and long term initiatives and goals that have got to touch every aspect of the business.” As many tech companies have discovered, fostering diversity and inclusion is no simple task when those values are not baked in from the start. Board member Arianna Huffington and HR head Liane Hornsey are reportedly putting together a set of new practices and rules for the company to address the problem, as Recode has reported.
“It’s a heavy lift,” Klein said, pausing to consider the word, which happens to be the homophonic name of Uber’s biggest domestic rival, Lyft.
“That’s without the ‘y’,” she wryly clarified.
(One more thing: If you’re interested in more on this topic, consider subscribing to raceAhead, a Fortune newsletter dedicated to corporate diversity initiatives.)
Since security is my usual beat, I figured I would comment on the big cyber deal of the week: CA Technologies announced Monday that it would purchase Veracode, a Massachusetts-based application security firm, for $614 million in cash. The company had raised about $110 million before privately filing for an IPO two years ago, as Fortune then reported.
The acquisition shows just how much DevOps (short for software development and IT operations) has become all the rage in techland. The management practice involves a leaner and more agile way of running software development teams to speed up their pace of delivery. Veracode sells software that helps those teams do quality assurance and vulnerability testing continuously during the build process. CA wants access to Veracode’s customers so it can sell them more tools of this sort—a foothold it will now have.
Forrester analyst Amy DeMartine put it nicely when she said that “along with most large technology companies, CA Technologies is on the digital transformation bandwagon and touts that applications are at the center of this transformation,” as she wrote in a recent report covering the impact of the deal. “With the acquisition of Veracode, CA Technologies gives credence to the basic need of companies to secure their applications before release.”
Speaking of which, someone should tell Confide, the “secure” chat app startup, about that basic need. The messenger gained notoriety this year as a go-to for some Republicans in government looking to keep their conversations confidential. Well, some researchers at the security firm IOActive recently found a bunch of problems with the app during a recent audit.
A bit of advice? If you’re going to leak the latest and greatest deal news to us at Fortune—which we encourage—use the anonymous tip tool at the top of this newsletter or request the Signal app number for one of our reporters. All leaks are welcome. —Robert Hackett
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HEALTH + LIFE SCIENCES DEALS
• Spero Therapeutics, a Cambridge, Mass. biopharmaceutical company developing therapies to treat bacterial infections, raised $51.7 million in Series C funding. GV led the round, and was joined by RA Capital Management, Rock Springs Capital, and additional existing investors.
PRIVATE EQUITY DEALS
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• SoftBank (TSE:9984) plans to transfer an $8 billion stake in ARM, a U.K. chipmaker, to a technology investment fund it created with Saudi Arabia. Read more at Fortune.
• Sterling Bancorp (NYSE:STL) agreed to buy Astoria Financial (NYSE:AF) for about $2.2 billion in stock, according to Reuters. At $21.92 per Astoria Financial share, the deal values the company at a 18.6 premium to its Monday closing price. Read more.
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FIRMS + FUNDS
• Symantec (NasdaqGS:SYMC) launched Symantec Ventures, a new venture capital arm that will invest in cyber security startups.
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• George Rolfs has joined Soundcore Capital Partners as an associate. Previously Rolfs was an associate at Cambridge Associates.