Why did crypto exchange Binance exit FTX?

Sam Bankman-Fried has a flair for the grand.

When the Financial Times earlier this month asked the 29-year-old if his two-year-old crypto derivatives exchange could one day buy established financial giants like Goldman Sachs or the CME Group, he did not shy away. If FTX were to surpass other crypto exchanges like Coinbase or Binance, buying those organizations “is not out of the question,” the CEO said at the time.

Then in March, the young company closed a 19-year, $135 million deal this year giving it the naming rights to the Miami Heat’s home stadium. FTX later added star Tom Brady and Gisele Bundchen to its roster of investors, making the high-profile duo brand ambassadors to the crypto exchange.

On Tuesday, the crypto exchange raised $900 million more at an $18 billion valuation to fuel its ambitious goals. 

Pointing to the excitement investors feel around crypto trading (and perhaps some fear-from-missing-out after Coinbase’s IPO), despite the pullback in Bitcoin prices, FTX brought together a group of high-profile names into the Series B round. Investors included SoftBank, Sequoia Capital, Third Point, Thoma Bravo, Paradigm, Ribbit Capital, Insight Partners, Third Point, Lightspeed Venture Partners, Altimeter, BOND, NEA, Coinbase Ventures, Circle, Alan Howard, Multicoin… you get it. The list goes on.

Despite the big numbers and loud names however, conspicuously missing from the list of investors was the world’s largest crypto exchange by volume, Binance. Binance announced that it had made a strategic equity investment in FTX in 2019. 

On Tuesday, Forbes reported that the larger exchange had indeed divested of its stake in FTX, with Binance CEO Changpeng Zhao portraying the exit as “part of a normal investment cycle.”

Which seems like a strange way of putting it. Binance’s investment was after all a strategic one, not one about portfolio construction. It was about the duo working together on the business side and building out their respective trading platforms together, according to the 2019 blog post about the relationship. That’s not something that just goes away as part of a routine “investment cycle.”

At any rate, it’s not clear exactly what happened beyond what Zhao told Forbes. But it is worth noting that Binance and FTX are at times considered rivals, while Binance is facing a raft of regulatory issues currently. The U.K. in June restricted the exchange’s activities, while regulators in the U.S. are looking into the company as well. Meanwhile FTX, which in the past stringently avoided the U.S. market in fear of running afoul of regulators, has been carefully bolstering its U.S. presence, opening a location in Chicago in June.

And even as Coinbase goes public, bringing more certainty to the space, the continued lack of regulatory clarity on the broad industry remains a big overhang.

Lucinda Shen
Twitter: @shenlucinda
Email: lucinda.shen@fortune.com

Jessica Mathews compiled the IPO section of the newsletter.

VENTURE DEALS

- Ethos, a San Francisco-based insurance tech company, raised $100 million valuing it at $2.7 billion. SoftBank Vision Fund 2 was the investor.

- Soldo, a London-based business payments automation platform, raised $180 million in Series C funding. Temasek led the round.

- Amylyx Pharmaceuticals, a Cambridge, Mass.-based ALS treatment company, raised $135 million in Series C funding. Viking Global Investors led the round.

- Untether AI, a Canadian chip maker, raised $125 million. Tracker Capital Management and Intel Capital led the round and were joined by investors including Canada Pension Plan Investment Board and Radical Ventures. 

- Spendesk, a Paris-based spend management platform, raised €100 million ($118 million) in Series C funding. General Atlantic led the round and was joined by investors including Index Ventures and Eight Roads Ventures.

- FloQast, a Los Angeles-based workflow automation software company, raised $110 million in Series D funding. Meritech Capital led the round and was joined by investors including Redpoint Ventures, Sapphire Ventures, Coupa Ventures, Insight Partners, Polaris Partners, and Norwest Venture Partners. 

- Fabric, a Seattle-based e-commerce platform, raised $100 million in Series B funding. Stripes led the round.

- Loop Returns, a Columbus, Oh.-based retail returns software company, raised $65 million in Series B funding. CRV led the round and was joined by investors including Shopify, Renegade Partners, FirstMark Capital, Ridge Ventures, Peterson Ventures, and Lerer Hippeau. The deal values the company at $340 million.

