Happy Monday, dear readers!
—–
Top News in the A.M.
Is Facebook buying Twitter? That’s what some are speculating now that the king of Twitter, investor (and Facebook board member) Marc Andreessen has saidsayonara for now to the platform.
Then again it could be Disney (buying Twitter). At least, the entertainment giant has reportedly discussed with bankers whether a deal makes sense.
Senator Mark Warner is calling for an SEC probe into that massive Yahoo hack.
—–
Fallen VC Ifty Ahmed Strikes Back at Former Employer, Claiming Self-Dealing
Owes HimIn May of last year, Ifty Ahmed was accused by federal regulators of conning his former employer — the venture capital firm, Oak Investment Partners — out of $65 million. Now, Ahmed suggests, Oak is doing the conning, and he says the stakes are even higher.
You might remember Ahmed’s sensational story. According to his former colleagues, Ahmed — who’d joined Oak in 2004 following short stints as a junior investor with both Goldman Sachs and Fidelity Ventures — began bilking the firm almost immediately. They say he doctored deal documents and faked invoices, among other ways he directed the Norwalk, Conn. firm’s monies into his own personal account.
The alleged fraud was discovered almost by accident. One month earlier, Ahmed, who lived with his wife and children in Greenwich, Conn., was arrested and criminally charged with insider trading. The reason: Federal prosecutors in Boston said Ahmed had conspired with longtime friend Amit Kanodia to profit from the planned acquisition of Cooper Tire & Rubber Co. by India-based Apollo Tyres, making $1 million from the deal before it was publicly announced. (Kanodia’s wife was Apollo’s general counsel at the time.)
In a civil lawsuit filed against Ahmed at the time (May 2015), the SEC identified at least nine companies in which Ahmed allegedly manipulated Oak investments for his personal gain, the most egregious of which appeared to be a Hong Kong-based online retailer. According to the SEC, in December 2014, Ahmed convinced his partners to write a $20 million check for a stake in the company when, in reality, it was buying a $2 million stake. Ahmed pocketed the rest, says the SEC.
With his name in the headlines, Ahmed fled to India, where he was quickly arrested by local authorities for entering the country illegally on an expired passport. (He surrendered his U.S. and Indian passports to U.S. authorities when he was charged with insider training.) In the meantime, the SEC froze all his assets, including his brokerage accounts, his investments in Oak’s funds and various properties, such as a home in Greenwich, and two Park Avenue apartments in New York.
Now Ahmed, who remains in India — he tells us he’s been prevented from returning to the U.S. by Indian authorities who’ve confiscated all of his documents — is trying to wage a battle of his own. To wit, earlier this month, he filed a motion in a U.S. District Court petitioning the SEC to include all of his “untainted assets currently held by Oak” and to direct them into a “joint untainted frozen bank account.”
According to Ahmed’s legal filing, these assets include four direct forms of investment and investment-related economic interests associated with his employment with Oak, including carried interest in four funds (Oak Investment Partners X, XI, XII and XIII), in which he says he was significantly vested. Specifically, Ahmed says that when he was terminated from Oak on May 18, 2015, he was fully vested in his Fund X; 91 percent vested in Fund XI; 83 percent vested in the carry of Fund XII; and 54 percent vested in Fund XIII’s carry.
“With very conservative assumptions, the total value of [Ahmed’s] carried interest across these funds is material and significant — easily in the $60 million range even with very conservative assumptions,” states his motion.
—–
New Fundings
Estify, a four-year-old, L.A.-based company that’s developed a new tool for auto repair businesses to better gauge the cost of its services for insurance claims, has raised $6.3 million in new funding led by Romulus Capital, with participation from ff Venture Capital. TechCrunch has more here.
Flexport, a 3.5-year-old, San Francisco-based freight forwarding company and data provider, has raised $65 million in Series B funding from Eight Partners, along with previous investors Founders Fund, Bloomberg Beta, Felicis Ventures, First Round Capital, Susa Ventures, and Yuri Milner.
