August 04, 2017

Greetings from Manhattan, where I'm in a hotel situated between the Port Authority and a 99-cent per slice pizza joint (startup life is super glamorous). Great seeing some of you in Brooklyn last night at the 1776 event. Here we go...

Top of the Morning

• Tardy trade war: Today's expected White House statement on Chinese IP theft and forced tech transfer has been delayed, and it's now unclear if we'll hear anything before the President's vacation ends the week of August 21. Word is that the hold-up isn't about policy, but rather about PR (i.e., it's harder to make a big splash on a Friday in August).

Chinese regulators, meanwhile, are cracking down further on cross-border M&A, per Reuters:

"China plans to further tighten the screws on overseas acquisitions by Chinese companies and borrowing to fund those transactions, and has started closely scrutinizing the commercial aspects of the deals, three people familiar with the move said... asking companies looking to buy assets overseas to justify terms, including target valuations, deal premiums and financing arrangements."

• Sand Hill Moving Co: Yesterday we were first to report that Mamoon Hamid is leaving Social Capital, the venture firm he co-founded in 2011, to join Kleiner Perkins Caufield & Byers.

  • History: KPCB and Social Capital held failed merger talks in late 2014, while Hamid first got to know KPCB partner Ted Schlein while working with his father Phil more than a decade ago when they both worked at U.S. Venture Partners.
  • Hamid tells Axios: "Social Capital is building an amazing company focused on how you solve the world's hardest problems using technology but, to do that, it needs more of a multi-investment strategy. That's why it already has a hedge fund and is developing other products. As a venture investor, I wanted to stay focused."

• New-nicorn: Auris Surgical Robotics today announced that it has raised $280 million in new VC funding. Sources say that the pre-money valuation was around $1 billion. Coatue Management led, and was joined by return backers like Lux Capital, Mithril Capital Management and Highland Capital Partners.

As its name suggests, the stealthy California startup makes robots that assist in surgical procedures (here's a speculative story from last summer). CEO Fred Moll today said that the company's initial disease target will be lung cancer:

"The reason lung cancer is so deadly is that the diagnostic and treatment processes are ineffective. The majority of lung cancer patients are diagnosed in late stage, when the cancer has already spread beyond its primary location. With our technology, physicians will be able to access early stage lung cancer without incisions, allowing accurate diagnosis and targeted treatment."

• It's a spectacle: Business Insider reports that Google offered around $30 billion to buy Snap in early 2016, and also reengaged closer to the IPO process.

I've heard the same talk, although it's worth noting that all of my sourcing has come from the Snap side (which adds around a $40 billion price for the more recent approach). Not saying it's untrue – buying Snap makes lots of sense for Google – but just that Googlers point out that $30 billion would represent around one-third of the company's cash on hand. The bigger issue for Snap shareholders, however, is that Google's interest reminds them that Evan Spiegel holds all the votes, and may never have a financial incentive to sell (given that he's independently wealthy and Snap CEO is the only job he's ever really held).

• Winner winner, (organic, cage-free) chicken dinner: Congrats to SimpliFi, a startup focused on helping users pay off student loans, which last night won the 1776 Challenge Cup competition in Brooklyn. Now it moves on to the global finals.


GrubHub (NYSE: GRUB) has agreed to acquire food-ordering service Eat24 from Yelp (NYSE: YELP) for $287.5 million, adding 15,000 restaurants to its 55,000 restaurant base. GrubHub also signed a 5-year deal that enables it to receive food orders through Yelp listings, and also signed a strategic partnership with Groupon (Nasdaq: GRPN).

  • Why it's the BFD: For starters, this is a strong return for Yelp, which paid just $134 million for Eat24 in early 2015. That's probably why its stock soared on the news and GrubHub's slumped. But, in the long-run, the deal should give GrubHub some added buffer against burgeoning rivals Amazon and Uber.
  • Bottom line: "Grubhub's delivery dominance in the U.S. is rivaled only by Domino's, the ubiquitous pizza chain. As of last summer, Grubhub commanded a 23% slice of the digital ordering and delivery market compared to Domino's 24%, according to research from Morgan Stanley." – Alison Griswold, Quartz

Venture Capital Deals

• Bread, a New York-based provider of white-label consumer financing solutions for retailers, has raised $126 million in Series B equity and debt funding. Menlo Ventures led the equity tranche, and was joined by firms like Bessemer Venture Partners and RRE Ventures. Victory Park Capital provided the debt facility.

🚑 Homology Medicines, a Bedford, Mass.-based gene editing startup, has raised $83.5 million in Series B funding. Deerfield Management led the round, and was joined by Fidelity, HBM Healthcare Investments, Maverick Ventures, Novartis, Rock Springs Capital, Vida Ventures, Vivo Capital, Alexandria Venture Investments and return backers 5AM Ventures, ARCH Venture Partners and Temasek.

