ARMED WITH DATA
Good morning, Term Sheet readers.
Reddit co-founder Alexis Ohanian announced Wednesday that he would be stepping down from his daily role at the company (he will continue to serve on Reddit’s board).
Ohanian said he will return to Initialized Capital, an early-stage VC firm he co-founded with Garry Tan, as a full-time general partner. The firm has more than $250 million in assets under management, and its investments include Coinbase, Instacart, Zenefits, Opendoor, Soylent, and Cruise Automation.
Now, he plans to double down on investment opportunities in emerging technologies such as blockchain, and says the firm will participate in upcoming initial coin offerings.
“The threat that ICOs pose long-term are to VC firms that aren’t very good because the onus will be on investors to justify why founders should take their money and not use other ways to get it,” he told Term Sheet. “We’re up for that challenge.”
How do they plan to do this? Ohanian says his focus for 2018 is to roll out software that will automate some investment decisions. This may also increase deal flow diversity and help founders gain access to the firm’s network more efficiently.
“It’s a challenge for all of venture,” he said about investing in non-white-male founders. “We have to get it right. Believe me, I used to think about this before I had a black daughter, and I really think about this now on another level because it’s so personal to me.”
As we’ve seen with Social Capital’s “capital-as-a-service” platform, diversity improves when human bias is taken out of investment decision-making. For context, Social Capital evaluated nearly 3,000 companies during its private beta and committed to funding several dozen across 12 countries. CEO demographics skewed 42% female and majority non-white.
Though Ohanian wasn’t familiar with Social Capital’s data-focused investment platform, his response to the findings was, “Hell yeah.” So why aren't more firms fully embracing the data?
“It’s ironic because venture capital firms talk about investing in founders who are building the future and replacing file cabinets with software and yet venture is so technologically backwards,” he said. “That’s because very, very few people running these firms are product people.”
It looks like data-driven venture investing will only accelerate in the future. It remains to be seen how well quantitative recommendations are accepted in a world of big personalities and a strong belief in “the pickers.”
WOMEN IN VENTURE: As Floodgate’s Ann Miura-Ko told Term Sheet yesterday, “I know for a fact there’s a ton of announcements coming out relatively soon about women being recruited into venture firms.” On Wednesday, it was announced that Naomi Pilosof Ionita joined Menlo Ventures as an investing partner and Liza Landsman is leaving her role as president of Jet.com to join New Enterprise Associates as an investor.
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• Winklevoss Twins Say Bitcoin Will Hit $320,000 and Non-Believers Suffer a 'Failure of Imagination' (by David Meyer)
• Steve Wynn Could Resign With a $300 Million Bonus (by Jen Wieczner)
VENTURE DEALS
• Ionic Materials, a Woburn, Mass.-based raised $65 million in Series C funding. Investors include Bill Joy and Alliance Ventures.
• Icertis, a Bellevue, Wash.-based provider of enterprise contract management in the cloud, raised $50 million in Series D funding. Meritech Capital Partners led the round, and was joined by investors including PSP Growth and Cross Creek Advisors. Existing investors B Capital Group, Ignition Partners, Greycroft and Eight Roads Ventures participated.
• Zenflow Inc, a South San Francisco-based medical device company, raised $31.4 million in Series A funding. Invus Opportunities, F-Prime Capital Partners and Medical Technology Venture Partners led the round.
• Agrinos, a Norway-based biological crop input provider, raised $14.7 million in funding. Investors include Manor Investment SA, Havfonn AS and EuroChem Group AG.
• Yoshi, a San Francisco-based subscription service provider for on-site car maintenance and gas delivery, raised $13.7 million in Series A funding. General Motors Ventures and ExxonMobil led the round, and were joined by investors including Y Combinator.
• Attentive, a personalized mobile messaging platform for ecommerce and retail businesses, raised $13 million in Series A funding. Investors include Bain Capital Ventures, Eniac Ventures and NextView Ventures.
• Human Interest, a San Francisco-based provider of retirement savings plans for small business employers and employees, raised $11 million Series A round of funding. Wing Venture Capital led the round, and was joined by investors including Adam Nash and Wealthfront.
• Autobooks, a Detroit-based provider of integrated invoicing, payment and accounting software for online banking platforms, raised $10 million in funding. Investors include Draper Triangle, Baird Capital, Detroit Venture Partners, Invest Michigan and CU Solutions Group.
• ParentPowered, a creator of a text messaging application for parents of newborns to third graders, raised $2.65 million in seed funding. Omidyar Network led the round, and was joined by investors including Valhalla Charitable Foundation, The Richard E. And Nancy P. Marriott Foundation, and Heising-Simons Foundation.
• BurnAlong, a Baltimore-based fitness startup, raised $1 million in funding. Investors include Brown Advisory, Baltimore Angels, Machem Capital and Johns Hopkins University. Read more.
• LVMH Luxury Ventures made an investment of an undisclosed amount in Stadium Goods, a New York-based sneaker and apparel marketplace.
