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Google Cloud goes deep into financial services with $1 billion CME deal

November 4, 2021, 3:04 PM UTC

I didn’t see this coming.

While the financial services industry’s move toward the cloud has been a slow inevitability, it still came as a surprise when CME Group announced a 10-year-partnership with Google Cloud this morning, with Google saying it would also invest $1 billion in the exchange giant—currently the world’s most valuable.

Prima facie, it’s an odd deal: A search giant is investing in a financial services company that had its start well over a century ago.

Despite the age difference, what is perhaps more surprising is that this kind of a deal—investing in a customer—within the cloud giants is not that rare. Microsoft for instance invested in the $2 billion funding round of autonomous car company, Cruise, becoming an investor and a vendor for the startup’s cloud needs. When the Satya Nadella led tech giant was rumored to be in talks to acquire social media giant Discord in April (talks that have since stopped), part of the rationale appeared to have been around migrating the customer onto its own infrastructure. And we haven’t even gotten to the jockeying that happened around TikTok yet.  

Of course this all comes as Amazon Web Services remains the leading cloud provider, with the likes of Google and Microsoft all competing in the field. And in a sign of just how important the segment is, it was Andy Jassy, who led Amazon Web Services, who took over for founder Jeff Bezos earlier this year.

And now, with the CME deal, Google seems intent on honing in on the financial services industry, which has historically shied away from cloud migration over regulatory and privacy concerns.

Here’s Google Cloud CEO Thomas Kurian in conversation with the Wall Street Journal, calling the investment “a reflection of our commitment to the transformation of the financial system, not just to one company’s infrastructure.”

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

Jessica Mathews curated the IPO and SPAC sections of this newsletter.

VENTURE DEALS

- Treasure Data, a Mountain View, Calif.-based customer data company, raised $234 million in funding led by SoftBank. 

- Plate IQ, a San Francisco-based restaurant and hospitality accounts payable company, raised $160 million in Series B funding. FTV Capital led the round.

- Mythical Games, a Los Angeles-based gaming technology studio, raised $150 million in Series C funding. Andreessen Horowitz led the round valuing it at $1.3 billion. Other investors include D1 Capital, RedBird Capital, The Raine Group, Binance, and FTX. 

- Reltio, a Redwood City, Calif.-based data software company, raised $120 million in funding. Brighton Park Capital led the round and was joined by investors including Crosslink Capital, NewView Capital, RPS Ventures, Sapphire Ventures, and .406 Ventures. The deal values the business at $1.7 billion.

- Clade Therapeutics, a Cambridge, Mass.-based biopharmaceutical company focused on stem cell-based medicines, raised $87 million in Series A funding. Syncona led the round and was joined by investors including LifeSci Venture Partners, Emerson Collective, and Bristol Myers Squibb.

- Antios Therapeutics, a Mendham, N.J.-based biopharmaceutical focused on chronic hepatitis B virus, raised $75 million in Series B1 funding. GordonMD Global Investments led the round.

- Yellowbrick Data, a Palo Alto, Calif.-based data warehousing company, raised $75 million in Series C1 funding. Investors include Citadel, Third Point Ventures, Menlo Ventures, Next47, DFJ Growth, Threshold Ventures, GV, and IVP.

- Parthenon Therapeutics, a Cambridge, Mass.-based biotech focused on anti-cancer therapies, raised $65 million in Series A funding. Investors include Northpond Ventures, Pfizer Ventures, and Taiho Ventures. 

- PubNub, a San Francisco API company, raised $65 million in Series E funding. The Raine Group led the round and was joined by investors including Sapphire Ventures, Scale Ventures, HPE, and Bosch.

- Future Farm, a Latin America-based plant-based food maker, raised $58 million in Series C funding valuing the company at $400 million. BTG Pactual led the round and was joined by investors including Rage Capital.

- Kitman Labs, a Menlo Park, Calif.-based sports technology and analytics company, raised $52 million. Guggenheim Investments led the round.

- AscendEX, a Singapore-based crypto trading platform, raised $50 million in Series B funding. Polychain Capital and Hack VC led the round and were joined by investors including Jump Capital and Alameda Research.

- Valon, a New York City-based residential mortgage servicer, raised $43.9 million. Investors include Starwood Capital Group, Freedom Mortgage, Human Capital Management, CEO of SoftBank Group International Marcelo Claure, Andreessen Horowitz, New Residential Investment Corporation, Fortress Investment Group, and 166 2nd.

