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Visa Makes Yet Another Cryptocurrency Investment: Term Sheet

Visa is co-leading a $40 million venture capital funding round in Anchorage, a cryptocurrency custody startup that, like Visa, is a founding member of Facebook Libra project. Visa is co-leading a $40 million venture capital funding round in Anchorage, a cryptocurrency custody startup that, like Visa, is a founding member of Facebook Libra project.
Visa is co-leading a $40 million venture capital funding round in Anchorage, a cryptocurrency custody startup that, like Visa, is a founding member of Facebook Libra project. Dmitry Feoktistov—TASS

Visa has invested millions of dollars in Anchorage, a startup that secures cryptocurrency holdings for institutional investors. The two companies are founding members of Facebook's high-profile cryptocurrency project Libra.

Anchorage raised $40 million in fresh funding. Visa and Blockchain Capital co-led the round. This is the second known investment Visa has made in a cryptocurrency startup, the first having been made four years ago in Chain, an enterprise blockchain firm acquired in September by Lightyear, a startup affiliated with the cryptocurrency Stellar. The company has raised a total of $57 million in funding to date from investors including Andreessen Horowitz, Khosla Ventures, and SV Angel.

My colleague Robert Hackett reports:

Anchorage was little-known before June 18, when its logo appeared alongside boldfaced names such as Mastercard, PayPal, Uber, Spotify, and, notably, Visa, on a slide introducing the Libra Association. Facebook instigated the creation of the association, a Swiss nonprofit comprised of 28 organizations that plans to grow to 100 by next year, to support its ambitious push for a global cryptocurrency. 

Terry Angelos, who leads Visa's efforts in financial tech, or fintech, said in a statement that Visa is interested in supporting "companies like Anchorage who are working to provide secure infrastructure to the growing ecosystem of digital assets." He said that Anchorage "is building the foundation to support an array of new financial services.”

Diogo Monica, Anchorage's co-founder and president, told Fortune that his team has been working with Facebook on designing the technical underpinnings of the Libra cryptocurrency "since Day One, since it was basically only two people at Facebook." Those two people were David Marcus, a Facebook executive who leads the Libra project, and Morgan Beller, a Libra co-creator who heads strategy at Colibra, a Facebook subsidiary focused on Libra, Monica said.

Anchorage's product offers an alternative to "cold storage," a safety measure investors commonly rely on for the secure storage of their cryptocurrency holdings. Cold storage custody, as it's called, typically involves stashing so-called private keys, the password-like strings of letters and numbers that grant ownership of cryptocurrency, in hard-to-reach, offline places, such as inside mountains or bank safety deposit boxes.

The reason this company is one to keep your eye on is that its reach extends outside of the crypto world. Its digital asset custody service could lure big-time commercial banks, endowments, pensions, and mutual funds into the depths of blockchain. 

Read more.

TAKING ON AMAZON: Bolt, an online checkout startup that publicly debuted in January of 2018, has raised $68 million in new funding. The new round is co-led by Activant Capital and Tribe Capital, and includes personal investments from current and former leaders at retailers including Allbirds, Bombas, and Jet.com. The investments bring Bolt’s total funding to $90 million. 

Fortune’s David Z. Morris reports:

Bolt’s goals are about as grandiose as they get in the picks-and-shovels world of business services: the startup wants to provide a one-stop checkout software package for independent retailers, and in the process, give them a fighting chance against the behemoth known as Amazon

According to Ryan Breslow, Bolt’s CEO and co-founder, Amazon has “spent hundreds of millions of dollars perfecting the flow” of the site’s buying experience. That faster checkout "flow" can encourage shoppers to spend more. In a 2017 study, for instance, the digital infrastructure firm Akamai found that websites that were just 1/10th of a second slower than competitors’ saw the conversion rate—the rate at which site visitors actually made a purchase—drop by 7%. Online retail is particularly brutal at the point of checkout, with as many as 80% of shoppers simply abandoning their carts before paying.

Read more at Fortune.com

McKINSEY’S SECRETS: If the following headline doesn’t grab your attention, I don’t know what will. Institutional Investor published a story titled, The Story McKinsey Didn’t Want Written. It’s a detailed account of McKinsey & Company’s internal hedge fund and its potential conflicts of interest. “It’s alarming they have a hedge fund,” says Matthew Stewart, a former consultant at a firm that was started by ex-McKinsey consultants. “They have a huge amount of inside information, which raises serious conflict issues at multiple levels,” Stewart says, adding that McKinsey’s power in the world of business and government “puts them in a kind of an oligarchic position.” 

THE FASTEST, RICHEST TEXAN EVER: H. Ross Perot, the self-made Texas billionaire who rose from a childhood of Depression-era poverty and twice ran for president as a third-party candidate, died at age 89. Fortune was the first to publish a major profile of H. Ross Perot in 1986. It was titled: "The Fastest, Richest Texan Ever."

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VENTURE DEALS

TrustArc Inc, a San Francisco-based provider of privacy management solutions, raised $70 million in Series D funding. Bregal Sagemount led the round, and was joined by investors including Accel Partners, Baseline Ventures, DAG Ventures, Icon Ventures and Industry Ventures

Signpost, a New York-based cloud platform focused on marketing for local businesses, raised $52 million in funding. Investors include HighBar Partners, BMO Bank of Montreal, Georgian Partners and Spark Capital. 

Glitch, a New York-based online developer community, raised $30 million in Series A funding, from Tiger Global Management.

