CRYPTO WEEK CONTINUES
Happy Friday. It’s Jen Wieczner again, so keep the tips and feedback coming to email@example.com or on Twitter @jenwieczner. Erin is still on vacation, which means I can still fill your Term Sheet with, in her words, “cryptonerd stuff” for another day.
As I was heading out to a blockchain panel discussion last night (more on that later), the New Yorker published an expletive-ridden and almost too-outrageous-to-be-true interview with Anthony Scaramucci, the new White House communications director. I say almost too outrageous to be true because I’ve spoken with Scaramucci on several occasions. And Ryan Lizza’s interview is 100% pure Mooch—from referring to himself in the third person (“The swamp will not defeat him”); to his passionate, unfiltered “I’m from Long Island” candor; to his snarky impressions of others’ voices (impersonating Priebus: “ Let me leak the f-ing thing and see if I can cock-block these people the way I cock-blocked Scaramucci for six months”).
Scaramucci had cold-called Lizza to demand who told the journalist about the Skybridge Capital founder’s dinner with the President. This reminded me of a time the Mooch had called me to talk about another dinner, one he had with the hedge fund billionaire Steve Cohen at last year. This conversation ultimately became the lead to my recent magazine profile of Cohen and his hedge fund comeback.
But a few things never made it into the story, including how the conversation began. It was Oct. 11, and at the time, uproar over the just-leaked Billy Bush tapes (featuring Trump’s “grab them by the p-ssy” comments) was at a fever pitch. Scaramucci called me, and here’s the first thing he said when I picked up the phone: “Hey Jen, tell me something—you think those ‘Make America Horny Hats’ are going to sell?”
I was so taken aback I didn’t immediately get the joke. “I just thought it was funny,” Scaramucci explained, “After another day where my guy is falling apart.”
By “my guy,” of course, he meant Donald Trump. Back then, even Scaramucci wasn’t taking his candidate’s candidacy entirely seriously. At his holiday party a couple of months later, I asked him about this, and whether he’d always wanted to go into politics.
“You know, I never thought about it before,” he said. “I’ve always been an entrepreneur. But you never know what’s going to happen to you in life. Let me ask you: Did you think Trump was going to win?” Read more here.
Cryptocurrency ICOs (initial coin offerings, also called token launches) have now raised nearly 4x as much money as bitcoin companies raised in venture capital dollars so far this year. That’s according to PitchBook, which tallied up the latest numbers: ICOs have raised almost $1.3 billion in 2017 so far, while only about $358 million in traditional VC money went to blockchain startups over the same period.
This is all the more incredible when you consider that last quarter was the best quarter for blockchain and bitcoin VC funding on record, more than doubling the amount raised in the first quarter and up 89% year over year, according to CBInsights.
Now, a fundraising method that you likely had never heard of until a few months ago is on track this year to exceed all prior VC investment in blockchain, which has totaled a cumulative $1.7 billion over the past eight years, PitchBook says.
Just in case that didn’t convince you of how completely bananas ICOs have become, it’s hard to ignore when even people doing their own ICOs talk about how bananas it is.
For example, I attended a panel discussion hosted by BlockchainDriven Thursday night, where Morgan Hill, an investor at Attis Capital, announced that he was launching a new cryptocurrency hedge fund called AxionV in August. But unlike the crypto hedge fund startup I told you about on Wednesday, MetaStable, which received funding from Sequoia, Andreessen Horowitz, Founders Fund, Union Square Ventures and Bessemer Venture Partners, AxionV has a different plan. It will do an ICO itself, targeting a $30 million fund, which it will then use to invest in other ICOs, Hill said.
He also told a story of another hedge fund manager in London who was planning to launch an ICO of a company that aims to put the entire Quran online, and use the new cryptocurrency to compensate people who contribute to the digitization of the religious text. Hill’s take: “The first thing I thought was, this is categorically insane.” Read more.
BANKING ON CRYPTO
I lost my credit card a week ago. The restaurant where I had dinner never found it, which means it’s most likely still on the streets of Brooklyn somewhere. I have yet to cancel it. This wasn’t just blithe irresponsibility; I had just booked the last two seats on a flight to Sardinia and didn't want to risk the Italian airline cancelling the tickets if the card was disabled while the transaction was pending. (If you’ve ever dealt with customer service in Italy, you know what I mean.)