HEALTH AND LIFE SCIENCES DEALS
• Rani Therapeutics, a San Jose, Calif.-based developer of a pill designed to replace injectable drug delivery for patients suffering from chronic diseases, raised $53 million in funding. Investors include GeneScience Pharmaceuticals, Shire, Bossa Ventures, and Cathay Venture, Inc.
• Appili Therapeutics Inc, a Halifax, Nova Scotia-based developer of anti-infective drugs, raised more than $4.3 million in funding. Investors include Innovacorp.
PRIVATE EQUITY DEALS
• Ardian has acquired a stake in SFAM, a European broker of smartphone and multimedia insurance. Financial terms weren't disclosed.
• Rock Hill Capital Group recapitalized LeBlanc Marine LLC, a New Iberia, La.-based provider of marine construction, barge and tug services and material offloading services along the Gulf Coast. Financial terms weren't disclosed.
• Jefferson Dental Care, a portfolio company of Brentwood Associates, acquired The Smile Center, a San Antonio, Texas-based provider of dental practices in San Antonio, Texas. Financial terms weren't disclosed.
• Air Filtration Holdings The Edgewater Funds, and Duchossois Capital Management acquired RoboVent, a Sterling Heights, Mich.-based provider of industrial ventilation and filtration solutions.
OTHER DEALS
• Alyssum Group acquired RocketRoute, a U.K.-based aviation services company. Financial terms weren't disclosed.
• Capgemini acquired LiquidHub, a Wayne, Penn.-based IT and business-staffing and consulting firm, for approximately $500 million. Read more.
• BitPesa acquired TransferZero, a Spain-based online money transfer platform. Financial terms weren't disclosed.
IPOs
• Cactus, a Houston oil and gas firm, said it raised $437 million in an IPO of 23 million shares priced at $19 in an upsized IPO. Citi, Credit Suisse and Simmons & Co. Are joint bookrunners in the deal. Cactus plans to list on the NYSE as “WHD.”
• Mudrick Capital Acquisition, a New York City-based blank check company formed to acquire a post-bankruptcy business, said it raised $200 million in an IPO of 20 million units priced at $10 a piece. Jason Mudrick formed the firm. Cantor Fitzgerald is bookrunner in the deal. The company plans to list on the Nasdaq as “MUDS.U.”
• Victory Capital Holdings, a Brooklyn, Ohio-based asset management firm, said it raised $152 million in an offering of 11.7 million shares at $13, below its previously stated $17 to $19 range. Crestview GP and Reverence Capital Partners back the company. J.P. Morgan, BofA Merrill Lynch, Morgan Stanley, Barclays, Goldman Sachs and RBC Capital Markets are joint bookrunners inn the deaI. The firm plans to list on the Nasdaq as “VCTR.”
• Huami, a Hefei, China-based maker of wearable devices maker, raised $110 million in an IPO of 10 million shares priced at $11—the midpoint of its $10 to $12 range. Credit Suisse, Citi and China Renaissance are joint bookrunners in the deal. It plans to list on the Nasdaq as “HMI.”
• AT&T, the Dallas-based telecom giant, filed confidentially for an IPO of its minority stake in DirecTV Latin America. Read more.
EXITS
• Houzz Inc acquired IvyMark, a New York-based provider of business management software for interior design firms. Financial terms weren't disclosed. IvyMark had raised approximately $2.9 million in funding from investors including Pitango Venture Capital, NFX and Disruptive VC.
• CloudBees acquired CodeShip, a Boston-based provider of continuous integration and delivery products in the cloud. Financial terms weren't disclosed. CloudBees had raised approximately $11.4 million in venture funding from investors including Matrix Partners, Lightspeed Venture Partners and Verizon Ventures.
• Omnicom Health Group acquired Snow Companies, a Williamsburg, Va.-based patient engagement agency, from WestView Capital Partners. Financial terms weren't disclosed.
• Cerberus Capital Management agreed to acquire Cyanco, a Pearland, Texas-based producer of sodium cyanide, from Oaktree Capital Management LP. Financial terms weren't disclosed.
FIRMS + FUNDS
• Blackstone (NYSE:BX) raised more than $5.5 billion for its second Asia real estate fund, according to an SEC filing.
• Edmond De Rothschild Investment Partners, the Paris-based investment arm of Edmond de Rothschild, raised 345 million euros ($430 million) for its fifth European biotech and medical device venture fund.
• TrueBridge Capital Partners, a Chapel Hill, N.C.-based $450 million for its fifth venture capital fund-of-funds.
• NBK Capital Partners, the Dubai-based private equity and real estate investment arm of Watani Investment Company, raised $75 million for its real estate fund.
PEOPLE
• HealthpointCapital has named Milen Todorov as managing director. Todorov is a former medical technology investment banker at UBS Investment Bank.
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Polina Marinova produces Term Sheet, and Lucinda Shen compiles the IPO news. Send deal announcements to Polina here and IPO news to Lucinda here.
