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A few months ago, I received an email from a Term Sheet reader that asked a valid question no one in the press was asking: Where has WeWork’s other co-founder Miguel McKelvey been in this mess? “Every story on WeWork is talking about Adam Neumann, but no mention of his co-founder,” the email read. “Why didn’t he speak out more? Or if he did – what is his side of story?”
I decided to try and answer those questions, and it turned into a full-fledged story. I listened to old podcasts, dug into interviews, and spoke with several company executives as well as McKelvey himself.
What I found was that McKelvey was a well-liked and well-respected figure who enjoyed a quiet, behind-the-scenes presence for years. He was helping open new WeWork locations, design the look and feel of the workspaces, and serve as a sounding board for employees inside the company. That all ended once his company spiraled into chaos when its CEO Adam Neumann was ousted and its anticipated IPO scrapped.
McKelvey spoke with me in his first public interview since the company’s period of turbulence last year. “Growth was one of our biggest focuses in the past, and I don’t think we were as focused as we should’ve been on making our product as great as it can be,” McKelvey said. “A big benefit to slowing down a little bit is that we’re going to focus on [the product] more.”
For a company whose IPO prospectus stressed fast growth, aggressive spending, and spiraling losses, this is a particularly surprising turn. Even more unusual is that McKelvey is suddenly quite involved in the company’s financial future.
“Just being honest, I was not deeply involved in the financial modeling,” McKelvey said. “There are things I didn’t understand in the past because it wasn’t my role, and I have jumped in a lot more recently.”
In October, WeWork released a 50-page presentation outlining some of the changes it planned to make in the next 90 days. One of the key principles says the company will focus on “the core WeWork desk business, prioritize disciplined growth with profitability, and right-size our operations.” It has since divested several businesses and dramatically reduced its workforce. It appears that WeWork wants to return to its roots and areas of focus that were important before 2017, the year that SoftBank agreed to pump $4.4 billion into the business.
McKelvey added that he’s worked with WeWork’s leadership team to devise a plan that he’s certain the company can succeed with, adding, “I’m here, I want to be involved, and I want to be part of our future.”
And then, he was off to his next meeting at WeWork’s headquarters. The formerly free-spirited, jet-setting cofounder who traveled the world to help expand WeWork’s reach is now stuck in conference rooms, crunching the numbers to see what’s feasible, rather than world-changing.
…SPEAKING OF WEWORK: GV (formerly Google Ventures) has bought out the majority of WeWork’s stake in women’s workspace startup The Wing as part of its plan to divest from its non-core businesses.
WeWork first led a $32 million funding round for The Wing in 2017 and invested again in its 2018 funding round, which resulted in a 21% ownership stake in the company.
My colleague Emma Hinchliffe reports that GV has bought out most of that stake, with the remainder going to existing investors Sequoia Capital and NEA. GV general partner Jessica Verrilli will join The Wing’s board of directors, replacing former WeWork chief legal officer Jennifer Berrent. Read more.
Polina Marinova
Twitter: @polina_marinova
Email: polina.marinova@fortune.com
VENTURE DEALS
- Memphis Meats, a San Francisco-based company that grows meat from animal cells, raised $161 million in Series B funding. SoftBank Group, Norwest and Temasek co-led the round, and were joined by investors including Richard Branson, Bill Gates, Threshold Ventures, Cargill, Tyson Foods, Finistere, Future Ventures, Kimbal Musk, Fifty Years, CPT Capital, KBW Ventures and Vulcan Capital.
- Personio, a Germany-based provider of HR software for small and medium-sized businesses, raised $75 million in Series C funding. Accel led the round, and was joined by investors including Lightspeed Venture Partners, Index Ventures, Northzone, Global Founders Capital, and Picus Capital.
- LumApps, a France-based social intranet for the enterprise, raised $70 million in Series C funding. Goldman Sachs Growth led the round, and was joined by investors including Bpifrance, Idinvest Partners, Iris Capital, and Famille C.
- Sysdig, Inc., a San Francisco-based developer of network and application monitoring software solutions, raised $70 million in Series E funding. Insight Partners led the round, and was joined by investors including Bain Capital Ventures, Accel, Glynn Capital, and Goldman Sachs.
- Liberis Group, a U.K.-based fintech focused on small business finance, raised $42 million in funding. FTV Capital led the round, and was joined by investors including Blenheim Chalcot.
- FloQast, a Sherman Oaks, Calif.-based provider of close management software for accountants, raised $40 million in Series C funding. Norwest Venture Partners led the round, and was joined by investors including Insight Partners and Polaris Partners.
