A CRYPTO COLLAPSE
Good morning, Term Sheet readers.
The crypto bloodbath continues. Crypto prices are in free fall, and Bitcoin fell below $5,000 for the first time in 13 months. Although it’s not entirely clear what triggered the most recent sell-off, my colleague Jeff John Roberts explains that it could have something to do with the U.S. Securities and Exchange Commission bringing the hammer down on initial coin offerings.
The SEC took action against two cryptocurrency startups that staged ICOs. The companies, Airfox and Paragon Coin, agreed to pay civil penalties for running token sales last year without registering them as securities offerings. But Roberts cites a number of other factors — including Bitcoin’s cash fork and chip-makers Nvidia and Advanced Micro Devices reporting steep sales declines for cryptocurrency equipment. The collapse could be a result of the combination of all three but it could also be none of the above.
I’m not sure why anyone is surprised — volatility is par for the course. This reminds me of Floodgate partner Mike Maples’ July post on crypto investing. He first outlines the differences between fast money & slow money investing:
"Fast Money" investors treat the market like it is a voting machine, a pulse of the current times. They try to out-predict it in the short term. They believe they know something material before others. They are quickly rewarded when everyone catches up and overreacts to new information. Liquidity is paramount to fast money investors because they need to get into and out of a stock or asset quickly.
"Slow Money" investors treat the market like it is a weighing machine. They try to make money by owning a part of a great business that will appreciate faster than the broader market over a very long time. Liquidity matters less to such investors because they might hold for decades.
It's like the Tortoise and the Hare. Fast Money gets the positive attention and headlines in the beginning, but being patient and right drives the biggest outcomes.
Mark my words: Slow Money founders, builders, and investors will be the biggest winners in crypto. Some will say "it's different this time," either because crypto networks are not centrally owned or because of the community aspects of how crypto networks get built and governed. But when the dust settles, my bet is that the people who create value in a focused way for the longest time will rise above the rest.
I highly doubt the day-to-day price fluctuations mean the whole thing is a bust, but regardless of what happens, one thing is for sure — Bitcoin’s wild ride is far from over.
THIS JUST IN: Bidding has begun for the 22 regional sports TV networks from Disney, which acquired them from 21st Century Fox. Amazon (!), along with Blackstone and a sovereign wealth fund are joining the Yankees to buy back the YES Network, according to a CNBC report. According to some estimates, YES is worth more than $4 billion, which is likely why the team needed several partners to finance the deal.
• Dia&Co, a New York-based plus-sized retail startup, raised $40 million in Series C funding. Union Square Ventures led the round, and was joined by investors including Sequoia Capital.
• Harborside, a California-based vertically integrated cannabis company, raised $25 million in Series B funding. Investors include Salveo Capital, Navy Capital and Tidal Royalty.
• Stilla Technologies, a France-based provider of digital PCR solutions for high precision genetic analysis, raised 16 million euros ($18.3 million) in Series A funding. Illumina Ventures led the round, and was joined by investors including Kurma Partners, LBO France, BNP Paribas Développement, Paris Saclay Seeds and Idinvest Partners.
• Zero Financial, Inc, a San Francisco-based fintech company, raised $16 million in funding. Investors include Eniac Ventures, NEA, Nyca Partners, and Silicon Valley Bank.
• ISARA Corp, a Waterloo, Ontario-based provider of agile quantum-safe security solutions, is raising $10 million in Series D funding. Shasta Ventures will lead the round.
• Item 9 Labs, a provider of cannabis products and delivery platforms, raised $7.7 million in funding. The investor was VIRIDI Group.
• Understory, a Madison, Wisc.-based weather network and analytics company, raised $7.5 million in Series A funding. 4490 Ventures led the round, and was joined by investors including Revolution’s Rise of the Rest Seed Fund.
• Alcide, an Israel-based provider of a microservices firewall for application networking security, raised $7 million in Series A funding. Investors include CE Ventures, Intel Capital and Elron.
• Jiobit, a Chicago-based provider of wireless location-based technologies, raised $6.5 million in funding from NETGEAR.
• Lightfoot, a U.K.-based cleantech engineering company, raised 3.2 million pounds ($4.1 million) in funding. The investor was BGF.
• Enboarder, a Sydney, Australia-based human resources tech startup, raised $4 million in funding. Greycroft led the round, and was joined by investors including Our Innovation Fund.
• Jump Technologies, an Eagan, Minn.-based hospital supply chain solutions provider, raised $2 million in funding. Black Granite Capital led the round, and was joined by investors including Mount Sinai Ventures.
