IPO
This week’s activity in the public markets was headlined by the stock market debut of Synchrony Financial, GE’s consumer finance arm divested as a separate, public entity. Synchrony finances private label retail credit cards for customers such as Amazon, J.C. Penny and Wal-Mart. The company raised $2.88 billion, selling 125 million shares at $23 apiece – the largest IPO of the year so far. The company’s post-IPO valuation is around $20 billion. Trading started on the New York Stock Exchange Thursday, with the the stock retreating back to its $23 initial share price by the end of the day. Goldman Sachs, JP Morgan, Citigroup, Morgan Stanley, Barclays, BAML, Credit Suisse, and Deutsche Bank all served as underwriters.
Domestic turmoil has not prevented Mobileye from moving forward with its IPO. The Jerusalem-based company priced its shares at $25 to the tune of a $5.31 billion valuation, making it the biggest U.S. IPO ever by an Israeli firm. Mobileye develops on-board Driving Assistance Systems for the prevention of car accidents, and counts Audi, BMW, GM, Volvo, and Tesla as partners. There are also reports that Mobileye and Tesla are working together to develop a driverless car.
Rumors circulated Monday that Xero, a cloud-based accounting service out of New Zealand, might go public in the U.S. in 2015. Xero customers are currently only 1% of the North American market, but U.S. CEO Peter Karpas believes that the $2 billion company has a “better product” than market leader Intuit, where Karpas worked for ten years. The company has raised almost $280 million, and has been using its latest $150 million round to ramp up its marketing efforts.
M&A
It was announced Monday that Apple had acquired Concept.io, the company behind a personalized audio feed called Swell Radio that curates content from a library that includes NPR, Ted Talks, and the Harvard Business Review. The Wall Street Journal reported that Apple paid $30 million to purchase the two-year old company that was incubated at Charles River Ventures, where founder and CEO Ram Ramkumar was working as an entrepreneur-in-residence. Concept.io raised $7.2 million (at a $19 million valuation) from seed investors Andreessen Horowitz and CRV, and Series A financiers Draper Fisher Jurveston and Google Ventures, among others.
Apple also confirmed it had bought BookLamp, a Boise, ID-based book analytics service behind the Book Genome Project, for between $10 and $15 million. Like Swell, BookLamp was purchased for technology and talent, with the site being discontinued some time last week. BookLamp raised $900,000 from local backers, and becomes the first company from the Gem State to have been purchased by Apple.
Nordstrom has agreed to buy Trunk Club, a Chicago-based online men’s subscription clothing service, for an undisclosed amount. The five year old company, which had previously raised $11.4 million from investors US Venture Partners, Apex Venture Partners, Greycroft Partners, and Anthos Capital, will continue to operate as a separate entity. CEO Brian Spaly is also a co-founder of Bonobos, a company he started with Andy Dunn while the two were students at Stanford GSB but left after a falling out. Nordstrom is a lead investor in Bonobos, and began carrying the brand’s clothing in 2012.
The social shopping app LuvOcracy will be shut down after the service was acquired this week by @WalmartLabs, the big box retailer’s Silicon Valley R&D arm. The three-year old company had raised $11 million from Kleiner Perkins, Google Ventures, CrunchFund, Marissa Mayer, and Tony Robbins among others, but struggled to compete in a space that Pinterest has grown to dominate. CEO Nathan Stoll is a former Google Product Manager and co-founder of the social search engine Aardvark.