- Outlier, an Oakland, Calif.-based provider of analytic solutions for businesses, raised $22.1 million in Series B funding. Emergence led the round, and was joined by investors including Ridge Ventures, 11.2 Capital, First Round Capital, Homebrew, Susa Ventures, and SV Angel.
- Shyft, a San Francisco-based relocation marketplace, raised $15 million in Series A funding. Inovia Capital led the round, and was joined by investors including Blumberg Capital and FJ Labs.
- Intezer, a New York-based cybersecurity company, raised $15 million in Series B funding. OpenView led the round, and was joined by investors including Intel Capital, Magma, Samsung NEXT, a USAA affiliate, and Alon Cohen.
- Placer.ai, a Los Altos, Calif.-based company providing location analytics and foot traffic data, raised $12 million in Series A funding. JBV Capital led the round, and was joined by investors including Aleph, Reciprocal Ventures, and OCA Ventures.
- Sayari Labs, a Washington D.C.-based data intelligence company, raised $9 million in Series B funding. Arsenal Growth led the round, and was joined by investors including Lavrock Ventures and SAPs National Security Services (NS2) Ventures.
- ConnectDER, a Philadelphia-based maker of a solution that enables the connection of grid-ready distributed energy resources, raised $7.25 million in Series B funding. Investors include Clean Energy Ventures and Skyview Ventures and Avista Development Inc.
- Circonus, a Fulton, Md.-based developer of a data analytics and monitoring platform for businesses, raised $6.8 million in Series A1 funding. Osage Venture Partners led the round, and was joined by investors including Bull City Venture Partners, Ben Franklin Technology Partners, and NewSpring.
- Tealbook, a Canada-based online supplier knowledge management platform, raised $5 million in seed plus funding. Refinery Ventures led the round, and was joined by investors including Grand Ventures, Workday Ventures, Stand Up Ventures and BDC Capital’s Women in Technology Venture Fund.
- Vicarius, an Israel-based predictive cyberthreat provider, raised $5 million in seed funding. Jerusalem Venture Partners led the round, - and was joined by investors including innogy Innovation Hub and Goldbell.
- Punch List, a San Francisco-based mobile app that helps independent contractors and homeowners complete home remodels, raised $4 million in funding. Investors include Bling Capital, Bedrock Capital, Ludlow Ventures, Mayfield Capital, and Jack Dorsey, Steve Chen, and Eric Wu.
- Fresh Bowl, a New York-based tech-enabled food brand, raised $2.1 million in seed funding. Betaworks Ventures and New Ground Ventures co-led the round, and were joined by investors including Tuesday, Mana Capital, Bling Capital, Awesome Ventures, Basecamp Ventures and Community Fund.
PRIVATE EQUITY DEALS
- Summit Partners invested in eClinical Solutions, a Mansfield, Mass.-based provider of cloud-based enterprise software and software-driven clinical data services. Financial terms weren't disclosed.
- Five Elms Capital invested $30 million in Skynamo, a South Africa-based field sales app and management platform provider.
OTHER DEALS
- Tencent will acquire Funcom (OB:FUNCOM) in a deal that values the company at $148 million (NOK 1.33 billion).
IPOs
- Arcutis Biotherapeutics, a Westlake Village, Calif.-based biotech focused on skin diseases, plans to raise $125 million (40% insider bought) in an offering of 7.8 million shares priced between $15 to $17 apiece. The firm posted losses of $19.3 million in 2018. Bain Capital (13.5%), Frazier Life Sciences (36.9%), and OrbiMed (15.1%) back the firm. It plans to list on the Nasdaq as “ARQT.” Read more.
EXITS
- Stone Point Capital and Further Global agreed to acquire Duff & Phelps, a New York-based valuation and corporate finance advisor, for $4.2 billion. Sellers include Permira.
- Palladium Equity Partners acquired Accupac, Inc, a Mainland, Penn.-based provider of outsourced manufacturing and packaging solutions for the personal care and beauty markets, from J.H. Whitney Capital Partners. Financial terms weren't disclosed.
FIRMS + FUNDS
- Canapi Ventures, a Wilmington, N.C.-based venture capital firm, raised $545 million across two venture capital funds.
- Two Sigma Ventures, a New York-based venture capital firm, raised $288 million for its fund, Two Sigma Ventures III, LP.
- Blossom Capital, a London-based venture capital firm, raised $185 million for its latest fund.
PEOPLE
- Great Hill Partners promoted Mary Kate Bertke to principal, and Bob Anderson, Veda Eswarappa, John Stanley, and Greg Stewart to vice president.
- Levine Leichtman Capital Partners named Josh Kaufman as managing director and Luc Sandmann as associate director.
- Crestline Investors named Frank Jordan to partner.
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