Luckily, absolutely nothing has happened; my card has not had a single charge. But as has become abundantly clear from all of your feedback in the last couple of days, this kind of lapse in security and custody of my account could have much more devastating consequences in the world of cryptocurrency. After all, a bitcoin wallet key cannot simply be cancelled and replaced if lost; if it got into the hands of someone else, that money is as good as gone.
If you were one of the many who sent me stories of your own security snafus, hacks and other ideas about how best to hold on to your cryptocurrency, thank you. If I haven’t responded to your email yet, I will—I’m still getting through my inbox. And if you have other thoughts on or experiences to share on these topic, or on banking in cryptocurrency in general, please get in touch: firstname.lastname@example.org or on Twitter @jenwieczner
(As usual with Term Sheet tips, we’ll only use your name with your permission.)
DATES TO WATCH
July 29—That’s tomorrow, when the Snap IPO lock up period expires on hundreds of millions of shares in Snapchat’s parent company. Investors have been selling all month in anticipation of this; Snap stock currently trades at about $14, a full $3 below its IPO price (and $11 below where this Uber driver bought his share). But it’s possible that some of the company’s biggest backers will sell part of their stakes the first chance they get, so keep an eye on Snap’s stock price when the market opens Monday.
July 31—When we find out if some of the mutual funds that own Uber marked down their holdings after CEO Travis Kalanick resigned last month. Funds like Fidelity file their monthly holdings disclosures for June next week.
Aug 1—When some mischievous Bitcoin miners are trying to split the blockchain through what’s known as a fork; if successful, a new version of the cryptocurrency will emerge, called Bitcoin Cash. The volatility in the market could be even more extreme than usual surrounding the fork date, as some exchanges are suspending trading and other transactions for that time as a precaution, and some investors are pulling their funds out in the meantime.
THE LATEST FROM FORTUNE...
• John McCain helps sink GOP’s Obamacare repeal
• Meg Whitman will not be Uber’s next CEO.
• Floyd Mayweather plans to invest in an ICO.
• This is the hottest job in tech right now.
• Jeff Bezos back to being the second-richest person in the world.
Xiaomi gets a $1B loan to grow its international footprint. Anthony Scaramucci’s uncensored rant. SpaceX’s plans to launch its Falcon Heavy in November. Richard Branson cedes control of Virgin Atlantic. Inside Uber’s divided boardroom.
• Columbia Pulp, a Dayton, Wash.-based manufacturer of pulp for papermaking, raised $36 million in funding. Columbia Ventures Corp led the round.
• Cyrus Biotechnology Inc, a Seattle-based biotechnology software firm, raised $8 million in Series A funding. Trinity Ventures led the round, and was joined by investors including OrbiMed Advisors, SpringRock Ventures, and W Fund.
• MultiMechanics, an Omaha-based developer of virtual testing software, raised $1.9 million in funding. Investors include Solvay Ventures, Anzu Partners and Invest Nebraska.
• Megacool, a San Francisco-based mobile game tech startup, raised $1.5 million in seed funding. Investors including Alliance Venture ed the round.
HEALTH AND LIFE SCIENCES DEALS
• PreciThera, a Canada-based precision medicine company, raised $29 million in Series A funding. Investors include Sanderling Ventures, Arix Bioscience, Fonds de solidarité FTQ, CTI Life Sciences and Emerillon Capital.
PRIVATE EQUITY DEALS
• Adidas agreed to sell its CCM ice hockey brand to Birch Hill Equity Partners for $110 million, according to Reuters. Read more.
• Baird Capital made an investment of an undisclosed amount in Prescient Healthcare Group, a product strategy consultancy to the global biopharmaceutical industry with offices in London and New York.
• TA Associates invested in Inspired, a U.K.-based school chain operator. Financial terms werent’t disclosed.
• Luminate Capital Partners invested in StarCompliance, a Rockville, Md.-based provider of enterprise compliance and regulatory software solutions for the financial services industry. Financial terms weren’t disclosed.
• ACG Materials acquired Diamond Gypsum, a Watonga, Okla.-based miner of gypsum products. Financial terms weren't disclosed.
• Brite Media Group, which is backed by The Beekman Group, acquired Clean Zone Marketing, a Noblesville, Ind.-based provider of transit advertising services. Financial terms weren’t disclosed.
• LongueVue Capital acquired Zavation Medical Products, a Jackson, Miss.-based maker of spinal implants, instruments and biologics. Financial terms weren’t disclosed.