• Sugarfina, an Inglewood, Calif.-based luxury confections brand, has raised $35 million in growth equity funding from Great Hill Partners.

• rfXcel, a San Rafael, Calif.-based provider of "track and trace" regulatory compliance solutions, has raised $30 million in new VC funding led by Kayne Partners.

• GuardiCore, an Israel-based provider of internal data center and cloud security solutions, has raised $15 million in new Series B funding. TPG Growth led the extension, and was joined by affiliate Greenfield Partners.

• Gobee Bike, a Hong Kong-based bike-sharing company, has raised $9 million in Series A funding. Grishin Robotics led the round, and was joined by Alibaba Entrepreneurs Fund.

• Keemotion, a Brooklyn-based provider of automated video technology for sports teams and leagues, has raised $3.6 million in Series A funding. Elysian Park Ventures led the round, and was joined by Guggenheim Baseball Management, R/GA Ve3ntures, Interpublic Group, GO4IT Investments from Brazil, Pincus Capital Management and former NBA Commissioner David Stern.

• Botmetric, a Santa Clara, Calif.-based cloud services optimization platform for digital businesses, has raised $3 million in Series A funding led by Blume Ventures.

• TuSimple, a Beijing-based developer of autonomous truck technology, has raised an undisclosed amount of Series B funding led by Nvidia (Nasdaq: NVDA).

Private Equity Deals

The Blackstone Group and CVC Capital Partners have agreed to acquire British payments company Paysafe (LSE: PAYS) for £3 billion (LSE: PAYS). This comes just a week after Paysafe news agreed to purchase Texas-based Merchants' Choice Payments for $470 million, and amidst the ongoing Vantiv negotiations to buy Paysafe rival WorldPay.

• Gatekeeper Systems, an Irvine, Calif.-based portfolio of Hammond Kennedy Whitney & Co., has acquired Carttec, a German distributor of cart containment and loss prevention solutions. No financial terms were disclosed.

🚑 Prezio Health, a Troy, Mich.-based medical instrument repair and management company backed by Frazier Healthcare Partners, has acquired Glen Allen, Va.-based Northfield Medical from Prairie Capital. No financial terms were disclosed.

• Viscolube, an Italian used motor oil recycling company owned by Stirling Square Capital Partners, has acquired Bitolea, an Italian company focused on treating and recycling chemical wastes, from Clessidra. No financial terms were disclosed.

Public Offerings

• Elio Motors, a Phoenix-based developer of three-wheeled vehicles, has filed for a $100 million IPO. It currently is traded on the OTC, but plans to relist on the Nasdaq under ticker symbol ELIO, with Drexel Alexander serving as sole underwriter.

Liquidity Events

🚑 Bristol-Myers Squibb (NYSE: BMY) have agreed to acquire IFM Therapeutics, a Cambridge, Mass.-based developer of small molecules targeting the innate immune system, for upwards of $1.3 billion (including $300m upfront in cash). IFM raised $27 million in Series A funding last summer from Atlas Venture, Abingworth and Novartis.

• Vista Equity Partners has agreed to sell the communities and sports divisions of Active Network to Global Payments (NYSE: GPN), for approximately $1.2 billion in cash and stock (50/50 split). Vista will retain Active's outdoor division.

More M&A

⛽ Dover Corp. (NYSE: DOV) is exploring strategic options for its energy business, which could garner between $3 billion and $4 billion in a sale, according to the WSJ.

• Japan Tobacco (Tokyo: 2914) has agreed to acquire PT Karyadibya Mahardhika and PT Surya Mustika Nusantara, Indonesian makers of "kretek" tobacco and clove cigarettes, for a combined $677 million.

• J&F Investimentos has agreed to sell Brazilian dairy company Vigor Alimentos to Mexico's Grupo Lala for around $1.8 billion.

• Sapporo Holdings of Japan has agreed to acquire Anchor Brewing Co., the San Francisco brewer of Anchor Steam beer, for around $85 million.

🚑 Shire (LSEL: SHP) said that it is considering a spin-off of its ADHD drug business.


Southfield Capital, a Greenwich, Conn.-based lower middle-market private equity firm, has closed its second fund with around $200 million in capital commitments.

It's Personnel

• Stephen Bolze has joined The Blackstone Group's new infrastructure unit as a senior managing director and head of portfolio operations and asset management. He previously was president and CEO of General Electric's power business.

• Cesar Gueikian has joined Monroe Capital as a managing director and co-portfolio manager for a new special situations credit strategy. He previously was founder of Melody Capital Partners.

• Anne-Marie Peterson has joined Baird's investment banking group as a managing director of global debt advisory. She previously was with KeyBanc Capital Markets.

• The Rhoatyn Group has promoted Roberto Chute to partner, leading Latin America private equity activities. He joined the firm's Buenos Aires office in 2006, before which was with BofA Equity Partners Latin America.