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BLIND EYE TO SIDE EYE

Hello. How about that slow news day yesterday?

BYE, FOUNDER FRIENDLY: Benchmark has sued former CEO Travis Kalanick for fraud, breach of contract and breach of fiduciary duty. At issue is a maneuver made in June 2016, when Kalanick gave himself the absolute right to appoint three open board seats. Benchmark and the rest of the Uber board approved the matter. Times were good back then! Or they seemed good!

The lawsuit argues that if Benchmark had known about Kalanick’s “gross mismanagement and other misconduct” it wouldn’t have given him that power. That mismanagement specifically includes the Waymo trade secret situation, the India rape victim medical record situation, and Uber’s general culture of harassment and discrimination.

Benchmark also argues that Kalanick knew that if Benchmark had known about these situations, it wouldn’t have given him the board control.

The lawsuit alleges confirmation of reports of Kalanick’s plan to “Steve Jobs” it: “It is apparent that Kalanick has attempted to acquire the power to pack the Board to facilitate his desired re-appointment as Uber’s CEO.” (Kalanick denies the allegations.)

When Kalanick resigned as CEO, he agreed to fill the vacant board seats with people who were “independent, experienced, unbiased, and diverse.” Instead he re-appointed himself to one seat, and is refusing to “execute a further amended Voting Agreement” which makes this explicit. Benchmark wants Kalanick off the board entirely:

If Kalanick is allowed to continue occupying his fraudulently procured Board seat… Uber will suffer irreparable harm and needlessly face considerable reputational, regulatory and other risks.

Notable detail: Benchmark owns 13% of Uber, and 20% of the voting power. Kalanick owns 10% of the stock and 16% of the voting power.

My questions:

• Will suing a portfolio company CEO damage Benchmark’s reputation among entrepreneurs or will people understand that Uber and its foibles are an extremely unique situation?

• Even if Uber’s investors didn’t know the gory details of the medical record heist or the Otto/Waymo trade secrets, they certainly had an idea of the company’s toxic culture. Benchmark investor Bill Gurley was one of Kalanick’s closest advisors for years. As someone on Twitter joked, Benchmark has quickly gone from turning a blind eye to the side eye. Will Kalanick fight back by providing proof of Benchmark knowing about and allowing his bad behavior?

• Why aren’t the other investors that pushed Kalanick out (First Round Capital, Lowercase Capital, Menlo Ventures, Fidelity) involved in the lawsuit?

More on this in Monday’s column.

HOT MIC: Yesterday Snap missed analyst expectations on its second quarter as a public company. CEO Evan Spiegel’s reassurance to investors that he and his co-founder won’t sell any shares this year didn’t do much to allay their concerns. (Shares are down almost 13% this morning.) At one point, an analyst burst out laughing and explained “I didn't even understand his response," while his line was still live to the entire call, which doesn’t show a ton of faith from the analyst community either. (Listen here.)

UNICORN WATCH: Bitcoin has its first unicorn. Digital wallet service Coinbase raised $100 million from IVP at a post-money valuation of $1.6 billion. (More below). My colleague Bob Hackett reports:

This has been a banner year for Coinbase. According to the company, it has facilitated the exchange of more than $25 billion in digital currency to date, five times more than the total sum it processed from its founding through the end of last year.

On Wednesday, Fidelity Investments, the asset manager, added the ability for customers to view the cryptocurrency holdings in their Coinbase accounts on its own website.

During the recent Bitcoin blockchain fork in which a faction of the network broke off and created a new currency, Bitcoin Cash, some customers blasted Coinbase for saying it did not intend immediately to support the new money. Eventually, Coinbase reversed course and agreed to allow users to access their potential Bitcoin Cash holdings at the start of next year.

Coinbase has also been battling an IRS inquiry in recent months that seeks information about cryptocurrency buyers and sellers for tax purposes. The agency most recently said it would exempt people from the probe who transacted less than $20,000 in digital currency.

These hiccups haven't slowed the company's pace. Coinbase said it would put the newly raised money toward bolstering its engineering and customer support teams, opening a New York office for its professional trading operations, and continuing to develop Toshi, an Ethereum-based messaging and wallet app that it debuted last year. Read more.

SIDE QUESTION: Earlier this week AngelList founder Naval Ravikant tweeted that the big tech companies – Amazon, Google, Facebook and Apple – have all poured money into building things like cars, phones and virtual reality headsets “to hedge platform risk.”

blockchain believer, Ravikant pointed out that these companies have had “no reaction as entire Internet platform shifts to blockchain based.” He’s right that the consumer-facing giants are constantly paranoid that a new platform could become dominant. If that happens, they can’t afford to not be a player. Further, they haven’t made much noise about cryptocurrencies. (Technically Amazon does offer third party blockchain products in its AWS marketplace).

The enterprise leaders – Cisco, Microsoft, IBM and Intel – have been much more active. But even they haven’t been as eager to invest, experiment and build as the financial sector. I’d be curious to hear from readers: Why do you think Amazon, Google, Facebook and Apple haven’t been interested in cryptocurrency? (Or if you know of any secret projects…)

Have a great weekend!

