Good morning, Term Sheet readers.
On Monday, we talked about how SoftBank’s Masayoshi Son is capitalizing on the “information revolution” with his monster investment fund. Those who rule data will rule the entire world,” he said. On Tuesday, MasterCard’s CEO Ajay Banga said at a conference in Saudi Arabia that “data is the new oil.” The theme continues nicely for the third day in a row after Social Capital’s launch of its new data-focused investment platform.
On Wednesday, the firm announced an operating system for early-stage investing called “capital-as-a-service.” Put simply, Social Capital will invest in startups without having to go through the process of a traditional pitch. (Which means fewer humans have to listen to pitches that start with: “Imagine a jacket, but for your legs.” Really.)
“No hoops, no $7 artisanal coffee chats, no designer pitch decks, no bias, no politics, no bullshit,” Ashley Carroll, the partner in charge of overseeing the project, explains in a Medium post.
Here’s how the self-serve platform works: Entrepreneurs fill out a questionnaire, submit relevant figures such as revenue and raw engagement data, and/or grant the firm access to its cloud services. Social Capital will then evaluate the company and write a check or pass and deliver feedback.
Social Capital evaluated nearly 3,000 companies during its private beta and committed to funding several dozen across 12 countries. An interesting byproduct of the data-oriented approach was that CEO demographics skewed 42% female and majority non-white. (For context, female founders received 2.19% of venture capital funding in 2016.) In an email to Term Sheet, Social Capital CEO Chamath Palihapitiya called the 42% data point “simply fucking awesome.”
It’s no surprise that the firm is taking this route. For years, Palihapitiya’s vision has been pretty clear — operational experience coupled with a focus on data. But as Social Capital begins to expand and veer toward being stage-agnostic, some people aren’t on board with the direction the firm is taking. Social Capital co-founder Mamoon Hamid abruptly departed in August to join Kleiner Perkins Caufield & Byers. The company’s third co-founder Ted Maidenberg won’t be making new investments or participating in any future funds, although he’s currently still supporting the portfolio.
In spite of the high-profile turnover, Palihapitiya seems to be hyper-focused on this data-driven approach and he reiterated his plan to make Social Capital a full-service capital partner to the businesses it invests in throughout their lifecycles. He added:
“CaaS is designed for entrepreneurs who are either over-served or under-served by today’s venture status quo. In that first bucket: founders who prefer a low-touch, highly efficient funding process, or don’t want to give up a large chunk of ownership in their company. In the latter: founders outside Silicon Valley and the US more generally who often don't have access to Silicon Valley-based firms, nor the networks necessary to get the right warm intro.”
NEW FUND ALERT: Term Sheet has learned that Edison Partners is raising a ninth fund with a target of $300 million. It plans to invest in 16 to 18 companies. Edison is a New Jersey-based growth equity firm focused on investing in fintech and enterprise in the Eastern U.S. The firm has approximately $1.2 billion under management and counts more than 200 companies in its portfolio, including Terminus Software and MoneyLion.
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• Amperity, a Seattle-based company using machine learning to create customer profiles for global brands, raised $28 million in Series B funding. Tiger Global Management LLC led the round, and was joined by investors including Madrona Venture Group.
• Amastan Technologies, a North Andover, Mass.-based producer of materials using microwave-plasma production systems, raised $13.85 million in Series B funding. Anzu Partners led the round, and was joined by investors including Material Impact, RKS Ventures, KLP Ventures and LaunchCapital.
• Homelyfe, a London-based insurance product purchase manager, raised approximately $2.8 million in seed funding. Talis Capital and Peterson Ventures led the round.
• Pollen Metrology, a France-based software startup, raised £2.4 million ($3.2 million) in funding. Investors include XAnge and KREAXI.
• MākuSafe, an Ankeny, Iowa-based maker of a wearable workplace safety device and software platform, raised $1.25 million in funding. The investors were not named.
• Synthego, a Redwood City, Calif.-based provider of genome engineering solutions, raised funding of an undisclosed amount, from Intel Capital.
PRIVATE EQUITY DEALS
• Thomas H. Lee Partners recapitalized HighTower, a Chicago-based registered investment adviser. THL committed to invested an additional $100 million in new equity.
• Safe Fleet, a portfolio company of The Sterling Group, acquired COBAN Technologies, a Houston-based body cameras and in-car video provider. Financial terms weren’t disclosed.
