Jun 22, 2017

Axios Pro Rata

Surge Stuff

The Uber saga continued yesterday, with the resignation of Benchmark partner Bill Gurley from the company's board of directors. He'll be replaced by Matt Cohler who, alongside fellow Benchmarker Peter Fenton, actually negotiated Travis Kalanick's resignation on Tuesday night — namely because Gurley and Kalanick are no longer on speaking terms. In fact, a source says that Kalanick requested Gurley step down so that the board can be more functional going forward (remember, Travis remains a director).

I know many of you are sick of Uber by now, so I promise not to address it in tomorrow's Pro Rata. But until then...

  • Money: Kalanick obviously isn't hurting, with sources saying that he's received multi-million dollar performance bonuses in each of the past few years. But remember that he's never sold a single share of Uber stock, so he still has a strong financial incentive to help maintain value (versus trying to burn down the house). Moreover, almost everyone I've spoken with believes that his continued board presence is vital to the company's future success.
  • Partners: Multiple sources say that the relationship between Kalanick and Arianna Huffington became problematically close, with Kalanick not really speaking to any other directors between the time he took a leave of absence and Tuesday's investor revolt. In short, Kalanick isolated himself with Huffington as buffer — and other directors were ticked off by tangential things like this NY Times puff piece on Huffington (which they viewed as being primarily about personal brand promotion).
  • Speaking of which: There was a ridiculous NY Post story yesterday suggesting that Huffington was leading the CEO search, via her advocacy for Sheryl Sandberg. To be sure, most everyone at Uber would kill for Sandberg to take the role, but Huffington isn't in any particular charge of recruiting (a role really led by Gurley, who was expected to remain involved). Just to prove the point, that same story later suggests Huffington nemesis Tim Armstrong as a candidate. No way she's recruiting him (nor do I think he's a serious candidate, given the upcoming Yahoo integration that he spearheaded at AOL).
  • Timeline: It is important to note that Kalanick's behavior and choices in the time between taking leave and Tuesday were determinative for many of the revolting investors, although specifics remain hard to come by. But know this: Had Kalanick just taken a couple of weeks at the beach with his phone turned off, he's probably still CEO.
  • Other moves: TPG's David Trujillo will take that firm's board seat, following the resignation of David Bonderman over sexist statements made at last week's all-hands. Worth noting that TPG didn't sign the investor letter on Tuesday, although it was considered to be generally supportive of the effort (seems the letter's specific language was at issue).
  • CEO candidates? Here are some options.
  • Counterpoint: Conventional wisdom is that Kalanick's resignation is a win for Silicon Valley women, but not everyone agrees. Check out this Facebook post from Uber product manager Margaret-Ann Seger: "I'm angry, sad, flustered, confused, but mostly just heartbroken."
  • Reconsidering: Prior to Kalanick's resignation, I wrote a piece questioning whether Uber's board should have hired Eric Holder in the first place. Not whether it needed to investigate sexual harassment claims or that it needed cultural changes -- but rather if the Holder investigation structure was the best way to proceed. Read it here.

The White House today will host a group of tech execs and VCs for sessions on emerging technologies, including drones and the Internet of Things. There also will be a session on increasing investment activities in U.S. regions outside of traditional VC hotbeds like Silicon Valley and the Northeast. David McCabe has a curtain-raiser, including a list of expected attendees.

  • On his way: One of those going is Steve Case, who tells me that he hopes to convince Trump and his team to "focus a little less on revitalizing manufacturing and bring back jobs of the past, and more on encouraging entrepreneurship and creating jobs of the future." Case believes the White House can support such efforts via tax reform, including by supporting the Investing in Opportunity Act (bipartisan co-sponsored by Sens. Booker and Cook). As for the risk of today's meeting being more about a photo opp for Trump than a consequential exchange of ideas: "My experience having done this for three decades across Administrations is that it's better to engage, to be in the room."
  • But: Case also planned to advocate for the International Entrepreneur Rule to remain in place, but word came last night that Trump plans to effectively kill it (something we previously reported would happen, although he's using a different mechanism). Click that second link to learn the difference between the IER and Startup Visa (which remains in congressional limbo), or just know this: Trump wants amazing, high-paying jobs for Americans. But not if the price is accepting extra immigrants.

Diageo (LSE: DGE) has agreed to acquire Manhasset, N.Y.-based tequila maker Casamigos for upwards of $1 billion, including a $700 million upfront payment and upwards of $300 million in milestone payments.