- Sofar Ocean, a San Francisco-based operator of ocean sensors, raised $39 million. Union Square Ventures and the Foundry Group led the round.

- FingerprintJS, a Chicago-based browser fingerprinting service. raised $32 million in Series B funding. Craft Ventures led the round and was joined by investors including Nexus Venture Partners and Uncorrelated Ventures. 

- Medallion, a San Francisco-based maker of tech for digital health companies, raised $30 million in Series B funding. Sequoia led the round and was joined by investors including Mario Schlosser (CEO of Oscar), Will Gaybrick (CPO of Stripe), Optum Ventures, Spark Capital, and Elad Gil. 

- Contra, a San Francisco-based independent work platform, raised $30 million in Series B funding. NEA led the round and was joined by investors including Unusual Ventures and Cowboy Ventures.

- Wellinks, a New Haven, Conn.-based digital health care company, raised $25 million in funding. Morningside Ventures led the round and was joined by investors including HighCape Capital, Connecticut Innovations, Benslie, and Stonehenge Capital.

- Merge API, a San Francisco and New York City-based provider of APIs for business-to-business purposes, raised $15 million in Series A funding. Addition led the round and was joined by investors including NEA. 

- Spartan Radar, a Los Alamitos, Calif.-based biomimetic radar maker, raised $15 million in  Series A funding. Prime Movers Lab led the round and was joined by investors including 8VC and Mac VC.

- Huckleberry, an Irvine, Calif.-based maker of an app focused on sleep and parenting, raised $12.5 million in Series A funding. Morningside Ventures led the round and was joined by investors including Spero Ventures and Tamarisc VC. 

- QuestDB, a San Francisco-based open source database, raised $12 million in Series A funding. Investors include 468 Capital, Uncorrelated Ventures, and Alexis Ohanian.

- Amberscript, an Amsterdam-based speech recognition company, raised $10 million. Endeit Capital led the round.

- Ethyca, a New York-based privacy tools company, raised $7.5 million. Investors include Lee Fixel, Lachy Groom, and Table Management.

- Quativa, a Los Angeles-based residential solar sales platform and marketplace, raised $7 million in Series A funding. Blueprint Equity led the round.

- Guardians Collective, a San Francisco-based maker of an early childhood education education site, raised $3.5 million in seed funding. Reach Capital led the round and was joined by investors including Impact America Fund and Gary Philanthropies.

- Osmoses, a Cambridge, Mass.-based maker of membrane technology for gas separations,  raised $3 million in pre-seed funding. The Engine led the round.

- thirteen lune, a Los Angeles-based beauty products maker, raised $3 million. Fearless Fund led the round.

- Blotout, a customer data platform, raised $3 million in seed funding. First Rays Venture Partners led the round and was joined by investors including Y Combinator, Pascal Capital, Launchpad Capital and FuboTV co-founder Sung Ho Choi.

- Sway, a Berkeley, Calif.-based maker of seaweed-based compostable replacements for single-use plastic packaging, raised $2.5 million. Valor Siren Ventures led the round and was joined by investors including Conservation International Ventures, Alante Capital, and BAM Ventures.

- Shortboxed, a San Francisco-based marketplace app for buying and selling graded comic books, raised $2.2 million in seed funding. Adam Draper of Boost VC led the round and was joined by investors including Webb Investment Network, and FinSight Ventures.

PRIVATE EQUITY

- Smarsh, backed by Ares Management and K1 Investment Management, acquired Micro Focus’ Digital Safe archiving and risk management portfolio, for $375 million. 

- PSG invested $32 million in The SKEEPERS Group, a French provider of software for brand development. Financial terms weren't disclosed.

- Ascensus, backed by Aquiline Capital Partners and Genstar Capital, will merge with Newport Group, a Walnut Creek, Calif.-based retirement services provider. Financial terms weren't disclosed.

- Arsenal Capital Partners acquired AvCarb Material Solutions, a Lowell, Mass.-based maker of carbon components for hydrogen fuel cells and electrolyzers. Financial terms weren't disclosed.

- ArchiMed acquired a majority stake in Cube Biotech, a German company focused on membrane protein samples. Financial terms weren't disclosed.

