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NOW WHAT?

Good morning, Term Sheet readers.

Benchmark partner Bill Gurley was the investor who drove the effort to push out and sue Uber’s then-CEO Travis Kalanick. Recode’s Teddy Schleifer explores the question of whether there’s a next act for one of Silicon Valley’s top investors after a public, unprecedented fight that shook the tech community.

“What my firm and I went through in 2017 was probably the least enjoyable experience of my life,” Gurley said at a conference in February.

Schleifer’s piece noted that Benchmark’s dealmaking pace has slowed considerably in recent years, from 39 new deals in 2008 to just 7 in 2017. The rest of 2018 is still in flux for the firm as Benchmark prepares to raise its next fund, which will likely be about $425 million. The future of its six investing partners remains unclear.

Union Square Ventures’ Fred Wilson took the opportunity to comment on the article on his blog. He writes that his own firm’s activity has slowed in the last several years, noting that Benchmark is not the only one to do so.

So what gives?

Wilson offers two reasons — 1) a drop in early-stage investing / a premium on later-stage growth and 2) an increase in crypto investing.

In other words, seed stage is getting increasingly expensive, forcing early-stage funds to throw in the towel (see Arena Ventures & SV Angel). Meanwhile, funding for crypto-focused startups is exploding and the talent (both operators and investors) are moving in that direction.

As we’ve previously noted, there’s been a significant brain drain as top talent departs traditional venture in favor of crypto investing. Sequoia Capital partner Matt Huang is leaving the firm to start a cryptocurrency-focused fund with Coinbase co-founder Fred Ehrsam. Former Social Capital partner Arjun Sethi is raising a new fund with a likely focus on cryptocurrency and blockchain investments. Last year, Joel Monegro, a Union Square Ventures analyst, quit and started a fund called Placeholder. Runa Capital’s Nick Tomaino left and launched a crypto-focused firm called 1confirmation.

Wilson writes:

So times they are a changing in VC land right now. Which mirrors the broader tech sector which is maturing and consolidating while a next wave starts brewing. How to play this whole thing is challenging. The future of the VC business and its top firms are in flux and those who play it right stand to gain a lot and those who don’t stand to lose a lot. It is most definitely not a time for the status quo.

WOW DEAL: AT&T Inc will buy online advertisement exchange company AppNexus, for approximately $1.6 billion, according to media reports. AppNexus will become part of AT&T advertising & analytics, as the U.S. telecom company aims to expand its online advertising to better compete with Google and Facebook.

AppNexus has raised more than $320 million in venture funding from investors including Venrock, First Round Capital, News Corp, WPP Ventures, TCV, Microsoft, and Khosla Ventures.

THE LATEST FROM FORTUNE...

• Can This Startup Break Big Tech’s Hold on A.I.? (by Vauhini Vara)

• Why China Has An Edge In the A.I. Arms Race (by Clay Chandler)

• The 9 Companies Behind the A.I. Acquisition Boom (by Jonathan Vanian)

• Friday Is Your Last Day to be a Toys 'R' Us Kid (by Hallie Detrick)

VENTURE DEALS

• Tact.ai, a Redwood City, Calif.-based conversational AI sales platform, raised $27 million in Series C funding. Investors include Amazon Alexa Fund, Comcast Ventures, Salesforce Ventures, Accel Partners, M12 (formerly Microsoft Ventures), Redpoint Ventures and Upfront Ventures.

• Labstep, a London-based platform for researchers that captures real-time scientific data, raised 1 million pounds ($1.3 million) in funding. The investors were not named.

• Liongard, a Houston, Texas-based provider of unifying and maintaining system documentation for MSPs, raised $1.25 million in seed funding. Investors include Station Houston Ventures, Gestalt Cybersecurity, Houston Angel Network, TiE Houston and UH Cougar Venture Fund.

PRIVATE EQUITY DEALS

• Midwest Industrial Rubber, a portfolio company of Incline Equity Partners, acquired Van Con Inc, a Michigan-based distributor of conveyor belting for the food, paper, industrial and automotive industries. Financial terms weren't disclosed.

• General Electric is near a deal to sell its unit that makes large industrial engines to Advent International, according to The Wall Street Journal. The unit is valued at $3 billion. Read more.

• Steele Compliance Solutions Inc, a portfolio company of Bregal Sagemount, acquired TransparINT, a Little Falls, N.J.-based provider of an automated monitoring system for negative news. Financial terms weren’t disclosed.

• Terra Firm made an offer for IWG, a provider of flexible workplaces, according to The Financial Times. IWG is already considering proposals from Starwood and TDR. Read more.

• DCS Global, a Plano, Texas-based provider of revenue cycle management software, received an investment from Tritium Partners. Financial terms weren't disclosed.

IPOs

• Autolus, a London-based biopharmaceutical company focused on developing and commercializing T-cell therapies, raised about $150 million after pricing 8.8 million shares of its IPO at $17 per share. The stock began trading on the NASDAQ under the ticker symbol “AUTL.” Goldman Sachs and Jefferies LLCare the lead underwriters. Autolus’ pre-IPO backers include Arix Bioscience plc, Cormorant Asset Management, Nextech Invest, Syncona and Woodford Investment Management.

• Meituan Dianping, a China-based online food delivery-to-ticketing services platform, filed for an initial public offering in Hong Kong. It aims to raise over $4 billion, according to Reuters. Meituan Dianping’s backers include Tencent, Sequoia Capital, General Atlantic, DST Global, GIC Pte Ltd, and Temasek Holdings (Private) Ltd, and Canada Pension Plan Investment Board. Read more.

EXITS

• OpenGate Capital sold NorPaper Group, a France-based maker of white top testliner, to Gemayel Freres & Chaoui Industriel Group. Financial terms weren't disclosed.

• Twitter agreed to acquire Smyte, a San Francisco-based online security startup. Financial terms weren't disclosed. Smyte had raised approximately $6.3 million in venture funding from investors including Avalon Ventures, Baseline Ventures, Founder Collective, Harrison Metal, Upside Partnership and Y Combinator.

FIRMS + FUNDS

• Permira Holdings, a U.K.-based private equity firm, is in talks to raise as much as 10 billion euros ($12 billion) for its seventh buyout fund, according to Bloomberg. Read more.

• TowerBrook Capital Partners L.P, a New York-based investment management firm, raised an aggregate total of $5.3 billion for its private equity fund, TowerBrook V, and its structured investment platform, TowerBrook Structured Opportunities II.

• The Blackstone Group, a New York-based investment firm, will raise $5 billion for its debut infrastructure fund, according to Bloomberg. Read more.

• Cornell Capital, a New York and Hong Kong-based investment firm, raised $1.325 billion for its debut multi-asset private equity fund.