Hello! Happy Monday, everyone, and welcome back.:)
Top News in the A.M.
The pharmaceutical giant Pfizer said this morning it has struck a $160 billion deal, including debt, to merge with Allergan, the maker of Botox, in one of the biggest takeovers in the health care industry. Dealbook has more here.
A New Way to Fund Unicorns Starts to Look Less Magical
If you haven’t heard of a fairly new twist on investing called special purpose vehicles (SPVs), you probably aren’t an institutional investor or a wealthy individual with direct ties to either a venture firm or a high-flying startup like Pinterest or Postmates.
But don’t worry if you’ve missed the opportunity to invest in one. Investors may find they weren’t worth the risk if valuations of so-called unicorns — some given “haircuts” recently by their mutual fund investors — start to slip more broadly.
The vehicles – essentially pop-up venture firms that come together quickly to make an investment in a single company – began surfacing around 2011, leading up to Facebook’s IPO, and they’ve been on the rise since. In April, the Wall Street Journal reported on several low-flying SPVs that have been used to connect investors with high-profile, still-private companies like the data analytics company Palantir Technologies and the grocery -delivery outfit Instacart.
Another company that has raised money via numerous SPVs is the digital scrapbooking company Pinterest. When it set out to raise more than $500 million earlier this year, the venture firm FirstMark Capital raised a $200 million for a SPV to help fund it. In 2014, Pinterest separately raised $131.1 million through two SPVs organized as Palma Investments by SV Angel, the seed-stage fund founded by renowned investor Ron Conway.
It’s no wonder that investors are drawn to the vehicles. In the case of Facebook, early access to the company produced big dividends for investors. Investor Chris Sacca similarly amassed an outsize stake in Twitter for investors Rizvi Traverse and J.P. Morgan by creating SPVs that paid off. (How richly depends on when they began cashing out. As of late September, Rizvi Traverse had sold more than 10 percent of the 15.6 percent of Twitter it owned at the time of its November 2013 IPO. Twitter’s shares peaked in January of 2014 at $69 per share; they’re now trading at roughly $26 apiece.)
Whether investors in newer SPVs will see such rewards remains a question mark – and there a lot of investors in newer SPVs.
Airbnb, the seven-year-old, San Francisco-based online marketplace for people to list and rent places to stay, has raised more than $100 million in a new round of funding that continues to value the company at $25.5 billion. The WSJ, which reported the news late Friday, did not include investor names.
Arcstone, a two-year-old, Singapore-based data analytics company that caters to manufacturing plants, has raised an undisclosed amount of funding (its first round) led by the Tokyo-based venture firm Global Brain. Other participants in the round include Wavemaker Partners, 500 Startups, and YSS Capital. Tech in Asia has more here.
BAROnova, a nine-year-old, Goleta, Ca.-based medical tech company that’s developing devices to treat obesity, has raise $36.5 million in Series D funding co-led by Delos Capital and Longitude Capital. Earlier backers Lumira Capital Partners, ONSET Ventures and Sante Ventures also joined the round. More here.
ColorChip, a 14-year-old, Caesarea, Israel-based company that makes dense, hyper-scale transceivers and advanced optical splitters, has raised $25 million in funding led by Israel Growth Partners, with participation from Vintage Investment Partners and previous backers Gemini Israeli Funds and BRM Group. TechCrunch has more here.
HealthCrowd, a four-year-old, San Mateo, Ca.-based healthcare-focused mobile messaging platform, has raised $2.1 million in seed funding from investors that include Startup Capital Ventures, Herlitz Capital, Healthy Ventures, Band of Angels, Berkeley Angel Network, and 37 Angels. More here.
Le Tote, a three-year-old, San Francisco-based service that allows women to rent everyday clothing and accessories, has raised $15 million in Series B funding led by AITV, with participation from Azure Capital, Epic Ventures, Funders Club, Lerer Hippeau Ventures and Simon Venture Group. More here.
MindTickle, a four-year-old, San Francisco-based sales productivity platform, has raised $12.5 million in Series A funding from New Enterprise Associatesand earlier backer Accel Partners. Venture Capital Dispatch has more here.
PatientPop, a year-old, Santa Monica, Ca.-based digital health startup whose office management platform helps physician practices understand how they’re reaching patients, has raised $10 million from Toba Capital. MedCity News hasmore here.
Quizlet, a nearly nine-year-old, San Francisco-based company whose site offers shared learning tools from students worldwide, has raised $12 million in Series A funding from Union Square Ventures, Costanoa Venture Capital, Altos Ventures and Owl Ventures. Venture Capital Dispatch has more here.
Ruby Ribbon, a four-year-old, Burlingame, Ca.-based fashion e-commerce company that makes and markets apparel, has raised $7.5 million in Series C funding co-led by DBL Partners and Direct Selling Capital, with participation from earlier backers Trinity Ventures and Mohr Davidow Ventures. More here.
SportPursuit, a four-year-old, London-based flash sales site for outdoor and sports gear, has raised £9.5 million ($10 million) in Series C funding fromScottish Equity Partners, Grafton Capital, and earlier backer Draper Esprit. TechCrunch has more here.
Early Friday, we sat down with GGV Capital’s Glenn Solomon about his firm’s investment in Square, the hoopla surrounding its IPO, and why more tech companies are likely to go public soon — whether they want to or not. (Video.)
LexisNexis has just acquired Lex Machina, a six-year-old, Menlo Park, Ca.-based company that provides intellectual property litigation data and predictive analytics to companies, law firms, consultants and other users. Terms of the deal aren’t being disclosed. Lex Machina had raised around $10 million from investors, including Costanoa Venture Capital, XSeed Capital, and entrepreneur-investor Joe Lonsdale.
Amazon Studios has tapped film music vet Bob Bowen as its head of music. Bowen most recently served as head of music for Relativity Media.
DCInno profiles Clara Sieg, Revolution Ventures’s youngest partners and one of just two firm representatives in San Francisco.
Dave Tabors, who joined Battery Ventures 20 years ago, says he’s taking a break from venture capital and will not be investing from the firm’s eleventh fund.
On Friday, Facebook CEO Mark Zuckerberg announced on Facebook that he’s taking two months of paternity leave once his daughter is born.
Applied Ventures, the venture arm of Applied Materials, is looking to hire an investment associate. The job is in Santa Clara, Ca.
Why today’s tech companies have accepted lobbying as an essential part of doing business.
A longer look at Flipagram, Instagram’s “rising rival.”
Uber will see you now.
The toddler who threw a tantrum in front of the president.
A provocative teaser for the sixth season of “Game of Thrones.”
The Thanksgiving miracle.
A sleeping bag that looks like a bear. That is all.