- Titan, a New York City-based investment platform, raised $58 million in Series B funding. Andreessen Horowitz led the round and was joined by investors including General Catalyst, BoxGroup, and Ashton Kutcher's Sound Ventures. 

- Yapily, a London-based open banking infrastructure provider, raised $51 million in Series B funding. Sapphire Ventures led the round.

- Phononic, a Durham, N.C.-based solid-state cooling and heating technology company, raised $50 million from the Sustainable Investing business within Goldman Sachs Asset Management.

- Little Spoon, a New York City-based baby food startup, raised $44 million in Series B funding. Valor Equity Partners led the round.

- Block Renovation, a New York City-based renovation platform, raised $40 million in funding. Giant Ventures led the round and was joined by investors including NEA, Morningside, Lerer Hippeau, and Obvious Ventures.

- Rivus Pharmaceuticals, a Charlottesville, Va.-based biopharmaceutical company focused on cardio-metabolic health, raised $35 million in Series A funding. Longitude Capital and Medicxi led the round and were joined by investors including RxCapital.

- b.well Connected Health, a Baltimore, Md.-based health care tracking platform, raised $32 million in Series B funding. HLM Venture Partners led the round and was joined by investors including ThedaCare, UnityPoint Health Ventures, and Well Ventures.

- Valoreo, a Mexico City-based e-commerce operator, raised $30 million in Series A funding. Presight Capital and Kingsway Capital led the round.

DNSFilter, a Washington D.C.-based content filtering company, raised $30 million in Series A funding. Insight Partners led the round.

- Lev, a New York City-based maker of commercial real estate financing software, raised $30 million at a $130 million valuation. Greenspring led and was joined by investors including First American Title, NFX, Canaan Partners, JLL Spark, Animo Ventures, and Ludlow Ventures.

- Numerade, a Los Angeles-based tutoring-focused edtech, raised $26 million in Series A funding.  IDG Capital led the round and was joined by investors including General Catalyst, Mucker Capital, and Kapor Capital as well as Alumni Ventures Group, Interplay Ventures, and Toy Ventures.

- Camus Energy, a San Francisco-based advanced grid management software maker, raised $16 million in Series A funding. Park West led the round and was joined by investors including Congruent Ventures.

- Simfoni, a San Francisco-based spend automation company, raised $15 million in Series B funding. Peakspan Capital led the round.

- BlueOcean, a San Francisco-based brand marketing platform, raised $15 million in Series A funding. Insight Partners led the round.

- Collectiv Food, a London-based fresh products supply chain company, raised £12 million in Series A funding. VNV Global led the round and was joined by investors including VisVires New Protein, Octopus Ventures, Norrsken VC, Partech, Colle Capital, and Mustard Seed.

- Lucata, a New York City-based provider of graph analytics and machine learning, raised $11.9 million in Series B funding. Investors included Notre Dame, Middleburg Capital Development, Blu Ventures, Hunt Holdings, Maulick Capital, the former CEO of SGI, and Varian Capital.

- ClimateAi, a San Francisco-based climate risk modelling startup, raised $12 million in Series A round funding. Radical Ventures led the round and was joined by investors including Finistere Ventures and FootPrint Coalition Ventures.

- US Mobile, a New York City-based mobile virtual network operator, raised $11.5 million in Series A funding. Volition Capital led the round.

- Aromyx, a Mountain View, Calif.-based biotech focused on applying sensory data, raised $10 Million in Series A funding. Rabo Food&Ag Innovation Fund and SOZO Ventures led the round.

- Vitally, a Brooklyn-based customer and sales analytics software maker, raised $9 million in Series A funding. Andreessen Horowitz led the round.

- Fero Labs, a New York City-based machine learning software maker, raised $9 million in Series A funding. Innovation Endeavors led the round and was joined by investors including Deutsche Invest VC. 

- Vincent, a New York City-based online investment search company, raised $6 million. Investors included Jason Calacanis of LAUNCH, Joe Lonsdale of 8VC, and Barry Silbert of Digital Currency Group.

