It is May, people! Can you believe it? Hope you have a great, spring-y weekend in store.:) (Pst, web visitors, here’s an easier-to-read version of this morning’s email.)
Top News in the A.M.
Spotify has just raised roughly $350 million in a new round of fundraising that values it at a stunning $8 billion.
TPG Growth’s Bill McGlashan: We’re No Stranger to Startups
Bill McGlashan would like you to know something. TPG Growth is no newcomer to startups. The 45-person group that McGlashan leads within 22-year-old TPG Capital hasn’t just been writing checks to startups since 1999, but it has incubated a number of companies, too (including, last year, the film studio STX Entertainment). “I think there’s been a lot of noise lately about PE getting into growth investments, which is a function of absolute check sizes getting so large . . .. but [investing in privately held companies] is part of what we do and have done for a very long time. This isn’t private equity now doing growth. This is what we’ve always done.”
We talked Wednesday with McGlashan about how TPG Growth works, why the typically private firm is talking with the press suddenly, and how it plans to raise the giant, $3 billion fund it announced earlier this week. Our chat has been edited for length.
How old is TPG Growth, how many funds has it raised, and how does it differentiate itself from the broader company?
We raised a $500 million venture fund in 1999. It was one of the largest-ever first time funds and the team went happily off to do VC, which seemed like a good idea in 1999. In 2000, which is when the fund actually closed, things were obviously challenging from a macro perspective. So I came aboard in 2003 to rethink the strategy. With the second half of that fund, we took a different approach [that was more integrated with the rest of the firm], and we’ve maintained it through three subsequent growth funds.
What’s your overarching approach?
We want to do investments where our $67 billion platform can be a uniquely compelling partner in delivering growth, and that can mean different things depending on the industry and stage of the business and the nature of the company . . . so we’re agnostic about sectors and geographies. The problem with consumer funds or geography-specific funds is that everything a hammer sees is a nail, and we couldn’t do what we do if we had hammer/nail syndrome.
How many companies a year do you fund, and who works in your group? Can you describe the hierarchy for us?
We [typically fund] 10 or 15 companies a year where we can [accelerate the business]… There are nine partners in the group and each [focuses on] a combination of sector and geography. We also have a range of senior advisors that can be deeply involved. Then we have principals, VPs, associates, [as well as access to a] whole, 90-person operating team [at TPG], whose head of human capital [Fred Paulenich] was [senior VP of HR] at Walmart and Levi Strauss [previously].
So when we go into a company like [famed guitar maker] Fender [in which TPG Growth took a majority stake in early 2013], we’re fixing the core business, including improving the sales organization, but we’re also embarking on a digital strategy, thinking of e-learning and collaboration, and focusing on direct-to-consumer engagement. Even though it’s a $700 million revenue business, it doesn’t have leadership that could go on this journey alone, so we can plug in people who can accelerate that change, and we do the same with all our companies.
Who makes the ultimate decisions on these investments?<
There about about 30 partners across TPG and 8 managing partners [and from that group] there’s an investment committee [that includes members of TPG Growth]. We don’t have several wizards who are pushing a red or green button. [Firm cofounders David] Bonderman and [James] Coulter and other senior partners are [involved in all the] decisions. It’s important because if you’re an entrepreneur and we’re investing $50 million, we want you to know the firm cares as much about your company as it does with a $1 billion investment.
How long does it take for a yes or no?
We don’t make bets, write a check and hope it all works out. We’re signing up for being held accountable as a partner who will deliver value, and that takes real time. There are [some deals] when we move quickly and get deals done in a month. Sometimes, we spend six months getting to know each other. Time isn’t usually the gating issue. We do real work. It can’t happen with tummy rub.
For more with McGlashan, including news about TPG Growth’s SurveyMonkey investment, continue reading here.
Anacail, a four-year-old, Glasgow, Scotland-based company whose technology temporarily turns some of the oxygen inside sealed packaging into ozone, an effective germicide (that can, say, extend the life of packaged foods or sterilize medical devices), has raised £2m ($1.5 million) in Series A funding from Sussex Place Ventures, along with earlier backers IP Group and the Scottish Investment Bank.
