A TOKENIZED WORLD
Good morning, Term Sheet readers.
Fortune’s Robert Hackett just confirmed that Circle, a cryptocurrency-focused financial services firm, bought Poloniex, one of the world’s most active cryptocurrency exchanges for ~$400 million. This matters for several reasons:
• The acquisition instantly makes Circle a rising threat to Coinbase's GDAX, which is currently the biggest cryptocurrency exchange in the United States.
• Goldman Sachs is getting more exposure to the crypto industry through its investment in Circle.
• If you added Poloniex to the balance sheet, Circle’s revenues would leap to approximately $250 million over the past three months. That’s a billion-dollar annual run rate.
• Circle was valued at $480 million during its last fundraise in June 2016. It’s likely that it has joined the coveted unicorn club now.
Bottom line is that this news brings more legitimacy to the cryptocurrency world. Circle hopes to leverage the technology behind Bitcoin to become the bank of the next century. In other words, it has the potential to completely re-shape the financial industry. From Hackett’s feature:
Over the next five to 10 years, they say, all sorts of traditional securities will become “tokenized”—divvied up into virtual stakes recorded on blockchains, the shared ledgers that power cryptocurrencies. People will own and trade small digital slices of everything from real estate, to cars, to houses, to patents, to stocks, to artwork—many of which may programmatically pay out dividends via software-defined “smart” contracts. Advocates say this tokenized future will make new asset classes accessible to smaller investors and lower the costs of transacting and investing, across borders as well as within them.
“Often the question we get is, ‘Is this all a speculative bubble? Is there going to be a big shakeout? Or will there be real institutional money from established players coming into this?’” Neville says. His view: It’s not an “either, or,” proposition. Both premises can be true.
...IN OTHER NEWS:
• The Weinstein Co. has filed for bankruptcy after talks to sell it collapsed. This development will likely add a major twist to the ongoing lawsuits against the company, many of which relate to the alleged sexual misconduct of Harvey Weinstein. The company will probably have to be removed as a co-defendant in the lawsuits where it is named, meaning that those currently suing may never see a payout from the production house (in general, bankruptcies effectively end lawsuits against firms going bust). But since Weinstein Co.’s co-defendants include Harvey Weinstein, his brother and their former production company Miramax, there is still a chance plaintiffs see a payout. Read more at Fortune.
• General Mills will buy Blue Buffalo Pet Products Inc, a maker of natural dog and cat food, for approximately $8 billion. The deal comes as global food giants are snapping up makers of natural and organic products, which are outpacing mainstream brands in growth. Read more.
• Over the weekend, investing behemoth Blackstone Group asked outside fund managers to detail their ownership in companies that make or sell guns, according to The Wall Street Journal. “We believe we have next to no direct exposure to the firearms industry, but it’s not surprising that we would want to confirm,” a spokeswoman for the firm said. This is interesting as more and more private equity firms have increased their scrutiny of public & private companies they invest in or might invest in to decrease their exposure to areas that could bring controversy.
THE LATEST FROM FORTUNE...
• Private Equity Giants Buy Cybersecurity Firm for $400 Million (by Robert Hackett)
• The Birth of Lagunitas Brewing Co. (by Dinah Eng)
• GE’s Terrible Year Just Got Worse (by Hallie Detrick)
• Nearly Half of 2017’s Cryptocurrency 'ICO' Projects Have Already Died (by David Z. Morris)
• Split, a Redwood City, Calif.-based feature experimentation platform, raised $17 million in Series B funding. LightSpeed Venture Partners led the round, and was joined by investors including Accel Partners and Harmony Partners.
• ParkBee, a Netherlands-based smart parking solutions provider, raised 5 million euros ($6.2 million) in funding. Statkraft Ventures led the round.
• Food by Rail Logistics Holdings Inc, a logistics and transportation company for frozen and refrigerated protein, produce, packaged food and beverages, raised $5 million in funding. The investors were not named.
• Amino Payments, a Philadelphia-based transparency and payments company for digital advertising, raised $4.5 million in seed funding. First Round Capital led the round, and was joined by investors including You & Mr. Jones Brandtech Ventures, NYCA Investment Fund, Tessera Venture Partners, Auren Hoffman and Tod Sacerdoti.
• ZEDEDA, a Santa Clara, Calif.-based provider of a real-time enterprise platform, raised $3.06 million in seed funding. Investors include Wild West Capitaland Almaz Capital.
• Doodhwala, an India-based delivery platform, raised $2.2 million in seed funding. Investors include Omnivore.
• OpenAirlines, a France-based company that offers solutions on optimizing flight operations and reducing costs, raised 1 million euros ($1.2 million) in funding. The investors were Alter Equity3P and Bpifrance.