• KKR & Co. and CVC Capital Partners are working on a joint offer for Akzo Nobel NV’s (ENXTAM:AKZA) specialty chemicals division, according to Bloomberg. Advent International Corp. and Apollo Global Management LLC are also considering bids for the division, which could be valued at more than 9 billion euros ($10.6 billion). Read more.
• Purple, an Alpine, Utah-based mattress startup will merge with Global Partner Acquisition Corp (Nasdaq:GPAC) in a deal that would value the company at $1.1 billion, according to TechCrunch. Read more.
• Expedia invested $350 million in Traveloka, an Indonesia-based online travel portal.
• Air France-KLM is taking a 31% stake worth £220 million ($289 million), in Virgin Atlantic, a U.K.-based commercial airline.
• Anaqua, Inc., a Boston-based provider of Intellectual Property management and analytics solutions, will merge with Lecorpio, a Santa Clara, Calif.-based developer of end-to-end IP management software. Financial terms weren’t disclosed.
• Redfin, a Seattle-based real estate brokerage company, raised $138 million in its IPO by offering 9.2 million shares at $15 (above its range of $12 to $14). Redfin will trade on the Nasdaq under the ticker symbol RDFN. Goldman Sachs, Allen & Company, BofA Merrill Lynch and RBC Capital Markets acted as lead managers on the deal. Backers include Madrona Ventures, Greylock Funds, Draper Fisher Jurvetson, Tiger Global, Vulcan Capital, and T. Rowe Price.
• RBB Bancorp, a Los Angeles-based commercial bank, raised $86.3 million in an IPO. The company priced 3.6 million units at $23 a share, and will trade on the Nasdaq under the ticker RBB. Sandler O'Neill, Keefe Bruyette & Woods, and Stephens Inc. were underwriters on the deal.
• Pensare Acquisition, a Atlanta-based blank check company focused on acquiring a wireless telecommunications company, raised $270 million in its IPO. The company priced 27 million shares at $10 share, and will trade on the Nasdaq under the ticker symbol WRLSU. EarlyBirdCapital acted as a lead manager on the deal.
• Dropbox, a San Francisco-based cloud-storage and file-sharing company, is in talks with Goldman Sachs (NYSE:GS) to prepare documents for an IPO that could take place as soon as this year, according to Bloomberg. Read more.
• One Equity Partners agreed to acquire Lutech S.p.A., an Italy-based engineering company, from Laserline. Financial terms weren’t disclosed.
• Hawk Capital Partners acquired LifeShield, a Langhorne, Penn.-based maker of home security systems, from DirecTV. Financial terms weren’t disclosed.
• Advent International agreed to acquire a majority stake in First Watch Restaurants, a University Park, Fla.-based daytime cafe operator. Financial terms weren’t disclosed.
• Sverica Capital Management and Housatonic Partners have agreed to sell OASIS (NYSE:OAS), to Montagu Private Equity. Financial terms weren’t disclosed.
• AltspaceVR, a Redwood City, Calif.-based social platform for virtual reality, is shutting down its main service after running out of cash. The company had raised more than $15 million in venture funding from investors including GV, Raine Ventures, Rothenberg Ventures, Formation 8, and Lux Capital.
• Oak Hill Capital Partners acquired EPIC Insurance Brokers & Consultants, a San Francisco-based insurance brokerage, from The Carlyle Group. EPIC has an enterprise value of $977 million.
• Party City Holdco Inc. (NYSE: PRTY) acquired a 60% stake in Print Appeal, Inc., a Dallas, Texas-based manufacturer and wholesaler of printed personalized products, for $2.8 million.
FIRMS + FUNDS
• Partners Group, a Switzerland-based private equity firm, raised 6 billion euros ($7 billion) for its latest direct private equity fund.
• Intermediate Capital Group, a London-based private equity firm, raised $1.1 billion for its second secondary fund, Strategic Secondaries II Fund.
• Fulcrum Equity Partners, an Atlanta-based private equity and venture capital firm, raised $203 million for its third fund, Fulcrum Growth Fund III.
• A new fund called Gigafund will raise up to $100 million in capital, according to an SEC filing. The listed partners at Gigafund are Luke Nosek and Stephen Oskoui.
• Northern Light Venture Capital, a Hong Kong-based venture capital firm, is seeking to raise $30 million for its fifth fund.