THE LATEST FROM FORTUNE...

• Amazon’s ambitions for food go well beyond Whole Foods.

• The President declares the opioid epidemic a national crisis.

• The sun setting on Soundcloud.

• Is Nvidia too dependent on Bitcoin?

• Kalanick as his own worst enemy. Now he has a new worst enemy.

…AND ELSEWHERE

Microdosing in Silicon Valley. Big tech M&A is on track to decline for the fourth year in a row. Vinod Khosla must open Martin’s beach to the public. SoftBank’s extra risk. The culture wars in Silicon Valley.

VENTURE DEALS

• Toutiao, A China-based news aggregator, is raising at least $2 billion at a valuation of over $20 billion, according to Reuters. Read more.

• Coinbase, a San Francisco-based digital currency exchange, raised a $100 million in Series D funding. IVP led the round, and was joined by investors including Spark Capital, Greylock Partners, Battery Ventures, Section 32 and Draper Associates.

• AMP Americas, a Chicago-based clean energy company, raised $47 million in funding from EIV Capital.

• Vyze, an Austin, Texas-based financial technology solutions platform, raised $13.1 million in Series C funding. Austin Ventures led the round, and was joined by investors including Fathom Capital and Starvest Partners.

• FlySpaces, a Philippines-based marketplace for short-term office and retail space rentals, raised $2.1 million in pre-Series A funding, according to TechCrunch. The investors were not named. Read more.

• Tetra, a voice transcription startup, raised $1.5 million in seed funding, according to TechCrunch. Amplify Partners led the round. Read more.

PRIVATE EQUITY DEALS

• SK Capital agreed to acquire Perrigo API, the active pharmaceutical ingredients business of Perrigo Company plc (NYSE:PRGO). Financial terms weren’t disclosed.

• The Global ID Group, a Paine Schwartz Partners portfolio company, acquired Analitus Análises Biotecnológicas, a Brazil-based food safety testing laboratory. Financial terms of the transaction weren't disclosed.

OTHER DEALS

• Husky Injection Molding Systems, a Canada-based supplier of injection molding equipment to the global plastics industry, is exploring a sale of the company that could value it at close to $4 billion, including debt, according to Reuters. Read more.

• MCI acquired Wyndham Jade, a Dallas, Texas-based event and travel management company. Financial terms weren’t disclosed.

IPOS

• Preferred Sands, a sand-based proppant maker in Radnor, Penn., filed for an IPO of up to $100 million Thursday. The company backed by KKR posted sales of $171.8 million with a loss of $287.3 million in 2016. Credit Suisse, KKR Capital Markets, and Morgan Stanley are underwriters in the IPO. Preferred plans to list on the NYSE as “PSND.” Terms of the deal have not yet been disclosed.

• Ranger Energy Services, a Houston, Texas-based rig and well operator, raised $85 million in an offering of 5.86 million shares at $14.50 a piece, below the company’s previously stated range. The company posted revenue of $52.8 billion in 2016 on net loss of $5 million. Credit Suisse, Simmons and Co., Barclays, Evercore ISI, and Wells Fargo are lead underwriters in the deal. The company plans to list on the NYSE as “RNGR.”

• YogaWorks, the Culver City, Calif-based yoga studio chain raised $44 million in an offering of 7.3 million shares at $5.50 a piece—at the low end of its range. In 2016, the company booked losses of $9.5 million on revenue of $55.1 million. The company, which filed confidentially mid-April, has 50 studios, and about 3 million student visits in 2016. Cowen, Stephens, and Guggenheim are lead underwriters in the deal. Great Hill Partners backs the company, which plans to list as “YOGA” on the Nasdaq.

EXITS

• Milestone Partners sold Precision Partners Holding Company, a Canada-based supplier of precision machined metal parts, to AK Steel for $360 million.

• WeWork acquired Unomy, an Israel-based competitive intelligence platform for businesses, according to TechCrunch. Financial terms weren’t disclosed. Unomy had raised more than $2 million in venture funding from investors including AltalR Capital, Janvest Capital Partners, LETA Capital, and ValueShine Ventures. Read more.

• Frontenac acquired Industrial Color Brands, a New York-based creative production and software company, from Stone Canyon Industries. Financial terms weren’t disclosed.

• Caltius Equity Partners sold its stake in DHR Services Holdings, a Phoenix, Ariz.-bases human resource services provider, to Oasis Outsourcing. Financial terms weren’t disclosed.

FIRMS + FUNDS

• Three partners from Black Coral Capital, a Boston-based venture firm, are raising up to $400 million for an inaugural fund as partners of a new firm, Spring Lane Capital, according to an SEC filing. Rob Day, Christian Zabbal and Nikhil Garg are listed as partners in Spring Lane Capital.

• HighBar Partners, a Menlo Park, Calif.-based venture capital and private equity firm, raised $208 million for its third fund, HighBar Partners III, L.P.