• NPM Capital made an investment of an undisclosed amount in Ultimaker, a Netherlands-based 3-D printer maker.
• Lutech, a portfolio company of One Equity Partners, acquired Sinergy SpA, a Milan-based IT infrastructure provider. Financial terms weren’t disclosed.
• EPIC Insurance Brokers & Consultants, a portfolio company of Oak Hill Capital Partners, will acquire Frenkel & Company, a New York-based insurance brokerage services provider. Financial terms weren't disclosed.
• Katena Products, a portfolio company of Audax Private Equity, acquired Rhein Medical, a Petersburg, Fla.-based ophthalmic surgical instruments provider. Financial terms weren’t disclosed.
• ADM Capital Europe LLP acquired a majority stake in Olivos Naturales, a Spain-based producer of extra virgin olive oil. Financial terms weren’t announced.
• Safe Fleet, a portfolio company of The Sterling Group, acquired COBAN Technologies Inc, a Houston, Texas-based provider of body cameras and in-car video solutions for law enforcement. Financial terms weren't disclosed.
• CoAdvantage Corp, a portfolio company of Morgan Stanley Private Equity, acquired Total HR Management, a California-based professional employer organization. Financial terms weren't disclosed.
• Skybox Security, a San Jose, Calif.-based cybersecurity management company, will raise $150 million in funding. CVC Capital Partners’ Growth Fund will invest $100 million, and Pantheon will invest $50 million.
• KKR acquired an approximate 12.64% stake in PT Nippon Indosari Corpindo Tbk, an Indonesia-based mass market bread company. Financial terms weren't disclosed.
• BP Midstream Partners, the U.K.-based petroleum company, said it raised $765 million in an IPO of 42.5 million shares at $18, below its previously stated price range of $19 to $21 a piece. In 2016, it booked revenue of $103 million and earnings of $45.9 million. Citi, Goldman Sachs, Morgan Stanley, Barclays, Credit Suisse, J.P. Morgan, and UBS are joint bookrunners in the deal. The company plans to list on NYSE as “BPMP.”
• Legacy Acquisition, a Cincinnati, Ohio-based blank check company seeking to acquire a consumer goods company, said it plans to raise $300 million in an IPO of 30 million units at $10 a piece. Edwin Rigaud, a former executive at Proctor and Gamble, is CEO of the company. Wells Fargo Securities, Cantor Fitzgerald, and Stifel are joint bookrunners in the deal. The company plans to list on the NYSE as “LGCU.”
• CM Seven Star Acquisition, a China-based SPAC, said it raised $180 million in an offering of 18 million shares at $10 a piece, an upsized offering. The firm is backed by China Minsheng Investment Group. EarlyBirdCapital is sole bookrunner in the deal and plans to list on the Nasdaq as “CMSSU.”
• National Vision Holdings, a Duluth, Ga.-based eye care provider, raised $348 million in an offering of 15.8 million shares at $22 a piece, above its previously stated range of $18 to $20 a piece. The company posted revenue of $1.2 billion on earnings of $14.8 million in 2016. KKR(77% pre-offering) and Berkshire Partners (18%) back the company. KKR, BofA Merrill Lynch, Goldman Sachs, Citi, Morgan Stanley, Jefferies, UBS Investment Bank, and Wells Fargo are underwriting the deal. The company plans to list on the Nasdaq as “EYE.”
FIRMS + FUNDS
• Pennybacker Capital, an Austin, Texas-based real estate private equity firm, raised more than $390 million for its fourth fund, according to an SEC filing. The fund’s target is $500 million.
• China Everbright Limited and Walden International are raising $500 million for a new fund with a focus on semiconductor and industrial information technology, according to Reuters. Read more.
• Kayne Partners, a Los Angeles, Calif.-based investment firm, raised $385 million for its fourth growth private equity fund, Kayne Partners Fund IV.
• ING raised €300 million ($354 million) for ING Ventures, a fund with a focus on fintech companies.
• GSR Ventures, a China-based venture capital firm, is seeking to raise $325 million for its sixth fund, according to an SEC filing.
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Polina Marinova produces Term Sheet, and Lucinda Shen compiles the IPO news. Send deal announcements to Polina here and IPO news to Lucinda here.