Happy Friday. Here’s what we’ve got today…

• A look at the state of crypto investment in the wake of FTX fraud

• The deal sheet, plus concerns over Sullivan & Cromwell’s role in FTX bankruptcy proceedings

After lengthy prison sentence for Sam Bankman-Fried, crypto-focused firms work to navigate a rapidly changing industry, experts say

By Bob Clair

Sam Bankman-Fried, the disgraced founder of FTX, received a 25-year sentence on Thursday for his role in the fraudulent loss of billions in FTX customer funds, yet players in the cryptocurrency space say the FTX drama is a relatively small part of challenges now faced by the industry and its investors.

“The market has shrugged it off and looked at it as an isolated instance of fraud rather than something that is systematically related to crypto,” said David Sacco, a faculty lecturer at the University of New Haven focused on the cryptocurrency regulatory environment.

In 2022, after FTX collapsed and Bankman-Fried was indicted, regulators renewed calls for greater oversight and venture investors appeared likely to pull back from crypto-related investments. Now, two years later, stricter regulation has come, but appears as much a result of the proliferation of crypto-backed securities and investment products—not strictly because of the FTX situation, say the experts who spoke to Transacted.

However, Nabeel Qadri, managing partner at Protocol Ventures, a San Francisco-based crypto fund-of-funds, said the Bankman-Fried saga did cause damage to the industry.

“His actions already impacted the regulatory landscape and that’s been reflected in the U.S. regulatory bodies’ approach to regulating crypto,” Qadri said. “This has had ripple effects on the industry and made it hard for U.S. market participants to capitalize on Web 3.0. Exchanges are avoiding the U.S. at all costs with the likes of the SEC and the DOJ’s scrutiny.”

Against the backdrop of a changing regulatory environment, crypto-focused investors have also had to contend with aggressive fluctuations in cryptocurrency values over recent years.

That’s proved challenging for portfolio company exits and new fundraising. Compared to 2022, last year’s capital raised for new crypto-focused hedge funds and venture firms fell nearly 85 percent to just $5.8 billion, according to data from digital asset capital markets firm Galaxy Digital.

This year’s rebound in cryptocurrency prices may help to ease some of the pain, though the real focus will be on firms’ ability to return capital back to their limited partners.

For firms actively deploying capital, new investments may need to contend with yet more regulatory oversight in the coming years, which Sacco believes is inevitable.

“The more that crypto moves into the realm of accepted securities or mainstream securities markets, the more it will be subject to that same type of regulation,” Sacco said. “Market participants that view crypto as a viable asset welcome the regulation.”

“There’s still a lot of risk from a technology standpoint, and because this market is so new, but it’s shown incredible resilience, just look at the price of bitcoin right now compared to where it was two years ago,” Sacco said.

He added that, ultimately, the Bankman-Fried saga could be interpreted as a sign of crypto’s staying power.

What Bankman-Fried did and what they did at FTX had nothing to do with the fact that the assets were crypto assets. The issue was fraud. If anything, it proved the residency of the underlying asset.”

• The Home Depot, Inc. (NYSE: HD) has agreed to acquire SRS Distribution, a wholesale distributor of residential and commercial building products, from Leonard Green & Partners and Berkshire Partners for around $18.25 billion.

• Liberty Media is in exclusive talks to acquire Dorna Sports, the commercial rightsholder of the MotoGP series, from Bridgepoint, in a deal that could be worth around €4 billion, per the FT.

• Apollo agreed to acquire a majority stake in Panasonic Automotive Systems, a supplier of integrated automotive infotainment systems, from Panasonic Holdings for $2 billion.

• EnCap Investments is planning to sell XCL Resources, an oil and gas company with 45,000 net acres in the Uinta Basin that could be valued at around $2.8 billion in a Jefferies-led sale process.

• Ithaca Energy is in exclusive talks to acquire Eni's UK upstream assets, including Neptune Energy, which Eni acquired last year for $4.9 billion.

• Keysight Technologies agreed to acquire Spirent Communications, a provider of automated test and assurance solutions for networks, cybersecurity and positioning, for around $1.5 billion.

• Abrigo, a compliance, credit risk, and lending software solutions provider backed by Carlyle and Accel-KKR, acquired TPG Software, an enterprise content management and automated document classification software provider.

• Axcel Learning, an Alpine Investors-backed education services provider, acquired KMK, a provider of academic coaching and exam prep courses.

• CES Power, a portfolio company of Allied Industrial Partners that provides event rental services, has acquired ABird/Apex, a power rentals business, from HSS Hire Group.