  • Why it's the BFD: This is a reflection of rising global demand for tequila and, in particular, high-end brands. In fact, sales for the "super-premium" category represented by Casamigos have climbed more than 700% since 2002. Plus: Casamigos was co-founded by George Clooney, and I know we all were really hoping that guy could finally get a win.
  • Bottom line: "Diageo already owns the Don Julio brand. But the company's executives argued that they could take Casamigos to even greater heights by selling it beyond American shores." — Michael de la Merced
Venture Capital Deals

• Farfetch, a London-based online luxury fashion marketplace, has raised $397 million in new funding from JD.com (Nasdaq: JD). Fartech previously raised around $360 million in VC funding from firms like Index Ventures. http://tcrn.ch/2st8yoE

🚑 Repare Therapeutics, a developer of precision oncology drugs with offices in Montreal and Cambridge, Mass., has raised $68 million in Series A funding. Versant Ventures and MPM Capital co-led the round, and were joined by Fonds de solidarité FTQ and BDC Capital. http://bit.ly/2rFRkBs

• Blockchain, a London-based bitcoin wallet company, has raised $40 million in Series B funding. Lakestar led the round, and was joined by GV, Nokota Management, Digital Currency Group and return backers Lightspeed Venture Partners, Mosaic Venture Partners, Prudence Holdings, and Richard Branson. http://read.bi/2rYC0zt

• Samsara, a San Francisco-based provider of connected sensors for fleet management, has raised $40 million in Series C funding at a post-money valuation north of $530 million. General Catalyst led the round, and was joined by return baker Andreessen Horowitz. http://tcrn.ch/2rBTD8M

• Yello, a Chicago-based provider of recruiting software, has raised $31 million in Series C funding. JMI Equity led the round, and was joined by return backer First Analysis. http://bit.ly/2twX81o

• Dafengshou, a Chinese e-commerce site for agricultural products, has raised $29 million in Series B funding. Orchid Asia Group and China Growth Capital co-led the round, and were joined by Matrix Partners China. http://bit.ly/2twYQQI

• Sequent, a Santa Clara, Calif.-based provider of tokenization services, has raised $16 million in Series C funding. Japan's TIS led the round, and was joined by return backers Opus Capital Partners, SBT Ventures and Jado Investments. www.sequent.com

• Celtra, a Boston-based creative management platform for digital advertising, has raised $15 million in VC funding co-led by Unilever Ventures and WPP. http://bit.ly/2twFIC4

• Pearl Capital Business Funding, a New York-based provider of direct financing to small and midsize businesses, has secured $15 million in financing from Atlanta-based Chatham Capital. http://bit.ly/2sTVGZ7

• Rinse, a San Francisco-based dry cleaning and laundry service, has raised $14 million in Series B funding. Partech Ventures led the round, and was joined by return backers Javelin Ventures, Arena Ventures, Accelerator Ventures and Structure Capital. http://tcrn.ch/2tNRK9C

• Pillow, an automated platform for managing short-term apartment rentals, has raised $13.5 million in Series A funding. Mayfield led the round, and was joined by Sterling Equity, Peak Capital Partners, Expansion VC and individuals like Chris Anderson (TED Talks) and Gary Vaynerchuck. http://tcrn.ch/2ttIfNA

• Nuvolo, a Jersey City, N.J.-based cloud-based enterprise asset management company, has raised $10 million in Series A funding. GE Ventures led the round, and was joined by seed backers NEA and ServiceNow Ventures. www.nuvolo.com

• Deliver (f.k.a. iCanDeliver), a Russia-based freight transport ordering platform, has raised $8 million in seed funding from Inventure Partners, A&NN Group and Amereus Group. http://tcrn.ch/2sXcO0A

• ComparaGuru, a Mexican online financial management platform for insurance and banking products, has raised $7 million in Series A funding. QED Investors led the round, and was joined by Peter Thiel, Struck Ventures and return backers Nova Founders Capital and Seaya Ventures. http://bit.ly/2tRwQ9O

• Hubdoc, a Toronto-based startup that automates financial document collection and processing, has raised nearly C$5 million in seed funding. BDC IT Venture Fund and Round13 Capital co-led the round, and were joined by Hyde Park Venture Partners. http://bit.ly/2rZ5Weu

• Aproplan, a Brussels-based provider of construction site management software, has raised €5 million in Series A funding. Fortino Capital led the round, and was joined by return backers like Inventures and Matexi. http://tcrn.ch/2sWRVD1

• Fuzic, a Fishers, Ind.-based music marketing startup, has raised $3 million in seed funding from High Alpha, Allos Ventures and Hyde Park Venture Partners. http://bit.ly/2sXeZSh

• TrueLayer, a London-based provider of access to bank APIs, has raised $3 million in Series A funding. Anthemis Group led the round, and was joined by return backer Connect Ventures. http://bit.ly/2sEMeXr

