A CLASH OF VALUES
After staying awfully quiet, Softbank CEO Masayoshi Son finally made a move in the wake of the ongoing uproar over the disappearance of journalist Jamal Khashoggi. In a last-minute decision, Son decided to cancel his speaking role at Saudi Arabia’s Future Investment Initiative conference, though he may still attend, according to The Wall Street Journal.
Son’s last-minute withdrawal from his speaking engagement is a significant move that will likely result in an ego-driven power battle. For Softbank, it’s going to come down to a test of values given that much of Son’s fate and reputation lies in the hands of Saudi Crown Prince Mohammed bin Salman. 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 hard to reconcile Son’s grand, do-gooder vision with Saudi Arabia’s dark actions, so it puts the Japanese tech executive in a very awkward position. It’s possible that the scandal could freeze Softbank out of deals, affect future Vision funds, or even tarnish Son’s reputation.
This controversy will reveal where Son’s allegiances lie — to the man who gave him $45 billion in 45 minutes (and is willing to invest more) or to his own company that pledges to “increase people’s happiness.” The problem is that without the former, it’s unclear how he can get the capital to fund the latter.
‘RIGHTFULLY DISCIPLINED:’ Uber’s top dealmaker Cameron Poetzscher has resigned from the company less than a month following reports of prior sexual misconduct in the office. Poetzscher had been at the tech giant for nearly five years, and the incidents took place before CEO Dara Khosrowshahi took control of Uber in August 2017. In a statement to Fortune, Uber thanked Poetzscher for his service and said that Nelson Chai will be taking over his duties while the company searches for a new lead.
In a statement to the WSJ for a September article, Poetzscher said he was “rightfully disciplined” by Uber. “I deeply regret and have learned from this error in judgment, and I am proud of how hard everyone at Uber is working to ensure our company is a positive, respectful, and inspiring place to work,” he said at the time. Read more.
OPPORTUNITY ZONE REGULATION: We discussed Opportunity Zones in yesterday’s Term Sheet and noted that there are still some regulatory unknowns that investors are waiting on from the federal government.
Hypothesis Ventures, one of the earliest venture funds focused on investing in Opportunity Zones, sent me an email to give an update regarding some of the regulatory implications for venture investors. Here they are:
• Only capital gains are eligible for investment into Opportunity Zone (“OZ”) Funds, which previously wasn’t clarified.
• Qualified Opportunity Zone (“QOZ”) Funds will not be able to exclude new capital from upcoming asset tests.
• Opportunity Zone funds may sell investments and reinvest gains in new ones but further guidance is required.
• Taxpayers have until 2047, 20 years past the qualified Opportunity Zones designations expiration date, to make their basis step up election.
THE LATEST FROM FORTUNE...
• Someone Put a Bomb in George Soros's Mailbox, and the FBI Is Now on the Case (by David Meyer)
• Meet the First Major Blockchain-Powered Smartphone on the Market (by Carson Kessler)
• Oculus Co-Founder and CEO Brendan Iribe Is Leaving Facebook (by Jonathan Vanian)
• The Unexplored Gold in Apple's Advertising Opportunities (by Adam Lashinsky)
Netflix to raise about $2 billion in debt to fund original shows. Twitter bans more InfoWars accounts. Wells Fargo fined $65M for sales practices that cost investors millions. China is tightening its grip on blockchain companies. Apple CEO to warn that Big Tech must keep users’ trust.
• GoEuro, a Germany-based booking platform for transport across Europe, raised $150 million in funding. Kinnevik AB and Temasek co-led the round, and were joined by investors including Hillhouse Capital.
• Assent Compliance, a Canada-based company focused on supply chain data management software, raised more than $100 million (CAD$130 million). Investors include Warburg Pincus.
• Filld, a Palo Alto, Calif.-based last mile mobile fueling company, raised $15 million in Series B funding. Parkland Fuel Corporation and Calibrate Ventures co-led the round, and were joined by investors including Cendana Capital, Lucas Venture Group, Javelin Venture Partners and Hallador Investment Advisors.
• Domio, a New York-based travel technology platform, raised $12 million in Series A funding. Tribeca Venture Partners led the round, and was joined by investors including SoftBank Capital NY and Loric Ventures.
• Finn AI, a Canada-based developer natural language understanding software for the banking industry, raised $11 million in Series A funding. Yaletown Partners and Flying Fish Partners co-led the round, and were joined by investors including BDC Capital's Women in Technology Fund and 1843 Capital.
• WiredScore, a New York-based company developing a global rating scheme for digital connectivity in commercial real estate buildings, raised $9 million in Series A funding. Investors include Bessemer Venture Partners, Fifth Wall, Sterling.VC and leading global commercial real estate investors including Legal & General, KingSett Capital, U+I, Town Centre Securities, MOMENI Digital Ventures, and Savitt Partners.
• Wallarm, a South San Francisco-based provider of AI-powered application security, raised $8 million in Series A funding. Toba Capital led the round, and was joined by investors including Y Combinator, Partech and Gagarin Capital.
• Resolution Games, a Sweden-based virtual reality and augmented reality games company, raised $7.5 million in Series B funding. MizMaa Ventures led the round, and was joined by investors including GP Bullhound, Fly Forever, GV, Partech, Bonnier Ventures, Creandum and Sisu Game Ventures.
• Ethic, a tech-driven asset management platform that powers solutions for wealth advisors and institutional investors, raised $6.8 million in funding. Investors include ThirdStream Partners, Nyca Partners, Kapor Capital and the Urban Innovation Fund.
• Synthetic Minds, a San Francisco-based company building infrastructure for safe blockchain smart contracts, raised $5.5 million in seed funding. Investors include Khosla Ventures and Pantera Capital.