Bebaio, a months-old, Boston, Ma.-based software startup targeting the connected-home market, has raised $1.5 million in seed funding from undisclosed backers. More here.
Clearent, a 10-year-old, Clayton, Mo.-based payment processing company, has raised $25 million from FTV Capital. You can learn more about the company here.
Descartes Labs — a Los Alamos, N.M.-based deep-learning image analysis startup that was was incubated in Los Alamos National Labs for seven years before spinning out, has raised $3.3 million in funding. Among its investors: Venky Harinarayan, a founder of Kosmix, which was acquired and turned into Walmart Labs. TechCrunch has the story here.
Dmall, a young, Beijing, China-based hyperlocal shopping app founded by longtime Huawei executive Liu Jiangfeng, has reportedly raised a whopping $100 million in angel funding, which would make it the largest angel round ever in China, reports Tech In Asia. More here.
Dopay, a nearly two-year-old, London-based company whose cloud-based payroll service can be used to calculate and remit salaries electronically to employees who don’t have bank accounts, has raised $2 million in seed funding, including from ACE & Company, Techstars Ventures, and a syndicate of other investors.
Edgemont Pharamaceuticals, a nine-year-old Austin, Tex.-based maker of psychatric drug therapies, has raised $5 million more in debt from Oxford Finance, from which the company already has a $10 million senior secured term loan. The company says it already has two FDA-approved antidepressant products in the U.S. and a Phase III product candidate that’s being developed for generalized anxiety disorder.
Foodpanda, the three-year-old, Berlin, Germany-based food delivery juggernaut, has raised $100 million in fresh funding led by Goldman Sachs, with Rocket Internet — which incubated the company — among other earlier backers to participate in the round. The new funding comes less than two months after Foodpanda raised a separate, $110 million round led by Rocket Internet. The company has now raised $310 million altogether. TechCrunch has more here.
Flybits, a 2.5-year-old, Toronto, Canada-based SaaS startup that helps consumer-focused companies expand and manage their mobile offerings, has raised $4.75 million in Series A funding led by Vodafone Ventures, Robert Bosch Venture Capital and Trellis Capital. TechVibes has more here.
InDinero, a six-year-old, San Francisco-based company whose software helps small businesses with unlimited, flat-fee accounting, tax and payroll services, has received a line of credit (of undisclosed size) from lender SaaS Capital.
Kiana Analytics, a two-year-old, Sunnyvale, Ca.-based location-based marketing company, say it has raised more than $1 million from Plug and Play Ventures, Sand Hill Angels, Hawaii Angels and several individual investors.
Let’s Recycle, a three-year-old, Ahmedabad, India-based waste management and recycling startup, has raised $2 million in Series B funding led by social venture fund Aavishkaar. Tech-Portal has more here.
Mirna Therapeutics, an Austin, Tex.-based clinical-stage biopharmaceutical company that’s developing cancer therapeutics, has raised $41.8 million in Series D funding led by Baxter Ventures, with participation from Eastern Capital, Santé Ventures, Morningside Ventures, Rock Springs Capital, and Celgene Corporation. Earlier backers, including Sofinnova Ventures, New Enterprise Associates, Pfizer Ventures, Osage University Partners, and Correlation Ventures, also joined the round. According to Crunchbase, the company has raised at least $82.8 million to date.
Payzer, a three-year-old, Charlotte, N.C.-based mobile payment tool, has raised $4.2 million in Series A funding led by Grotech Ventures and Route 66 Ventures. More here.
Rapid Micro Biosystems, a nine-year-old, Bedford, Ma.-based company whose machines detect microbial contamination in manufacturing, pharmaceutical, biotechnology and other fields, has raised $25 million in Series C funding from Hepalink USA, Richard K. Mellon and Sons, Kleiner Perkins Caufield & Byers, Longitude Capital, Quaker Partners, TPG Biotech, and TVM Capital. According to Crunchbase, the company has now raised roughly $100 million altogether.