• Growbots, a San Francisco-based provider of outbound sales automation solutions, has raised $2.5 million in new VC funding from backers like Buran VC and Lighter Capital. http://tcrn.ch/2tOifvF

🚑 Iconovo, a Swedish developer of drug inhalers, has raised €2.3 million in new VC funding from undisclosed investors. http://bit.ly/2rUcnVn

• Cake, a social conversation platform organized around topics, has raised $2.2 million in seed funding, per an SEC filing. www.cake.co

• Petasense, a San Jose, Calif.-based industrial IoT startup focused on machine vibrations, has raised $1.8 million in seed funding. True Ventures led the round, and was joined by Felicis Ventures. http://tcrn.ch/2sSWzSG

Private Equity Deals

🚑 Consolidated Services Group, a Lansdale, Penn.-based provider of medical claims management services, has raised an undisclosed amount of private equity funding from Excellere Partners. www.csg-inc.net

• Lynx Equity has acquired G&W Commercial Interiors, a Seattle-based provider of commercial flooring and related services. No financial terms were disclosed. www.gwcfloor.com

• Sycamore Partners is nearing an agreement to acquire office supplies retailer Staples (Nasdaq: SPLS) for more than $6 billion, according to Reuters. Staples previously rejected a bid from Cerberus Capital Management. http://reut.rs/2rXGE0r

• True Wind Capital has agreed to acquire ARI Network Services (Nasdaq: ARIS), a Milwaukee-based provider of SaaS sales tools for equipment manufacturers, distributors and dealers. The deal is valued at around $140 million in cash, or $7.10 per share. http://bit.ly/2rUTMZc

Public Offerings

• Altice USA, the U.S. unit of Amsterdam-listed broadband giant Altice NV, raised $1.9 billion in its IPO. The company pried 63.9 million shares at $30 per share (within $27-$31 range), for an initial market cap of around $22 billion It will trade on the NYSE under ticker symbol ATUS, while J.P. Morgan was listed as left-lead underwriter. It reports a $656 million net loss on more than $9 billion in pro forma revenue for 2016. http://cnb.cx/2sEHukC

• Vencore, a Chantilly, Va.-based provider of IT and consulting services to U.S. government customers, has filed for a $250 million IPO. It plans to trade on the NYSE under ticker symbol VNCR, with Goldman Sachs and Wells Fargo serving as lead underwriters. The company reports $1 million of net income on around $1.17 billion in revenue for 2016, and is owned by Veritas Capital. http://on.mktw.net/2sS1frl

Liquidity Events

• Kinderhook Industries has sold Dispensing Dynamics, a City of Industry, Calif.-based maker of plastic injection molded paper towel and soap dispensers, to Hunter Industries. No financial terms were disclosed. www.dispensingdynamics.com

More M&A

• Berkshire Hathaway has agreed to acquire around a 20% stake in Home Capital Group (TSX: HCG), a Canadian alternative mortgage lender, via its Columbia Insurance Co. subsidiary for around C$153 million. Earlier reports were that both Brookfield Asset Management and Onex Corp. had made preliminary takeover offers for Home Capital. http://bit.ly/2rV5EdD

• Imagination Technologies (LSE: IMG), a British maker of graphics chips, is seeking a buyer. The move comes after Apple announced it would stop purchasing product from Imagination Technologies, causing the latter's stock to crater 70%. Its current market cap is south of £350 million. http://reut.rs/2tx0aTw

• Mytaxi, a European ride-hail company owned by Daimler, has agreed to acquire Romanian rival Clever Taxi for an undisclosed amount. http://nyti.ms/2sEuVGg

• Standard Life (LSE: SL) received British antitrust approval for its proposed £11 billion purchase of Aberdeen Asset Management (LSE: ADN). http://bbc.in/2twBoml


• CITIC Capital Partners has closed a new China-focused private equity fund with $1.57 billion in capital commitments. The firm continues to raise a parallel, RMB-denominated fund targeting RMB3 billion (US$439m). http://bit.ly/2sEDbGf

• Highland Capital Partners is raising up to $300 million for its tenth VC fund, per an SEC filing. www.hcp.com

It's Personnel

• Gustaf Alstromer, a former Airbnb executive, has joined Y Combinator as a partner. http://tcrn.ch/2tu7RKm

• Ken Elefant has stepped down as a managing director with Intel Capital to join Utah-based private equity firm Sorenson Capital as head of a new early-stage VC unit based in Palo Alto. https://bloom.bg/2tOENfR

• Sara Zulkosky has joined Greenspring Associates as a venture partner. She previously was a principal with CNF Investments. www.greenspringassociates.com

Final Numbers