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Term Sheet — Monday, October 15

SWITCHING SIDES

Good morning, Term Sheet readers.

My colleague Shawn Tully confirmed that Coinbase veteran Adam White is joining the newly-launched cryptocurrency venture Bakkt as its chief operating officer.

White was part of the so-called “Coinbase Mafia” — he joined the startup as the fifth employee and helped build it up into a crypto-colossus with 25 million customers. For the last 18 months, White was the chief of its institutional products and regulatory arm.

“In 2017, I saw a big shift,” he told Fortune. “The interest in Bitcoin and other currencies started changing from retail to the institutional side. But the level of infrastructure of the existing trading sites often didn’t meet their expectations. That’s why they’re waiting on the sidelines.”

The big banks, he says, needed exchanges that provided the safety they required for trading equities, bonds or gold. “That’s why I joined Bakkt,” says White.

Bakkt has deep ties to Wall Street’s institutional investing titans and it’s pitching itself as the venture with an inside track at bringing Bitcoin mutual funds and ETFs to America’s 401(k)s.

Institutional money is crucial to the success of the crypto market, so it’s only natural that both Bakkt and Coinbase are gearing up to provide what Wall Street craves: Trading on federally regulated exchanges, as well as clearing, and custody of services for digital assets on par with the safeguards that now protect transactions for the major money managers.

Tully writes, “If Bakkt delivers and big Wall Street begin trade cryptocurrencies with the same ease, safety, and scale as stocks, bonds and traditional commodities, it could be a tremendous forward leap in the evolution of cryptocurrencies.”

You can read Fortune’s recent profile on Bakkt here & the September feature on Coinbase here.

THE SAUDI RIPPLE EFFECT: SoftBank’s share price dropped more than 7% Monday, and it is likely connected to the Jamal Khashoggi disappearance scandal. Analysts claim there are two reasons: the general pullback from tech, and SoftBank’s deep ties with the Saudis. The kingdom provided nearly half the money for SoftBank’s $93 billion tech-focused investment fund, which has backed U.S.-based companies like Uber, WeWork, and Slack.

It’s interesting to consider what this may mean for Masayoshi Son as so much of his fate lies in the hands of Saudi Crown Prince Mohammed bin Salman, who pledged $45 billion to his fund in 45 minutes. Just last week, bin Salman proudly announced that the country’s Public Investment Fund (PIF) plans to pour another $45 billion into SoftBank’s second Vision Fund.

As Bloomberg notes, “Not only are those commitments now in question, but SoftBank could face a revolt in Silicon Valley if entrepreneurs begin to think taking its cash is akin to blood money.”

Jeff Kingston, a professor at Temple University in Tokyo, told Bloomberg that “Son is going to find a chillier welcome in Silicon Valley. The whole ethos of these young venture capitalists is they want to make the world a better place. That’s hard to reconcile with the vision of darkness that Saudi Arabia is projecting.”

So does that mean the scandal could freeze Softbank out of future deals? Will it have an impact on future Vision funds? Will Son’s reputation take a hit?

For now, Softbank has declined to comment to various media outlets on the Saudi scandal, but I, along with all of Silicon Valley, will be keeping a close eye on Masa’s response and handling of the situation. It’s a critical moment for the prolific investor and the ambitious, do-good companies he has helped fund.

FORTUNE GLOBAL FORUM: Fortune’s Global Forum convenes today in Toronto, Canada. The Forum creates a valuable opportunity for the CEOs of the world’s biggest multinational companies—the Fortune Global 500—to actively engage with Canada and its leaders from both business and government. You can see the full agenda and watch the livestream here.

VENTURE DEALS

Kepler Communications, a Canada-based satellite telecommunications company, raised $16 million in Series A funding. Costanoa Ventures led the round, and was joined by investors including Deutsche Bahn’s (DB) Digital Ventures and IA Ventures.

Coord, a New York-based mobility data platform, raised $5 million in Series A funding. Alliance Ventures led the round.

Qwire, a New York-based creator of SaaS software to streamline royalty reporting and licensing for music-for-picture, raised more than $2 million in funding from. The investors were not named.

Yoho, a China-based streetwear platform, raised “tens of millions” of dollars in funding. C Ventures led the round.

HEALTH AND LIFE SCIENCES DEALS

Berkeley Lights, Inc, an Emeryville, Calif.-based company focused on digital cell biology, raised $95 million in funding. Nikon led the round, and was joined by investors including Walden-Riverwood Ventures, Sequoia Capital, Black Diamond Ventures, Paxion Capital, Cota Capital, KTB Network, Atinum Investment, Shangbay Capital, AJS BioTree Healthcare Fund, and Varian.

PRIVATE EQUITY DEALS

The Carlyle Group agreed to acquire Apollo Aviation Group, a global commercial aviation investment and servicing firm. Financial terms weren’t disclosed.

Spectrum Equity acquired a majority of AllTrails, a San Francisco-based provider of a digital guide to the outdoors. Financial terms weren’t disclosed.

EagleTree Capital acquired a majority stake in Gaylord Chemical Company, a Slidell, La.-based specialty chemical production company.

Serent Capital acquired Real Green, a software and marketing provider primarily serving the lawn care and landscaping industries. Financial terms weren’t disclosed.

WebMD Health Corp, which is owned by Internet Brands, acquired MediQuality, a Belgium-based provider of medical news and information for healthcare professionals in the Benelux market. Financial terms weren’t disclosed.

Trive Capital and Five Crowns Capital recapitalized Picture Head, a Los Angeles-based provider of critical post-production content editing, finishing and storage services for media studios. Financial terms weren’t disclosed.

Endless acquired American Golf, a European golf retailer. Financial terms weren’t disclosed.

OTHER DEALS

Sears Holdings Corp (Nasdaq: SHLD) filed for Chapter 11 bankruptcy on Monday with a plan to close 142 more stores. Read more at Fortune.

IPOs

Innovent Biologics, a China-based biotech firm, is looking to raise up to $422 million in its Hong Kong IPO, according to Reuters. Innovent, which is backed by Fidelity and Temasek, set an indicative price range of HK$12.5-HK$14.00 ($1.59-$1.79) per share for its initial public offering, giving the company a valuation of about $2 billion. Read more.

EXITS

KKR acquired Minnesota Rubber and Plastics, a Minneapolis-based developer of molded plastic and molded rubber components, from Norwest Equity Partners. Financial terms weren’t disclosed.

FIRMS + FUNDS

LFM Capital, a Nashville-based private equity firm, raised $184 million for its sophomore fund.

PEOPLE

Jérôme Brassart will join Perella Weinberg Partners as a managing director.

Bill Aliber and Brian Shin joined Providence Strategic Growth Capital Partners as managing directors.

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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.