• Solace Capital Partners invested in Siprocal, a provider of advertising, marketing, and digital media technology solutions to customers across North America, Latin America, and Brazil.

• Flexpoint Ford acquired a majority stake in Accuserve, a provider of revenue cycle management solutions for physician practices, from Aquiline Capital.

• Blue Yonder agreed to acquire One Network, a provider of intelligent control towers, for $839 million.

• Genstar Capital is planning to sell 2-10 Home Buyers Warranty, a provider of home warranty products and services, that could be worth around $600 million.

• Schlumberger (NYSE: SLB) agreed to acquire an 80% stake in Aker Carbon Capture, a pure-play carbon capture company, for around $400 million.

• Labcorp agreed to acquire select lab testing assets focused on clinical diagnostics and women's health from BioReference Health, a subsidiary of OPKO Health (Nasdaq: OPK), for $237.5 million.

• Avalo Therapeutics (Nasdaq: AVTX) acquired AlmataBio in a $15 million stock-for-stock transaction, picking up AlmataBio's Phase 2-ready anti-IL-1β monoclonal antibody targeting hidradenitis suppurativa; Avalo concurrently raised $185 million in a private placement.

• Descartes Systems (TSX: DSG) has acquired OCR Services, a Rockville, Maryland-based provider of export compliance and controlled commodities solutions, for around $90 million.

• Take-Two Interactive (Nasdaq: TTWO) agreed to acquire Gearbox Interactive, a video game development studio known for franchises like Brothers in Arms, Duke Nukem, and Borderlands, from Embracer Group for $460 million.

• Brown University and BTG Pactual are reportedly close to investing in Fortress Investment Group as part of its sale by SoftBank to Mubadala.

• The Chernin Group invested in Unrivaled Sports, a youth sports venture consolidating properties across baseball, softball, football, and action sports, backed by Josh Harris and David Blitzer.

• CVC Capital Partners acquired Grupo Monbake, a Spanish frozen dough producer and distributor, from Ardian, Alantra Private Equity, Artá, and Landon.

• Davidson Kempner Capital Management LP and Broadwing Inc. invested in Upchurch Companies, a construction materials supplier.

• Mill Point Capital acquired Proficium, a provider of products and services for commercial AI infrastructures and hyperscale data centers.

• One Equity Partners and Buckthorn Partners acquired Acteon Group, a provider of subsea engineering, drilling support, and asset integrity management services, from KKR.

• Golden Gate Capital is preparing to sell restaurant chain Bob Evans Farms, per Axios.

• Integrum invested in Program Productions, a provider of broadcast production labor services.

• Spindrift, a sparkling water brand backed by VMG Partners, is preparing to launch a sale process.

• Rubrik, a cloud data management and data security company with backing from Greylock, Lightspeed, Bain Capital Ventures, and Khosla Ventures, may file for its IPO by the end of next week, per Bloomberg.

Tech, Vertical SaaS, & Misc. Enterprise

• Anthropic, a developer of generative AI models, raised an additional $2.75 billion from Amazon, bringing Amazon's total investment to $4 billion.

• Brandtech Group, a generative AI-led marketing company, raised $115 million in Series C funding led by Fimalac, with participation from Nendo Labs, Mousse Partners, and the Bansk Group.

• Coro, a NYC-based all-in-one cybersecurity solution for small and medium-sized enterprises, raised $100 million in Series D funding led by One Peak, with participation from Energy Impact Partners and Balderton Capital.

• Champ Titles, a developer of digital vehicle title and registration software, raised $18 million of Series C funding led by Point72 Ventures, with participation from W.R. Berkley, Eos Venture Partners, Guidewire Software, and Rev1 Ventures.

• Skyflow, a data privacy and governance solution, raised $30 million in an extended Series B round led by Khosla Ventures, with participation from Mouro Capital, Foundation Capital, and Canvas Ventures.

• Hume AI, a developer of emotion-focused AI designed to make conversations more meaningful, raised $50 million in Series B funding led by EQT Ventures, with participation from Union Square Ventures, Nat Friedman, Daniel Gross, Metaplanet, Northwell Holdings, Comcast Ventures, and LG Technology Ventures.

• Robovision, a centralized AI platform for computer vision management, raised $42 million in new funding. Target Global and Astanor Ventures led, with participation from Red River West.

• Zafran, a NYC-based cyber risk mitigation startup, raised over $30 million from Sequoia Capital, Cyberstarts, Cerca Partners, and Penny Jar.