FreshDirect, a 14-year-old, Long Island, N.Y.-based popular online grocery service on the East Coast, has raised $189 million in new funding led by J.P. Morgan Asset Management, with participation from W Capital and AARP Innovation Fund. TechCrunch has more here.
Inverse, a year-old, New York and San Francisco-based digital media startup geared towards millennial men, has raised $6 million in Series A funding led by Crosslink Capital with participation from Bertelsmann Digital Media Investments, Social Starts, Bialla Venture Partners, and Vast Ventures. The company has now raised $8 million altogether. TechCrunch has more here.
MemberSuite, a eight-year-old, Atlanta, Ga.-based maker of customizable association management software, has raised $11 million in Series B funding led by Revolution Ventures. Additional investors included Fidelis Partners, Angel Investment Management, Accomplice Partners, and Alerion Ventures. More here.
TheSkimm, a four-year-old, New York-based publisher of a popular e-newsletter aimed at young women, has tacked on $500,000 in funding onto an earlier $8 million round led by 21st Century Fox. The new capital comes from the New York Times; Yannick Bolloré, the CEO of French media conglomerate Havas; media advisory firm MediaLink; and actress Mariska Hargitay. Recode has more here.
Podium Data, a two-year-old, Lowell, Ma.-based data lake management platform, has raised $9.5 million in Series A funding led by Malibu Ventures. SiliconAngle has more here.
Skyhigh Networks, a five-year-old, Campbell, Ca.-based cloud security startup, has raised $40 million in new venture capital funding, bringing its total outside investment to over $105 million. Thomvest Partners led the Series D round and was joined by return backers Greylock Partners and Sequoia Capital. Fortune has more here.
—–
New Funds
Aleph, a three-year-old, Israeli early-stage venture capital firm, has closed its second fund with $180 million in capital commitments. It had closed its debut fund with $150 million. GeekTime has more here.
Canvas Ventures, a Portola Valley, Ca.-based early-stage venture firm, has closed its second fund with $300 million. That’s a meaningful step up from the $175 million debut effort of the firm, which was cofounded in 2013 by former Morgenthaler Ventures partners Gary Little, Rebecca Lynn and Gary Morgenthaler. TechCrunch has more here.
FTV Capital, an 18-year-old, San Francisco and New York-based growth equity investment firm, has closed its fifth fund with $850 million. The firm plans to continue its focus on funding high-growth companies with $10 million to $100 million in revenue (and 20 percent year-over-year revenue growth). VentureBeat has more here.
—–
Exits
AppLovin, a 4.5-year-old, San Francisco-based mobile ad tech company backed by just $4 million in angel funding, has sold a majority stake in its business to the Chinese private equity firm Orient Hontai Capital at an enterprise value of $1.42 billion. Fortune has more here.
Publicly traded CA Technologies is spending an undisclosed amount to acquire BlazeMeter, an Israel-based provider of continuous application performance testing software. Blazemeter had raised around $7 million from investors, including YL Ventures, Glilot Capital Partners, Flint Capital andWestern Technology Investment. More here.
CBOE Holdings, operator of the Chicago Board Options Exchange, has agreed to acquire Bats Global Markets, the U.S.’s third largest exchange, which went public earlier this year. The price: $3.2 billion in cash and stock. Bats shareholders include TA Associates, which holds a 21 percent stake. MarketWatch has more here.
—–
Essential Reads
Harvard Management Company lost almost $2 billion in endowment value during a “disappointing” fiscal year 2016, posting its worst endowment returns since the nadir of the financial crisis and marking the latest in a string of underwhelming investment results for the world’s largest university endowment.More here.
A look at the hopes and anticipated headaches of Snapchat’s new glasses.
—–
Detours
Debate tonight! Woot! In the meantime, plenty of politicians dodge questions; see if you can decode these answers from Donald Trump and Hillary Clinton.
—–
Retail Therapy
BB-8 desk lamps. Beeps and boops not included.