BACK TO THE FUTURE
Good morning, Term Sheet readers.
Kleiner Perkins Caufield & Byers is trying to re-brand into the Kleiner of the past.
The storied venture firm announced it has officially raised $600 million for its 18th flagship fund. The fund will focus on early-stage investing across sectors including consumer, enterprise, hard tech and fintech.
“As we deliberated our strategy and studied our history, the answer was clear: we're going ‘back to the future’ returning to Kleiner's roots,” reads a Kleiner blog post.
Ironically, there isn’t much of the old Kleiner DNA left at at the firm to help it return it to its roots.
In December, Kleiner general partner Eric Feng announced he would leave the firm after more than three years of investing in early-stage consumer startups. Partners Lynne Chou-O’Keefe and Beth Seidenberg also left earlier last year.
This means only two of the original five GPs who were part of the Kleiner Perkins Caufield & Byers XVII fund are staying on for the latest fund. Ted Schlein and Wen Hsieh will lead the venture fund alongside relative newcomers Mamoon Hamid (ex-Social Capital) and Ilya Fushman (ex-Index Ventures).
“If you look at the history of Kleiner, it was a very small firm focused on backing entrepreneurs at the earliest stages,” Fushman, who has been at Kleiner for 10 months, tells Term Sheet about the latest fundraise. “That’s what we want to do. We want to do it in a boutique-style now, which is very-high touch.”
The “boutique style” approach comes four months after news that Mary Meeker, along with the rest of Kleiner’s growth investment team, would spin out of the storied firm and raise their own $1.25 billion fund called “Bond.”
Of course, it’s obvious why Kleiner wants to “return to its roots” — early-stage is where the big money is made. The 47-year-old firm used to be a hit machine, making investments in the early rounds of knockout companies that went on to become industry titans. But Kleiner’s glory days ended years ago.
The firm missed the early window on some of the biggest deals that defined the last decade — Facebook, Twitter, and Snapchat. Returns across its early-stage practice have suffered as a result, according to return data obtained by Term Sheet.
A limited partner, who has invested in several of Kleiner’s previous funds but did not participate in the latest flagship vehicle, views Kleiner as a brand new firm because of the composition of the team. They tell me, however, the turnover at the firm is a positive given the stretch of mediocre returns that the early-stage team has delivered to its investors over the last decade.
Behind its flashy ‘Back to the Future’ slogan, Kleiner’s reality is that it’s a new team with a new strategy. A lot is riding on this $600 million fund as this is likely the firm’s last attempt at re-gaining the momentum and relevance it once had.
• Better Mortgage, a New York City-based digital mortgage lender, raised $70 million in Series C funding. Investors include American Express Ventures, Healthcare of Ontario Pension Plan, Kleiner Perkins, Goldman Sachs and Pine Brook.
• Augury, a New York-based AI-based machine health solution provider, raised $25 million in Series C funding. Insight Venture Partners led the round, and was joined by investors including Eclipse Ventures, Munich Re/HSB Ventures, Pritzker Group Venture Capital, and Lerer Hippeau.
• GoCo, a Texas-based HR and benefits platform, raised $7 million in Series A funding. ATX Seed Ventures led the round.
• HitRecord, a Glendale, Calif.-based digital artist collaboration platform, raised $6.4 million in Series A funding. Javelin Venture Partners led the round, and was joined by investors including Crosslink Capital and Advancit Capital.
• Step, a San Mateo, Calif.-based financial services company aimed at teens, raised $3.8 million in seed funding. Investors include Crosslink Capital, Collaborative Fund, and Sesame Ventures.
• 720 Degrees, a Finland-based climate analytics startup, raised 2.9 million euros ($3.3 million) in funding. Investors include Pi Labs.
• Orca AI, an Israel-based provider of AI-backed navigational solutions for the shipping industry, raised $2.6 million in seed funding. MizMaa Ventures led the round.
• Distributed, an AI-powered tech talent resourcing platform, raised £1.5 million ($2 million) in seed funding. Investors include Fuel Ventures.
• MyDataModels, a France-based developer of an automated machine learning software platform, raised 1 million euros ($1.5 million) in seed funding, from Earlybird Venture Capital.
• Workit Health, an Ann Arbor, Mich., and Lafayette, Calif.-based telehealth addiction treatment company, raised funding of an undisclosed amount. Blue Cross Blue Shield Venture Partners led the round, and was joined by investors including Endeavor Catalyst, Montage Ventures, Lux Capital, Wakestream Ventures, Invest Detroit and RRE Ventures.
• Gatsby, a New York-based commission-free options trading platform, raised $500,000 in funding. Investors include Barclays, SWS Venture Capital, Radius Bank and Techstars.
HEALTH AND LIFE SCIENCES DEALS
• Ashish Life Science, an India-based generic veterinary pharmaceuticals company, raised INR 45 crores (about $6.3 million) in Series A funding. Eight Roads Ventures India led the round, and was joined by investors including Anterra Capital.
PRIVATE EQUITY DEALS
• Albireo Energy, which is backed by Huron Capital, acquired EMS Technologies, an Edison, New Jersey-based provider of building automation and network integration solutions. Financial terms weren't disclosed.
• Victor Capital Partners made an investment in Tender Corporation, a Littleton, N.H.-based seller of consumer products. Financial terms weren't disclosed.
• Vance Street Capital acquired Applied Plastics, a Norwood, Mass.-based provider of specialty PTFE coatings on wires and other metal-based components for the medical device industry. Financial terms weren't disclosed.
• Periscope Equity made an investment in Power Digital Marketing Inc, a San Diego, Calif.-based digital marketing agency. Financial terms weren't disclosed.
• OpenText (NASDAQ: OTEX) acquired Catalyst Repository Systems, Inc, a provider of eDiscovery solutions for corporate legal departments and law firms. Financial terms weren't disclosed.
• Virgin Trains, a Miami-based express passenger rail system, says it plans to raise $510 million in an offering of 28.3 million shares priced between $17 to $19. It posted revenue of $5.2 million in the nine months ending Sept. 2018, and loss of $87 million. Barclays, J.P. Morgan and Morgan Stanley are underwriters. It plans to list on the Nasdaq as “VTUS.” Read more.
• Luckin Coffee, the Chinese coffee chain aiming at Starbucks Corp., is prepping for an IPO to raise $300 million in the U.S., Bloomberg reports citing sources. Read more.
• Duff & Phelps agreed to acquire Prime Clerk, a New York-based claims and noticing administrator. Financial terms weren't disclosed. Carlyle exited its position in Prime Clerk.
• Permira agreed to invest in Hana Group, a provider of sushi to grocery retailers. Financial terms weren't disclosed. The seller was TA Associates.
• Relay Ventures promoted Jake Cassaday to partner.
• VMG Partners promoted Angad Hira to chief financial officer.