HEALTH AND LIFE SCIENCES DEALS
• PROCEPT BioRobotics, a Redwood Shores, Calif.-based clinical stage medical device company, raised $118 million in funding. Investors include Viking Global Investors, Perceptive Advisors, and CPMG.
PRIVATE EQUITY DEALS
• Red Arts Capital acquired Central Arizona Freight, a Phoenix, Ariz.-based provider of specialty transportation services. Financial terms weren't disclosed.
• HGGC LLC agreed to acquire a controlling stake in HelpSystems, an Eden Prairie, Minn.-based provider of IT infrastructure software. The deal values the company at more than $1.2 billion, including debt, according to Reuters. Read more.
• Marlin Equity Partners acquired AddStructure, a Chicago, Ill.-based provider of search and discovery applications for e-commerce companies. Financial terms weren't disclosed.
• KPS Capital Partners, LP agreed to sell American & Efird, a Mt. Holly, N.C.- manufacturer of threads and yarns for apparel, to Platinum Equity Capital Partners. Financial terms weren't disclosed.
• GTT Communications, Inc. (NYSE: GTT) agreed to acquire Interoute, a London-based operator of independent fiber networks and cloud networking platforms, for approximately €1.9 billion ($2.3 billion) in cash.
• Eden acquired OrgOrg, a San Francisco-based social network for office managers to recommend, discuss, and review vendors and products, according to TechCrunch Financial terms weren't disclosed. Read more.
• Dropbox, a San Francisco, Calif-based cloud storage company, filed to raise up to $500 million in an IPO. The firm posted revenue of $1.1 billion in 2017 and loss of $111.7 million in 2017. Sequoia Capital (24.8% pre-IPO), Accel (5.3%), and T. Rowe Price (2.2%) back the firm. Goldman Sachs, J.P. Morgan, Deutsche Bank, Allen & Company, and BofA Merrill Lynch are joint bookrunners in the deal. Dropbox plans to list on the Nasdaq as “DBX.” Read more.
• Sunlands Online Education Group, a Beijing, China-based provider of online education firm, filed for an IPO of up to $300 million. The firm posted revenue of $61.8 million in 2016 and loss of $37.4 million. Goldman Sachs, J.P. Morgan, and Credit Suisse are joint bookrunners in the deal. The firm It plans to list on the NYSE as “STG.” Read more.
• Terrapin 4 Acquisition, a Coral Gables, Fla.-based SPAC formed to acquire, filed to raise up to $300 million in an IPO. The company plans to offer 30 million units priced at $10 a piece. Terrapin Partners and Nomura Securities back the firm. Nomura Securities is the sole bookrunner on the deal. Terrapin 4 Acquisition plans to list on the Nasdaq as “TRTLU.” Read more.
• Crescent Funding, a Los Angeles, Calif-based blank check company formed to acquire a financial services firm, postponed its $250 million IPO. The firm planned to offer 25 million units at $10 a piece. Crescent Capital backs the company. UBS Investment Bank, BofA Merrill Lynch and Stifel were joint bookrunners in the deal. The firm planned to list on the Nasdaq as “CFUNU.” Read more.
• IBEX Holdings, a Hamilton, Bermuda-based customer service company, filed for an IPO of up to $75 million. In the year ending June, the firm posted revenue of $334 million and loss of $9 million. TRG Pakistan Limited backs the firm. Baird, Piper Jaffray, William Blair and SunTrust Robinson Humphrey are underwriters in the deal. The firm plans to list on the Nasdaq as “IBEX.” Read more.
• Wellbilt Inc agreed to buy Avaj International Holding AB for about 1.8 billion Swedish Krona ($224 million). Priveq Investment Fund IV LP and SEB Venture Capital are the sellers.
• Foresight Group sold its stake in ICA Digital, a U.K.-based managed print services business. The buyer was ASL Group, a portfolio company of Mobeus Equity Partners. Financial terms weren't disclosed.
• Nokia acquired Unium, a Seattle-based mesh WiFi startup that works with Google Fiber. Financial terms weren't disclosed. Unium had raised approximately $26.7 million in venture funding from investors including Swiftsure Capital.
FIRMS + FUNDS
• SkyDeck, UC Berkeley’s startup accelerator, raised $24 million for its new fund. Investors included Sequoia Capital and Mayfair Venture Capital.
• Z Capital promoted Matthew Kane, Neal Nath and Pascale Thomas to managing director and Ian Delehanty to director. It also appointed Conor O’Grady to managing director and head of private equity reporting.
• Cairngorm Capital promoted Alex Bayliss and John Naylor-Leyland to managing director.
• Woodside Capital Partners promoted Adam Tilow to director.