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Top News
The group behind the ransomware that took down one of U.S.'s biggest pipeline operators late last week wants everyone to know that it is "apolitical" and that its goal is to make money, not to create "problems for society." The target, Colonial Pipeline, supplies fully 45% of the East Coast's fuel; the attack was a "vivid demonstration of the vulnerability of energy infrastructure to cyberattacks," observes the New York Times.
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Is Buying and Selling Sh0rt Positions in Pre-IPO Stock Next? This Fintech is Banking On It
Even the most sanguine industry observer has to be stunned at times by the pace of dealmaking right now. Not quite halfway through 2021, startups are routinely closing new rounds just months apart and sometimes seeing their valuations triple and even quadruple with every new round.
Maybe they will all become trillion-dollar companies. It's more likely, however, that they will not, which is where year-old Caplight comes in. Led by Javier Avalos, a former investment banker who recently spent more than three years with the secondaries platform Forge, Caplight is developing tech to enable institutional investors to take long and short private company positions via synthetic, cash-settled derivatives, so whether or not they own any actual shares in certain startups, they can bet on their rise or fall.
Caplight isn't the first company drawn to the idea. Another young startup in New York, Apeira Capital, is also looking to "short" overvalued startups. More, Avalos and his cofounder, Justin Moore, a former engineering manager at Forge, could also face competition, from their old firm, for example, as well as Carta, the venture-backed company that makes software to manage equity stakes in other startups.
Still, Avalos thinks he's on to something. Caplight already has $400 million worth of interest from more than 30 institutions, he says. It also just closed on $1.7 million in pre-seed funding led by Fin VC, with participation from Susquehanna Private Equity Investments, Clocktower Ventures, and Dash Fund. We talked with him late last week to learn more; below are excerpts from that chat, edited lightly for length (or you can hear our fuller conversation here).
You were at Forge, which helps people buy and sell pre-IPO shares. What opportunity did you see while working there?
I think what platforms like Forge have done really well is build tech solutions for startup employees, for startup founders, and for the companies themselves, and that's great. What we're really focused on are larger institutions that need true liquidity, meaning higher frequency of trading, whether that's buying and selling option contracts, or entering swap-type agreements. [They need a way] to quickly move in and out of positions, as well as hedge themselves.
Caplight [aims to become the] infrastructure that enables any other fund that is looking to take directional positions in private companies. It's meant to be the plumbing that connects that fund to a market -- not just the marketplace but all of the infrastructure that comes with that. So holding assets in prime brokerage; being able to quickly settle transactions through clearinghouses; being able to provide [the] data to inform a mark to market to value those contracts.
Even more specifically, what are you offering?
We want to allow institutional investors to hedge their private company stock -- to generate income on their private company stock by selling out-of-the-money option contracts, for instance. We also allow institutional investors to take short or long positions [and] we're doing all of our transactions synthetically, so the underlying shares don't don't actually have to move.
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Massive Fundings
Forge Global, the eight-year-old, San Francisco-based private securities marketplace, has closed a new financing round with $150 million, bringing the company's total funding to date to $250 million. Backers in the new round include Temasek, Wells Fargo Strategic Capital, LUN Partners Group, earlier backer Deutsche Börse, and others. CNBC has more here.
Gojek, the 11-year-old, Jakarta, Indonesia-based ride-hail and payments company, has raised $300 million in fresh funding from Telkomsel, a unit of Indonesia’s largest telecom operator, Telkom. The announcement comes as Gojek, which has now raised $3.45 billion altogether, works to close a merger deal with e-commerce platform Tokopedia, an $18 billion tie-up that would reportedly result in a new entity called GoTo. TechCrunch has more here.
Kin, a 4.5-year-old, Chicago-based direct-to-consumer home insurance startup, has raised $63.9 million in Series C funding in a round that brings its total funding to roughly $116 million. Senator Investment Group and Hudson Structured Capital Management led the new found, joined by the University of Chicago through its Startup Investment Program, Allegis NL Capital, and Alpha Edison. Crunchbase News has more here.
Laronde, a four-year-old, Cambridge, Ma.-based developer of circular RNA solutions, has raised $50 million from Flagship Pioneering, which had incubated the company out Flagship Labs. FierceBiotech has more here.
StuDocu, a nearly eight-year-old, Amsterdam-based platform for sourcing and sharing class notes, has raised $50 million in Series B funding from Partech. TechCrunch has more here.
Big-But-Not-Crazy-Big Fundings
Babel Finance, a three-year-old, Hong Kong-, Beijing- and Singapore-based crypto asset manager, has raised $40 million in Series A funding. Lead investors include Zoo Capital, Sequoia Capital China, Dragonfly Capital, Bertelsmann and its Asian fund BAI Capital, and Tiger Global Management. TechCrunch has more here.
Blind, a 7.5-year-old, Berkeley, Ca.-based professional social network and chat platform, has raised $37 million in Series C funding. Mainstreet Investment of South Korea led the round, joined by Cisco Investments and Pavilion Capital, a subsidiary of Singapore sovereign wealth fund Temasek. The company has now raised a little less than $60 million altogether. TechCrunch has more here.
