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Top News in the A.M.
Late last night, NASA‘s Juno spacecraft finally reached Jupiter, five years after the probe left Earth. More here.
The latest Yahoo offers are expected tomorrow, with the final round expected in two weeks. More here.
Why That Google Capital Deal Could Mean More PIPEs
Last Wednesday, Google Capital ventured into the world of investing in publicly traded companies, announcing it has backed Care.com, a platform that connects people with caregivers which went public in early 2014.
With Google Capital investing $46.35 million, it became Care.com’s single largest shareholder, according to The New York Times. The deal also sent nine-year-old Care.com’s shares soaring. On the day of the announcement, Care.com was valued at $278 million; by the end of trading on Friday, the company’s market cap had reached $508 million.
It might have seemed interesting, if unremarkable, to some industry watchers. Others, however, think the deal may well usher in a new era of private investment in publicly equities, or PIPE deals, despite their checkered history.
Those who’ve been around for a boom and bust (or two) are already familiar with them. PIPE deals became increasingly attractive in the aftermath of the late 1990s tech bubble, when the public market shut for tech companies, stranding not only ambitious startups hoping to IPO but publicly traded outfits, too.
Faced with few options, some of those cash-strapped companies turned to outside investors like venture investors and hedge funds. In return for capital, the companies typically provided their public shares at a discount — along with the promise that if their shares were to fall in value, these new investors would be provided more shares to make up for their losses.
In some cases, things worked out well. Phil Sanderson, today a managing director at IDG Ventures, was working as a partner at Walden Venture Capital at the time and says he led two investments in publicly traded companies that provided quick, meaningful returns to the firm. One of those bets was on VitalStream, a content delivery network that was later acquired; the other was the IT management company Niku, also acquired.
Sanderson says the two companies produced a “3x to 5 x return in a two- to three-year period,” and he credits those returns with approaching both firms with a VC-like mentality. “I’d join the board, bring in sales, help recruit employees. I would also communicate to analysts I knew about the company, and I’d be out there talking with hedge funds, getting them to buy and build positions in the stock. It was a lot of work but it paid off.”
Other companies weren’t so lucky.
Adents, a nine-year-old, Paris, France-based serialization and traceability software specialist, has raised €12 million ($13.4 million) in funding from earlier backers NAXICAP Partners, Omnes Capital and CapHorn Invest. More here.
Echobox, a three-year-old, London-based service that helps publishers better understand viral content and provides suggestions on which articles to share on social networks at specific times, has raised $3.4 million in new funding. The round was led by Mangrove Capital Partners, with participation from Saul and Robin Klein’s LocalGlobe. TechCrunch has more here.
HourlyNerd, a three-year-old, Boston, Ma.-based online platform that connects small businesses needing expertise with MBAs who can help them, has raised $22 million in Series C funding funding led by General Catalyst Partners, with participation from Highland Capital Partners, GE Ventures, Mark Cuban, Greylock Partners, and Bob Doris of Accanto Partners. The company has now raised $33 million altogether. More here.
Instabridge, a 3.5-year-old, Stockholm, Sweden-based Wi-Fi sharing community and mobile app, has raised $1 million in new funding led by Draper Associates, with participation from earlier backer Balderton Capital. TechCrunch has more here.
Natural Cycles, a three-year-old, Nordic startup that bills itself as a fertility tracking service, has raised $6 million in Series A funding led by Bonnier Media Growth, the venture arm of the Swedish media business. Earlier backers Sunstone and e.ventures also joined the round. The company has now raised $7.5 million altogether. TechCrunch has more here.
NightBalance, a six-year-old Delft, The Netherlands-based that makes a device that’s worn around the upper torso to address sleep apnea (it nudges wearers into different sleep positions in the night), has raised €12.5 million ($13.9 million) in Series B funding co-led by Inkef Capital and Gilde Healthcare Partners. Earlier backers Thuja Capital, Health Innovation Fund, and Van Herk Ventures also joined the round. More here.
NeoGrowth, a 5.5-year-old, Mumbai, India-based fintech startup, has raised $35 million in new funding co-led by IIFL Asset Management and earlier backer Accion Frontier Inclusion Fund. Other earlier backers, includingOmidyar Network, Aspada Investments, and Khosla Impact, also participated. Livemint has more here.
Network Locum, a five-year-old, London-based healthcare startup whose staffing platform and workplace management software targets the U.K.’s National Health Service (NHS), has raised $7 million in Series B funding led by BGF Ventures. TechCrunch has more here.
Foxconn, which assembles most of Apple’s iPhones, has filed for an IPO of its cable and connector unit in Hong Kong that could raise up to $1 billion. The WSJ has more here.
Richard Boyle has joined Canaan Partners as a partner. Boyle was previously chairman and CEO of LoopNet, before it was acquired several years ago.
Former Facebook employee Antonio García Martinez (who worked for the company for less than two years) has published a score-settling book dedicated to “all my enemies.” He reportedly compares Facebook’s oppressive work culture to North Korea.
The Chinese billionaire who wants to out-Tesla Tesla.
Twelve venture-backed IPOs raised $893.9 million in the second quarter of this year, says Thomson Reuters and the NVCA. That’s a 56 percent increase by dollars and a 100(!) percent increase by number of offerings compared with the first quarter. Nine of the quarter’s offerings were life sciences IPOs. Eleven were U.S.-based companies. More here.
Inside Alphabet’s money-spinning, terrorist-foiling, gigabit Wi-Fi kiosks.
Much to teenagers’ chagrin, Snapchat is catching on with the olds, says the WSJ.
Employers and start-ups are testing more ways to give employees faster access to their wages.
How to raise brilliant children, according to science.
Why ATMs at the bar or corner store could soon go away.
Cookies are coming.