HEALTH AND LIFE SCIENCES DEALS
• Camel-IDS, a Belgium-based developer of cancer-targeted radiopharmaceuticals, raised 37 million euros ($42.3 million) in Series A funding. V-Bio Ventures and Gimv led the round, and were joined by investors including HealthCap, Novo Seeds, Pontifax and BioMedPartners.
• QurAlis Corporation, a Cambridge, Mass.-based biotech company focused on developing precision therapeutics for ALS and other neurological diseases, raised $5.5 million in seed funding. Investors include BioInnovation Capital, Viva Biotech Limited, MP Healthcare Venture Management and Amgen Ventures.
PRIVATE EQUITY DEALS
• GTCR agreed to acquire and merge Ultimus Fund Solutions, a Cincinnati, Ohio-based provider of mutual fund services to small and mid-sized fund companies, and The Gemini Companies. Financial terms weren't disclosed.
• Ampersand Capital acquired Pacific Biomarkers, a Seattle-based provider of specialty biomarker development and central laboratory testing services for the pharmaceutical and biotech markets. Financial terms weren't disclosed.
• Sun Capital and StonePoint Materials LLC agreed to acquire VantaCore Partners, a Houston, Texas-based producer of crushed stone, sand and gravel. Financial terms weren't disclosed.
• Eyesouth, which is backed by Shore Capital Partners, invested in Georgia Eye Associates, a provider of eye care services. Financial terms weren't disclosed.
• Pine Tree Equity recapitalized RevMd, a Westmont, Ill.-based provider of revenue cycle management services focused on insurance claims resolution services and self-pay collections for hospitals. Financial terms weren't disclosed.
• David’s Bridal, a Conshohocken, Penn.-based wedding retailer, filed for Chapter 11 bankruptcy protection. David’s Bridal is backed by Clayton, Dubilier & Rice and Leonard Green & Partners. Read more.
• AllianceBernstein agreed to buy Autonomous Research, a London-based financial services and fintech focuses institutional research firm. The deal was reportedly valued at $110 million.
• TNG FinTech Group, a Hong Kong-based digital wallet maker, plans to raise $300 million in an U.S. IPO, Bloomberg reports citing sources.
• Gateway Casinos and Entertainment, a Canadian gaming operator, filed for a $100 million IPO. It posted revenue of $478.8 million and loss of $65.1 million in 2017. Catalyst Capital backs the firm. Morgan Stanley is the underwriter. It plans to list on the NYSE as “GTWY”. Read more.
• Virgin Trains, a Miami-based express passenger rail system, filed for a $100 million IPO. It posted revenue of $5.2 million in the nine months ending Sept. 2018, and loss of $87 million. Fortress • Investment Group backs the firm. Barclays, J.P. Morgan and Morgan Stanley are underwriters. It plans to list on the Nasdaq as “VTUS.” Read more.
• Cibus, a San Diego-based maker of gene-editing tech for the agriculture industry, filed for a $100 million IPO. It posted revenue of $2.7 million in 2017 and loss of $46.2 million. BV Partners backs the firm. Morgan Stanley, BofA Merrill Lynch and Piper Jaffray are underwriters. It plans to list on the Nasdaq as “CBUS.” Read more.
• Silvergate Capital, a La Jolla, Calif.-based bank focused on cryptocurrency firms, filed for a $50 million IPO. It posted total interest income of $48.3 million in 2017, and net income of $7.6 million. BankCap and Partner Reinsurance Company back the firm. Barclays and Keefe, Bruyette & Woods are underwriters. It plans to list on the NYSE as “SI.” Read more.
• Golden Gate Capital acquired Active Minerals International LLC, a Sparks, Md.-based provider of specialty industry minerals. The seller was Merit Capital Partners. Financial terms weren't disclosed.
• SS&C Technologies Holdings Inc acquired Intralinks Holdings Inc, a New York-based provider of SaaS solutions for secure enterprise content collaboration, for $1.5 billion. Siris Capital Group was the seller.
• Audax Private Equity acquired PlayMonster LLC, a Beloit, Wisconsin-based maker of games and toys. The seller was Topspin Partners. Financial terms weren't disclosed.
• iHeartMedia agreed to acquire Jelli, a San Mateo, Calif.-based company bringing programmatic ad-buying to radio broadcasters. Financial terms weren't disclosed. Jelli had raised approximately $40.6 million in funding from investors including Battery Ventures, Relay Ventures, and Intel Capital.
FIRMS + FUNDS
• PAG, a Hong Kong-based investment firm, raised $6 billion for its third Asia-focused buyout fund.
• Littlejohn & Co., LLC, a Greenwich, Ct.-based investment firm, raised $2.84 billion for Littlejohn Fund VI, L.P.