Stratasan, LLC, a Nashville-based healthcare data analytics software provider, raised $26 million in funding. Fulcrum Equity Partners led the round, and was joined by investors including Frist Cressey Ventures, Blue Heron Capital, and Bridge Bank. 

Sinequa, a France-based AI-powered search and analytics platform, raised $23 million in funding. Jolt Capital led the round.

Mesmer, a Palo Alto, Calif.-based creator of AI-powered bots, raised $15 million in Series A funding. Intel Capital led the round, and was joined by investors including True Ventures. 

Lightico, an Israel-based platform for digital customer interactions, raised $14.5 million in funding. Investors include Mangrove Capital Partners, Crescendo Venture Partners, lool ventures and Spinach Angels.

AblaCare, a Paris-based medical device firm focused on women’s health and fertility care, raised 10 million euros ($11.2 million) in Series A funding. The investor was Sofinnova Partners.

Anvyl, a platform that uses data analytics to reinvent supply chain processes, raised $9.3 million in Series A funding. Redpoint led the round, and was joined by investors including First Round Capital and Company Ventures. 

Mobile Doorman, a Chicago-based software provider of custom mobile apps connecting residents and their communities, raised $6.5 million in funding. Reimagined Ventures led the round.

VideoElephant, an Ireland-based online video distribution company, raised 5.5 million euros ($6.2 million) in funding. Act Venture Capital led the round.

Unmade, a U.K.-based fashion software company, raised 4.75 million pounds ($5.9 million) in funding. Octopus Ventures led the round, and was joined by investors including MMC Ventures and Felix Capital.

HEALTH AND LIFE SCIENCES DEALS

IGM Biosciences Inc, a Mountain View, Calif.-based biotech firm focused on developing engineered IgM antibodies for therapeutic use, raised $102 million in Series C funding. Investors include Redmile Group, Janus Henderson Investors and Vivo Capital.

Revolution Medicines Inc, a Redwood City, Calif.-based developer of medicines for cancer patients, raised $100 million in Series C funding. Investors include Boxer Capital of the Tavistock Group, Cormorant Capital, Deerfield Management, Fidelity Management & Research Company, Vivo Capital, Biotechnology Value Fund, Nextech Invest, Schroder Adveq, The Column Group, Third Rock Ventures and Casdin Capital.

Blue Water Vaccines, a Cincinnati, Ohio-based developer of a universal flu vaccine, raised $7 million in seed funding. CincyTech led the round.

PRIVATE EQUITY DEALS

Leeds Equity Partners LLC made an investment in Scaled Agile, a Boulder, Colo.-based provider of SAFe, a framework for enterprise agility. Financial terms weren’t disclosed. 

Clearlake Capital Group LP and TA Associates agreed to make an investment in DigiCert Inc, a Lehi, Utah-based provider of security solutions for identity and encryption. Financial terms weren’t disclosed. 

Seacoast Capital invested $9.5 million in The Wing Group, a Lafayette, Calif.-based maker of high-performance collars for rigid hull inflatable boats and a builder of inflatable watercraft. 

The Riverside Company made an investment in Compana, a Germany-based provider of recruitment software solutions for the temporary staffing sector. Financial terms weren’t disclosed. Riverside will merge Compana with portfolio company GermanPersonnel.

Abu Dhabi Investment Authority agreed to buy a 30% stake in Domestic & General, a London-based appliance care specialist. Financial terms weren’t disclosed. 

Main Capital invested nearly 50 million euro ($56.1 million) in GBTEC, a Germany-based provider of business process management solutions and consulting services.

Keystone Partners, a portfolio company of Silver Oak Services Partners LLC, acquired the career transition and leadership development business operations from Kensington International, Inc, a Chicago-based talent management company.

IPOs

Genmab, a Copenhagen, Denmark-based maker of antibody therapies and technologies for cancer, plans to raise $503 million in an IPO of 27.8 million ADSs priced at $18.11. It posted revenue of $455.3 million and income of $221.6 million for 2018. Artisan Partners backs the firm. BofA Merrill Lynch, Morgan Stanley, and Jefferies are underwriters. It plans to list on the Nasdaq as “GMAB.” Read more.

Afya, a Brazilian healthcare education group, plans to raise $234 million in an IPO of 13.7 million shares (14% insider) priced between $16 to $18. The firm posted revenue of $140 million in 2018 and income of $29.8 million. Morgan Stanley, BTG Pactual and XP Investimentos are underwriters. It plans to list on the Nasdaq as “AFYA.” Read more.

Fawry, a Egyptian digital bill payments firm, is preparing for an IPO that could raise $151 million, per Reuters citing unnamed sources. Read more.

EXITS

Tonka Bay Equity Partners sold Freshpack, a Denver-based specialty food distributor, to What Chefs Want. Financial terms weren’t disclosed.

KKR agreed to sell a majority stake in the Webhelp Group, a provider of customer experience and business process outsourcing, to Groupe Bruxelles Lambert for an enterprise value of 2.4 billion euros ($2.69 billion). Financial terms weren’t disclosed.  

Blue Road Capital acquired B&W Quality Growers LLC, a Fellsmere, Fla.-based producer of distinctive baby leaves, from Boyne Capital. Financial terms weren’t disclosed. 

Wind Point Partners agreed to sell Valicor Environmental Services, a provider of non-hazardous wastewater treatment services, to Pritzker Private Capital. Financial terms weren’t disclosed. 

FIRMS + FUNDS

Maniv Mobility, an Israel-based venture firm focused on mobility tech, raised $100 million for its second fund.

PEOPLE

Flare Capital Partners promoted Vic Lanio to principal.