• Raremark, a London-based patient-data platform in rare disease, raised 3 million pounds ($3.9 million) in funding. AlbionVC and Ananda Ventures led the round, and were joined by investors including Oltre Venture and the Cass Entrepreneurship Fund.
HEALTH AND LIFE SCIENCES DEALS
• Synthego, a Redwood City, Calif.-based genome engineering innovation company, raised $110 million in Series C funding. Founders Fund led the round, and was joined by investors including 8VC and Menlo Ventures.
• Qpex Biopharma, a San Diego, Calif.-based developer of antibiotics, has raised $33 million in Series A financing. New Enterprise Associates led the round with participation from Adams Street Partners, LYZZ Capital, Hatteras Venture Partners and Stanford University Draper Fund.
PRIVATE EQUITY DEALS
• Authority Brands, which is backed by Apax Partners, acquired America’s Swimming Pool Company, a Macon, Ga.-based swimming pool service franchise. Financial terms weren't disclosed.
• Mobile Communications America, a portfolio company of WJ Partners, acquired Sharp Communication & Security Solutions, a Huntsville, Ala.-based provider of two-way communications and advanced video surveillance solutions. Financial terms weren't disclosed.
• Weller Equity Partners recapitalized Mirac, a Lynchburg, Ohio-based electronics assembly and fabrication company. Financial terms weren't disclosed.
• PLI Card Marketing Solutions, a portfolio company of Platinum Equity, acquired Harvard Card Systems, a California-based maker of plastic card products. Financial terms weren't disclosed.
• EyeSouth Partners, which is backed by Shore Capital Partners, made an investment in Cobb Eye Center, an eye care provider with clinics located in Marietta and Dallas, Georgia. Financial terms weren't disclosed.
• Clarion Capital Partners made an investment in Premiere Digital Services, a Los Angeles and India-based digital media services and software firm. Financial terms weren't disclosed.
• Veronis Suhler Stevenson acquired a minority stake in GreenSlate, a New York-based cloud-based accounting and payroll software platform for the entertainment industry. Financial terms weren't disclosed.
• Qualtrics International, a Provo, Utah.-based customer and employee experience software maker, filed for a $200 million IPO. It posted revenue of $289.9 million in 2017 and income of $2.6 million. Accel, Insight Venture Partners, and Sequoia Capital back the firm. Morgan Stanley and Goldman Sachs are underwriters. It plans to list on the Nasdaq as “XM.” Read more.
• Axonics Modulation Technologies, an Irvine, Calif.-based maker of neural implants for overactive bladder, plans to raise $100 million in an IPO of 6.7 million shares priced between $14 to $16. It posted revenue of $128,000 in 2017 and loss of $18.1 million. Andrea Partners (14.4%), Longitude Venture Partners (12.9%), and Coöperatieve Gilde Healthcare (12%) backs the firm. BofA Merrill Lynch and Morgan Stanley are underwriters. It plans to list on the Nasdaq as “AXNX.” Read more.
• Caliburn International, a Reston, Va.-based provider to the U.S. federal government filed for a $100 million IPO. It posted revenue of $785.8 million and loss of $10.9 million in 2017. Jefferies, BofA Merrill Lynch, and SunTrust Robinson Humphrey are underwriters. It plans to list on the NYSE as “CLBR.” Read more.
• Centrexion Therapeutics, a Boston-based maker of therapies to moderate to severe chronic pain, filed for an $86 million IPO. It has yet to post a revenue. New Enterprise Associates backs the firm. BofA Merrill Lynch, Leerink Partners and Evercore ISI are underwriters. It plans to list on the Nasdaq as “CNTX.” Read more.
• Vapotherm, an Exeter, N.H.-based maker of noninvasive breathing aids to treat respiratory distress, filed for a $58 million IPO. It posted revenue of $35.5 million and loss of $31 million in 2017. SightLine Partners and Glide Healthcare Partners back the firm. BofA Merrill Lynch and William Blair are underwriters. It plans to list on the NYSE as “VAPO.” Read more.
• StoneCo, the Brazilian card processor, has gained a $100 million commitment from Ant Financial. Berkshire Hathaway has also shown interest, Reuters reports citing sources. Read more.
• NCR Corp agreed to buy JetPay (Nasdaq:JTPY), an Allentown, Penn.-based provider of debit and credit card processing, for $184 million.
• Oracle agreed to acquire DataFox, a San Francisco-based company intelligence provider. Financial terms weren't disclosed. DataFox had raised approximately $14 million in venture funding from investors including Goldman Sachs, Green Visor, and GV.
• ARX Equity Partners sold its stake in Fincentrum, a Czech Republic-based financial adviser, to the Swiss Life Group. Financial terms weren't disclosed.
• Stellex Capital Management acquired Custom Glass Solutions, a Worthington, Ohio-based manufacturer of large-format laminated, tempered, value-added glass products. The seller was Guardian Glass LLC, a subsidiary of Koch Industries Inc. Financial terms weren't disclosed.
• Atar Capital acquired Pathways Health and Community Support, a Long Beach, Calif.-based provider of mental health care services, from Molina Healthcare Inc. Financial terms weren't disclosed.
• Clearlake Capital Group LP agreed to buy symplr, a Houston, Texas-based provider of management, credential management, and payer enrollment services, from Pamlico Capital and The CapStreet Group. Financial terms weren't disclosed.
FIRMS + FUNDS
• Thrive Capital, a New York-based private equity and venture capital firm, raised $1 billion for its fund, Thrive VI.
• Horizon Capital, a London-based private equity firm raised 200 million pounds ($260 million) for its debut fund.