Friday! Pheeeww. Hope you have a wonderful summer weekend, everyone!
Top News in the A.M.
Benchmark, a major Uber shareholder, filed a lawsuit against recently ousted CEO Travis Kalanick yesterday in a remarkable move that may be unprecedented in Silicon Valley. Axios has the full lawsuit here. We’ve got some thoughts of our own below.
Shares of Snap have plunged 13 percent so far today — to a new low — after the company reported worse-than-expected second quarter results. More here.
SoundCloud just closed the necessary funding round to keep the struggling music service afloat. More here.
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What Was Benchmark Thinking?
Yesterday, Benchmark, the powerful venture firm and a major Uber shareholder, filed a lawsuit against the company’s recently ousted CEO Travis Kalanick in a remarkable move. The suit seeks to remove Kalanick from the board, while eliminating three additional board positions that it says Kalanick sought (and won) approval for last year, partly by withholding crucial information from the board.
The central issue: When Kalanick resigned as CEO, he also resigned from his board seat, but he quickly re-appointed himself to one of those outstanding and “fraudulently procured” seats, says Benchmark. It now alleges that Kalanick ultimately hopes to “pack the board to facilitate his desired re-appointment as Uber’s CEO,” and it aims to stop that maneuver.
The suit casts Kalanick in a highly unflattering light yet again. But if I were an investor in Benchmark’s funds, I’d be just as furious with the venture firm. What was Benchmark thinking, giving Kalanick three new board seats and carte blanche to do with them whatever he liked? It’s beyond belief that the firm wasn’t acutely aware of Kalanick’s management style a year ago when it agreed to this crummy deal. It had front row seats into what was happening at the company — not to mention unfettered access to the endless media coverage that Uber’s controversial corporate culture has received since its initial launch in San Francisco. A February blog post by former Uber engineer Susan Fowler may have set off the chain of events leading to this moment, but nothing new transpired between last year and this year other than intensified media scrutiny combined with growing public outrage.
“It feels a little to me like they painted themselves into a corner, and now they’re crying about it,” says succession expert Jeff Cohn of Benchmark’s lawsuit. “It was poor and unusual governance practice, and now it’s come back to bite them.” Adds Cohn, “There was always doubt around Kalanick’s style.”
We reached out to Benchmark earlier this morning. The firm hasn’t responded to our request as of this writing.
Despite the unprecedented nature of the suit — Benchmark has been sued in the past by a former portfolio company but has never sued one of them, as far as we know — it isn’t surprising, looking back at the last decade or so.
New Fundings
AMP Americas, a six-year-old, Chicago-based company that turns cow manure into trucking fuel, has raised $47 million in funding from EIV Capital. The Chicago Tribune has more here.
Coinbase, the five-year-old, San Francisco-based cryptocurrency exchange, has raised $100 million in Series D funding at a $1.5 billion pre-money valuation led by Institutional Venture Partners. Other participants in the round include Spark Capital, Greylock Partners, Battery Ventures, Section 32 and Draper Associates. TechCrunch has more here.
Flyspaces, a two-year-old, Manila, Phillippines-based startup operating as a kind of Airbnb for office space rentals, has raised $2.1 million from Net Group co-president Raymond Rufin, along with other, unnamed players in the retail space. TechCrunch has more here.
Toutiao, a five-year-old, Beijing-based Chinese news aggregator, is reportedly raising around $2 billion at a valuation north of $20 billion, possibly led by General Atlantic. The company’s earlier backers include Sequoia Capital China and CCB International. Reuters has more here.
New Funds
HighBar Partners, a 22-year-old, Menlo Park, Ca.-based venture firm that was originally cofounded by Sun Microsystems co-founders Bill Joy and Andy Bechtolsheim, and which focuses on SaaS, enterprise software and infrastructure software, has closed its third fund with $208 million in capital commitments. More here.
Exits
India-based messaging app Hike has acquired Creo, a three-year-old, Bangalore-based hardware company that previously released smartphones, streaming devices and an operating system. According to Crunchbase, Creo had raised $3 million from investors, including Sequoia Capital, BEENEXT, and India Quotient. Hike has meanwhile raised at least $261 million, including from Tiger Global Management. Terms of the deal aren’t being disclosed. More here.
PayPal is acquiring Swift Financial, a 12-year-old, Wilmington, Del.-based company that extends credit to small businesses through loans and advances. No financial terms were disclosed. Swift Financial raised an undisclosed amount of venture funding, including from Village Ventures and Sutter Hill Ventures. More here.
WeWork has acquired Unomy, a five-year-old, Tel Aviv, Israel-based maker of sales and marketing intelligence software, for undisclosed terms. According to Crunchbase, Unomy had raised more than $2.4 million in seed funding, including from Janvest Capital Partners. TechCrunch has more here.
People
Uber SVP of Global Operations Ryan Graves will be leaving that full-time senior leadership role in the middle of September to “focus” on his role as a director of Uber’s board. More here.
In the last couple of days, a story lifted from Ashlee Vance’s biography of Elon Musk has been making the rounds on the internet, claiming that Musk fired his assistant of 12 years when she wanted a raise. Musk is now saying it’s “total nonsense.” More here.
Essential Reads
Google CEO Sundar Pichai canceled a much-anticipated meeting to talk about gender issues yesterday after some of its employees expressed concern over online harassment they had begun to receive.
Amazon is reportedly exploring a refrigeration-free prepared-meal technology for home delivery.
Detours
The death and life of helicopter commuting.
The key to day drinking like a pro.
Nine scandalous royal romances you may have forgotten about!
Retail Therapy
Eek.