FinLync, a 2.5-year-old, New York-based company whose native treasury apps promise corporate treasuries and finance professionals uninterruptible connections to all of their banks, has raised $16 million in funding led by Point72 Ventures. Other participants in the round include Nyca Partners, former Palantir CFO Colin Anderson, and Plaid cofounder William Hockey. More here.
Smol, a three-year-old, London-based company that makes sustainable home-care products like dissolvable laundry detergent capsules, has raised $34 million in Series B funding. Eight Roads led the round, joined by GV, Latitude and earlier investors Balderton Capital and Jam Jar. Tech.eu has more here.
Smaller Fundings
Just Women’s Sports, a year-old, L.A.-based media platform exclusively focused on women’s sports, raised $3.5 million in seed funding. Will Ventures led, joined by Thirty Five Ventures, Drive by DraftKings, OVO Fund and Supernode Global. Business Insider has more here.
Not-Saying-How-Much Fundings
MAËLYS, a four-year-old, New York-based direct-to-consumer brand that makes body sculpting cosmetics and creams, has raised an undisclosed amount of funding from Norwest in exchange for a minority stake in its business. More here.
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New Funds
Abingworth, the 48-year-old, London-based private equity and venture capital firm, has raised $582 million for its second clinical co-development fund. The fund, ACCD 2, equips Abingworth to make triple-digit million investments in late-stage clinical programs, says FierceBiotech. More here.
Monta Vista Capital, a seven-year-old, Burlingame, Ca.-based venture firm focused on early-stage B2B startups, is raising $40 million for its third fund, according to an SEC filing. More here.
Safar Partners, a two-year-old, Boston-based seed- to growth-stage venture fund investing primarily in tech companies out of MIT, Harvard, and the University of Rochester, has garnered at least $191 million in capital commitments from nearly 100 investors for its debut fund, shows an SEC filing. More here.
Sixty8 Capital, a two-year-old, Indianapolis, In.-based outfit that says it is the first Indiana-based venture firm dedicated to investing in Black, brown, women, LGBTQ+ and disabled founders, has launched a $20 million fund. The fund’s investors include The Indiana Next Level Fund, 50 South Capital, Bank of America, Eli Lilly and Company, First Internet Bank, and the Central Indiana Community Foundation. Paul Ehlinger from Allos Ventures, another regional firm, has also signed on as a venture partner. TechCrunch has more here.
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Going Public
In March, OpenAI CEO Sam Altman joined forces with veteran Wall Street dealmaker Michael Klein (formerly of Citibank) to raise up to $1 billion for a blank-check firm, but they're now scaling back that plan, according to Renaissance Capital. According to the outlet, their SPAC, which originally filed to offer 100 units at $10, is now offering 40 million shares at $10 (to raise $400 million). It's also now offering shares only. It previously planned to offer units containing one share of common stock and one-sixth of a warrant, exercisable at $11.50.
Bird, the four-year-old, Santa Monica, Ca.-based electric scooter company, is reportedly planning to go public via a reverse merger with the blank-check company Switchback II Corporation, a Dallas, Tex.-based SPAC company focusing on companies reducing carbon emissions. According to dot.LA, Switchback "has been marketing a $200 million PIPE offering in recent weeks that allows investors to buy shares of Bird at the IPO price" and the transaction will value Bird at $2.3 billion, below the $2.85 billion valuation it was assigned early last year, before the pandemic struck the U.S. More here.
Flipkart, the 14-year-old, Bangalore, India-based e-commerce giant, is embarking on plans to $1 billion at up to $30 billion valuation in a pre-IPO financing round, reports TechCrunch. More here.
A self-driving truck startup, Plus, says going public via SPAC will help it build commercial-scale production as it seeks new orders. The planned listing -- it's merging with Hennessy Capital Investment Corp. V -- and TuSimple’s recent IP "follow a shakeout period in the autonomous trucking sector, where companies need large amounts of capital to develop technology that is several years out from mass commercial deployment," notes the WSJ. More here.
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People
Alex Banker, director of investments at Yale's $31.2 billion endowment, has been named as interim chief investment officer, following David Swensen’s death last week. Banker joined the Yale Investments Office in 1997. More here.
Jeff Bezos is right now having a $500 million, 417-foot-long superyacht with several decks built in the Netherlands, along with a support yacht with a helipad, reports Bloomberg in a piece about soaring demand for extravagantly high-end yachts.
In news you know will get uglier: The split between Bill and Melinda Gates, announced last week, has been in the works for a long time, the WSJ is reporting, saying that Melinda Gates began consulting with divorce lawyers two years ago and that one concern of hers was her husband’s dealings with convicted sex offender Jeffrey Epstein. According to the WSJ, a former employee of the couple's charity has said Gates’s concerns about Epstein date as far back as 2013. More here.
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Data
Last week, activist investor Starboard delivered a public letter rebuking Box for what it perceives as underperformance. Now Starboard, which owns 8% of Box stock, says it wants to take over four additional board seats.
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Essential Reads
Pretty much no one wants a younger kids' version of Instagram other than Facebook.
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Detours
NBC says it won't broadcast the Golden Globes next year.
Driving sounds by Hans Zimmer.
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Retail Therapy
The dramatic backstory behind one very special pair of, um, shorts.
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