- Leonard Green & Partners acquired a stake in Parts Town, an Addison, Ill.-based distributor of OEM foodservice equipment parts, from Berkshire Partners. Berkshire will remain the majority shareholder. Financial terms weren't disclosed.

- Main Capital Partners acquired a majority stake in Zig Websoftware, a maker of software for housing corporations, student accommodation and commercial property management. Financial terms weren't disclosed.

- Rubicon Partners, Valtruis, a WCAS company, Oak HC/FT, and HLM Venture Partners acquired a majority stake in U.S. Medical Management, a Troy, Mich.-based home-care company, from Centene (NYSE: CNC).

- WindRose Health Investors will invest in Workplace Options, a Raleigh, N.C.-based mental health services provider. Financial terms weren't disclosed.

- Union Main Group invested in Echelon Energy, a Denver, Colo.-based electricity and water consumption reduction company. Financial terms weren't disclosed.

EXIT

- CMA CGM agreed to acquire a stake in Fenix Marine Services, a terminal in the Port of Los Angeles that provides container handling services to shipping lines, in a deal valuing it around $2.3 billion from EQT.

- Confluence Technologies, backed by Clearlake Capital Group and TA Associates, agreed to acquire Investment Metrics, a Norwalk, Conn.-based provider of investment data for $500 million. 

- H.I.G. Capital acquired BECO Holding Company, a Charlotte, N.C.-based distributor of critical fire and life safety management services, from Behrman Capital. Financial terms weren't disclosed.

- Ualá agreed to acquire ABC Capital, a Mexican bank. Financial terms weren't disclosed.

- KKR will acquire Bettcher Industries, a Birmingham, Oh.-based manufacturer and supplier of food processing equipment, from MPE Partners. Financial terms weren't disclosed.

- Berkshire Partners acquired a majority interest in Harvey Performance Company, a Rowley, Mass.-based designer and manufacturer of specialized cutting tools for precision machining applications, from Summit Partners. Financial terms weren't disclosed.

OTHER

- Scale AI acquired SiaSearch, a German data management platform. Financial terms weren't disclosed.

- BEDEO acquired Protean Electric from National Electric Vehicle Sweden, a subsidiary of Evergrande New Energy Vehicle Group. Financial terms weren't disclosed.

IPO

- Insilico Medicine, an artificial intelligence-powered drug discovery company in Hong Kong, filed confidentially for an IPO in the U.S. The offering could raise around $300 million for the company, per Bloomberg. Warburg Pincus backs the firm.

- Arhaus, a Boston Heights, Ohio-based home furnishing company, raised $168 million in an offering of 12.9 million shares priced at $13 per share—Shareholders and management had previously planned to sell an additional 10 million in shares, but did not sell any stock in the IPO, according to the company. The company reported $507 million in net revenue in 2020 and net and comprehensive income of $18 million. Freeman Spogli & Co. backs the firm.

- NerdWallet, a San Francisco-based personal finance education app, plans to raised $130.5 million in an offering of 7.3 million shares priced at $18 per share. The company posted $245 million in revenue in 2020 and net income of $5 million. Institutional Venture Partners, RRE Ventures, and iGlobe Partners back the firm.

- Cadre Holdings, a Jacksonville, Fla.-based security products company, raised $78 million in an offering of 6million shares priced at $13 per share. The company posted $404.6 million in net sales in 2020 and $38.5 million in net income.

- Samsara Vision, a Far Hills, New Jersey- based medical device company for individuals with late-stage retina conditions, filed for an IPO. The company reported a total comprehensive loss of $2.4 million in 2020 and didn’t generate revenue that year. Perella Weinberg Partners backs the firm.

SPAC

- TradeStation Group, a Plantation, Fla.-based retail brokerage, said it would go public via a merger with Quantum FinTech Acquisition Corp., a SPAC. A deal values the company at $1.4 billion.

F+FS

- Section 32 announced a $740 million fund focused on technology and healthcare.

- Mission BioCapital closed Fund V with $275 million

- Grayhawk Capital closed its third fund at $76 million. 

PEOPLE

- New Enterprise Associates added Michele Park as a partner based in its Menlo Park office. She was previously at Clarus Ventures.

- Trilantic North America promoted Ted Rosenwasser to partner.

- Crossbeam Venture Partners added Alex Notis as an investment associate. 

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