- Cake, a Boston-based platform for end-of-life planning, raised $3.7 million in funding. Investors include AARP, InHealth Ventures, Two Lanterns, Portfolia’s Aging, Longevity Fund, Scrum Ventures, Reflect Ventures, GoAhead Ventures, Pillar, and OCA Ventures.

- Oliva, a U.K.-based online mental healthcare company, raised £2.2 million ($3 million) in pre-seed funding. Moonfire Ventures led the round.

PRIVATE EQUITY

- Bain Capital Private Equity acquired PartsSource, an Aurora, Oh.-based online marketplace for medical equipment and maintenance parts. Financial terms weren't disclosed.

- CIVC Partners invested in KeyData Associates, a Canadian cybersecurity services company. Financial terms weren't disclosed.

- Clearview Capital recapitalized Infinity Worlds and Belmont Partners Sales, two companies with locations in Northwest Arkansas, Chicago and St. Louis that market products to the likes of Costco and Walmart. Financial terms weren't disclosed.

- Clearlake acquired BakeMark, a Pico Rivera, Calif.-based baked goods maker, from Pamplona Capital Management. Financial terms weren't disclosed.

- Closed Loop Partners and Panda Restaurant Group invested in Just Salad, a New York City-based salad chain. Financial terms weren't disclosed.

- Gauge Capital invested in NINJIO, a Westlake Village, Calif.-based cybersecurity training company. Financial terms weren't disclosed.

- Summa Equity acquired a majority stake in G-CON, a College Station, Tx.-based manufacturer of prefabricated cleanrooms used for manufacturing within the pharmaceuticals industry. Financial terms weren't disclosed.

EXIT

- BYJU'S acquired Epic, a Redwood City, Calif.-based digital library for kids, for $500 million. Evolution Media Capital and UMC Capital backed the firm.

- Pye-Barker acquired Rapid Fire Protection Group, a Rapid City, S.D.-based fire protection company, from Boynes Capital. Financial terms weren't disclosed.

- Morgan Stanley Capital Partners acquired Alliance Technical Group, a Decatur, Al.-based environment testing and compliance company, from Align Capital Partners. Financial terms weren't disclosed.

IPO

- Clarios International, a Milwaukee, Wis.-based battery maker backed by Canada’s Brookfield Asset Management, is looking to raise at as high as a $10.7 billion valuation in an IPO.

- Paycor HCM, a Cincinnati, Oh.-based human capital management software company, raised $425.5 million in an offering of 18.5 million shares priced at $23 per share—up from previous plans to raise up to $338.5 million. Apax Partners backs the firm.

- DoubleDown Interactive, a South Korea-based online casino game developer, refiled for an IPO. It now plans to raise up to $126.3 million in an offering of 6.3 million ADSs priced between $18 and $20—up from previous plans to raise $85.8 million. The company generated $358.3 million in 2020 and $53.6 million in net income. DoubleU Games backs the firm.

- IsoPlexis Corporation, a Branford, Conn.-based disease detection company, filed for an initial public offering. The company generated gross profit of $5.4 million in 2020 and reported a net loss of $23.3 million. BlackRock, Danaher, and Northpond Ventures back the firm.

- Clearwater Analytics, a Boise, Idaho-based cloud-based software company for financial services companies, is weighing an initial public offering, per Bloomberg.

SPAC

F+FS

- Anzu Partners, a Washington D.C.-based life-sciences-focused investment firm, raised $130 million for a venture fund aiming at a $300 million close. 

- Speedinvest, a London-based early-stage VC, closed its second specialist marketplaces and consumer fund at €60 million.

- Renaissance Venture Capital, an Ann Arbor, Mich.-based venture firm, closed its fourth fund with $77.5 million.

PEOPLE

- AE Industrial Partners, a Boca Raton, Fla.-based private equity firm, named Melissa Klafter as a partner and its Chief Financial Officer.

- GV, formerly known as GV, named Crystal Huang and Sangeen Zeb as investing partners focused on enterprise and fintech.

- Bessemer Venture Partners, a San Francisco-based investor, named Mike Giampapa to vice president.