Signpost, a five-year-old, New York-based maker of CRM software for business-to-consumer companies, has raised $20.5 million in funding led by Georgian Partners, with participation from Spark Capital, OpenView Venture Partners, Scout Ventures and the Launch Fund. The company has now raised $36.6 million altogether, shows Crunchbase.
Sirrus, a six-year-old, Cincinnati, Oh.-based company whose platforms serve as a foundation for next-generation adhesive, sealant, coating, ink and plastic products, has raised $6.5 million in Series B funding along with a previously announced $5 million in debt financing. The round was co-led by Braemar Energy Ventures and GM Ventures, with participation from earlier backers Arsenal Venture Partners and Mitsui Global Investments.
Smartvue Corporation, a 17-year-old, Nashville, Tn.-based video surveillance technology company, has raised $15 million in Series B funding, including from funds managed by affiliates of Fortress Investment Group. The company has now raised at least $20.9 million altogether, shows Crunchbase.
Synergis Education, a four-year-old, Mesa Az.-based company that provides outsourced education and technology services for colleges and universities, has raised an undisclosed amount of funding from media giant Bertelsmann.
Vuru, a five-year-old, San Mateo, Ca.-based free advanced stock analysis platform, has raised $1 million in seed funding led by Tim Draper, with participation from serial entrepreneurs Naveen Jain (InfoSpace, Intelius, Moon Express) and Sony Mordechai (Global Eye Investments).
Acceleprise Ventures, a three-year-old San Francisco-based incubator focused on enterprise startups, has announced a new, $3.5 million fund. More here.
Longwood Fund, a seven-year-old, Boston-based health-care firm, is looking to raise up to $90 million for a third fund, shows an SEC filing that states the first sale has yet to occur.According to Thomson Reuters data, the firm raised $66.7 million for its previous fund, which closed last year, and $86.9 million for its debut fund in 2010.
Shoreline Venture Management, a 17-year-old, San Francisco and San Mateo, Ca.-based venture firm focused on seed-stage and early-stage healthcare and software deals, is also looking to raise a third fund, according to an SEC filing that shows it has so far raised $3.9 million from 19 investors.
The Western Growers trade group in Salinas, Ca., is raising a $4 million venture fund. (A skeptic might call this the jump-the-shark moment. But not us!)
There have been 49 U.S. IPOs priced so far this year, a -51 percent change from last year, says Renaissance Capital.
Circa, a 3.5-year-old, San Francisco-based maker of a mobile news app by the same name, is seeking a buyer after failing to secure a new round of venture capital funding,reports Fortune. Circa has raised $5.7 million from investors, shows Crunchbase, including Quotidian Ventures, Menlo Ventures, Fenox Venture Capital, and Lerer Hippeau Ventures.
Grooveshark, an eight-year-old, Gainesville, Fla.-based music streaming service, has shut down roughly eight months after a U.S. District Court judge found that its employees had violated copyright infringement laws. The company had raised at least $4.6 million in venture and debt financing, shows Crunchbase. TechCrunch has more here.
Mark Greenbaum has joined the Palo Alto, Ca.-based investment bank Luma Partners as a partner. Greenbaum had previously spent more than 11 years with the investment bank GCA Savvian. (H/T: Dan Primack.)
How filmmaker George Lucas‘s bid to build a museum in San Francisco’s Presidio misfired. (One Presidio Trust staffer reportedly described the proposed building as “Empire meets [“Gone With the Wind”] meets Snow White.”
The NVCA’s annual VentureScape conference is coming up next Wednesday and Thursdayin San Francisco.
StrictlyVC’s May 13 event is now pretty much sold to capacity, but if you live in or near the Bay Area, you might want to check out this on-demand economy conference on May 19. (We’ll be there to moderate one panel toward the end of the day.)
Lyft is spending an awful lot to compete with Uber, per a document leaked to Bloomberg that shows the company spends a combined $530 on marketing to each driver and 22 passengers in San Francisco, and that it takes about nine months to recoup those costs.
The crazy new tech that explains why Microsoft bought Minecraft.
Rich parents agree: $63 million to too much inheritance (but $26 million isn’t enough).