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There’s been a lot of talk and interest around Opportunity Zones, a new capital gains exemption for people who make long-term investments in underserved communities. My colleague Lucinda caught up with Goldman Sachs’ opportunity zone arm for an update.
Though some potential opportunity funds froze during the government shutdown, Goldman Sachs Urban Investment Group says it was hardly affected by the lack of regulatory clarity.
While the fund is still waiting for more details from Washington regarding equity and loan investments in the 8,700 or so Opportunity Zones that offer tax breaks to new investors, Goldman Sachs has been able to go ahead on real estate calls.
Specifically, the group has been able to close about seven to eight such investments ranging from $10 million to $80 million in cities including Baltimore, New Jersey, and New York, with a "significant pipeline" to come.
“It’s really interesting to see that Opportunity Zones are in the context of what we’re already doing,” said Margaret Anadu, who heads Goldman Sachs’ Urban Investment Group. In its regular line of business, the team invests in multiple assets (such as equity, real estate, and loans) using a mix of both client and Goldman’s own funding, focusing on economically underserved areas. Most recently, the group offered a $50 million debt facility to to student loan provider Climb Credit.
Anadu added that most of the Opportunity Zone investments weren’t in the works before the legislation came to light, though it’s been able to source many deals because it was already on the ground in many of these neighborhoods.
Although Goldman Sachs’ Opportunity Zone has used the bank’s own money to make investments, it has also seen interest from clients.
DOUBLE DEAL: Spotify revealed the exact amount it spent to acquire podcasting companies Gimlet and Anchor — nearly $340 million. The breakdown comes to ~$200 million for Gimlet and ~$140 million Anchor. Here’s my explainer on why Spotify is on a podcast shopping spree.
A DIVERSITY SHORTAGE: In June, the co-founder of TPG was scolded for a “stunning” lack of diversity at the private equity giant. Now, the buyout firm is fast-tracking women and ethnic minorities to its partnership ranks, according to a new report. TPG recently reconfigured its partnership recommendation process to vet and consider women and minority candidates for promotion a year earlier than normal. Read more.
• DriveNets, an Israel and Red Bank, N.J.-based networking software company, raised $110 million in funding. Bessemer Venture Partners and Pitango Growth led the round.
• Figma, an open source design platform, raised $40 million in Series C funding. Sequoia Capital led the round, and was joined by investors including Coatue, Founders Fund, Index, Greylock and KPCB.
• Teckro, an Ireland-based company that uses machine learning technology and aims to improve the speed and accuracy of clinical trials, raised $25 million in Series C funding. Northpond Ventures led the round, and was joined by investors including Founders Fund, Sands Capital Ventures, Section 32, and Borealis Ventures.
• Peltarion, a Sweden-based operational AI company, raised $20 million in Series A funding. Euclidean Capital led the round, and was joined by investors including FAM and EQT Ventures.
• Inshur, a digital provider of commercial auto insurance, raised $7 million in Series A funding. Munich Re Ventures led the round, and was joined by investors including MTech Capital.
• Tank Utility, a Boston-based provider of IoT tank monitoring and logistics optimization services, raised $6 million in funding. Bullpen Capital led the round.
• MākuSafe, a West Des Moines, Iowa-based provider of safety solutions for workers, raised nearly $3 million in seed funding. Investors include EMC Insurance Companies and Next Level Ventures.
• Turning Point, an Eatontown, N.J.-based restaurant chain, raised funding of an undisclosed amount. Investors include NewSpring Mezzanine and Larsen MacColl Partners.
HEALTH AND LIFE SCIENCES DEALS
• Burning Rock, a China-based provider of sequencing diagnostics solutions for precision medicine in oncology, raised RMB 850 million (more than $125 million) in Series C funding. GIC led the round, and was joined by investors including LYFE Capital, CMB International Capital, Lilly Asia Ventures, Sequoia Capital China and T&Brothers Capital.
• Sight Diagnostics, a Tel Aviv, Israel-based operator of an AI-powered blood testing company, raised $27.8 million in Series C funding. Longliv Ventures led the round, and was joined by investors including OurCrowd, Go Capital and New Alliance Capital.
PRIVATE EQUITY DEALS
• Continental Batteries, a portfolio company of Incline Equity Partners, acquired Battery Distributors Inc, an Atlanta-based provider of aftermarket batteries to the automotive, commercial, golf and marine markets. Financial terms weren't disclosed.
• Mason Wells sold Aquion Inc, a Roselle, Ill.-based maker of water treatment equipment and water quality solutions, to Pentair plc. The value of the deal was $160 million.
• Main Post Partners invested in DeMert Brands, parent company of Not Your Mother’s, a Tampa, Fla.-based haircare brand. Financial terms weren't disclosed.
• Ant Financial agreed to acquire WorldFirst, a U.K.-based currency exchange. Financial terms weren't disclosed.
• Alight, a Lincolnshire, Ill.-based human resources management software maker, filed for an IPO estimated to raise $600 million, Renaissance Capital reports. It posted revenue of $1.7 billion in the nine months ending Sept. 2018 and loss of $39 million. Blackstone, New Mountain Capital, and Abu Dhabi Investment Authority back the firm. BofA Merrill Lynch, J.P. Morgan, and Morgan Stanley are underwriters. It plans to list on the Nasdaq as “ALIT.” Alight filed confidentially on October 2, 2018. Read more.
• Levi Strauss, the San Francisco-based jeans maker, filed for a $100 million IPO. It posted revenue of $5.8 billion in the year ending Nov. 2018 and income of $283 million. It plans to list on the NYSE as “LEVI.” Goldman Sachs, J.P. Morgan, BofA Merrill Lynch, Morgan Stanley and Evercore ISI are underwriters. Read more.
• Stealth BioTherapeutics, a Newton, Mass.-based Phase 3 biotech developing therapies for mitochondrial diseases, raised $78 million in an offering of 6.5 million ADSs priced at $12 a piece, the low end of its range. The firm posted loss of $70.1 million in the nine months ending Sept. 2018. Morningside Venture backs the firm. Jefferies, Evercore ISI, and BMO Capital Markets are underwriters. It plans to list on the Nasdaq as “MITO.” Read more.
• Alyssa Jaffee joined 7wireVentures as vice president.