• Fireworks AI, a production AI platform for developers, raised $25 million in Series A funding. Benchmark and Sequoia Capital led, with participation from Databricks Ventures, Eric Vishria, Eric Slootman, Alex Wang, and executives from LinkedIn, Confluent, Meta, and onePassword.

• Vizcom, a developer of AI tools for industrial designers, raised $20 million in Series A funding. Index Ventures led, with participation from Unusual Ventures.

• Peaq, a developer of blockchain-based decentralized physical infrastructure networks, raised $15 million in new funding. Genereative Ventures and Borderless Capital co-led, with participation from Spartan Group, HV Ventures, CMCC Global, Animoca Brands, and Advanced Blockchain.

• TurbineOne, a government-focused machine learning startup, raised $15 million in Series A funding led by Bessemer Venture Partners, with participation from The General Partnership, XYZ Ventures, and Pallas Ventures.

• MyShell, a decentralized AI platform designed to build custom conversational AI agents, raised $11 million in pre-Series A funding led by Dragonfly, with participation from Delphi Ventures, Bankless, Maven11, Nascent, Nomad, and OKX.

• StealthMole, a Singapore-based cybersecurity startup focused on digital investigation and risk assessment, raised $7 million in Series A funding led by Korea Investment Partners, with participation from Smilegate Investment and Hibiscus Fund.

• Cyvl, a transportation infrastructure data company, raised $6 million from Companyon Ventures, with participation from Argon Ventures, AeroX Ventures, and Alumni Ventures, As well as previous backers MassVentures, Launch Capital, RiverPark Ventures, Launchpad Venture Group, and Hub Angels.

• FLock, a decentralized AI training company with a web3 approach, raised $6 million in seed funding. Lightspeed Fation and Tagus Capital led, with participation from DCG, OKX Ventures, and Volt Capital.

Fintech

• NewRetirement, a digital retirement planning platform, raised $20 million in Series A funding. Allegis Capital led, with participation from Nationwide Ventures, Northwestern Mutual Future Ventures, Plug and Play Ventures, Motley Fool Ventures, and Ulu Ventures.

• Midas, a Germany-based company focusing on asset tokenization, raised $8.75 million in new funding. Framework Ventures, BlockTower, and HV Capital led the round, with participation from Cathay Ledger, 6th Man Ventures, and several others.

Media & Consumer

• Blueground, an operator of flexible rentals for longer-term stays, raised $45 million in Series D funding led by Susquehanna Private Equity Investments, with participation from WestCap.

Healthcare

• Transcarent, a health insurance, brokerage, and telehealth business, is raising $125 million in Series D funding at a $2.1 billion pre-money valuation. General Catalyst is leading the round.

• Pelago, a digital treatment aid for substance use management, raised $58 million in Series C funding. Atomico led, with participation from Kinnevik, Octopus, Y Combinator, Eight Roads, and GreyMatter Capital.

• InStride Health, a provider of outpatient care for childhood anxiety and OCD, raised $30 million in Series B funding. General Catalyst led, with participation from .406 Ventures, Valtruis, Mass General Brigham Ventures, and Hopelab Foundation.

• Nourish, provider of a telenutrition platform that connects people to registered dietitians, raised $35 million in Series A funding led by Index Ventures, with participation from Maverick Ventures and TCV.

• Surge, an immune system analysis and AI development company, raised €7.5 million in funding. Eurazeo led, with participation from Kima, Teampact, MH Innov’, Boutique Venture, HCVC, and 50 Partners Santé.

Industrials, Greentech, & Other

• Lightshift Energy, a developer of grid storage solutions, raised $100 million from Greenbacker Capital Management.

• Terragia, a developer of biological conversion technologies to produce sustainable biofuels from cellulosic biomass, raised $6 million in seed funding led by Engine Ventures and Energy Impact Partners.

• Orchard Robotics, a Seattle-based developer of autonomous orchard management systems, raised $3.8 million in seed funding. General Catalyst led, with participation from Humba Ventures, Soma Capital, Correlation Ventures, VU Venture Partners, and Genius Ventures.

• Partners Group is raising between $10 - $12 billion for its latest private equity secondaries fund.

• Hunter Point Capital raised $3.3 billion for its debut fund.

• HSBC is launching a $1 billion ASEAN Growth Fund focused on companies scaling digital platforms.

• Grafine Partners raised a $600 million fund-of-funds.

• Morgan Stanley Capital Partners raised $700 million for a continuation fund for portfolio company World 50, an executive-networking business.

• Matter Partners raised $300 million for its debut venture fund.

• Alteria Capital raised $186 million for its third venture fund.

• Super{set} raised $90 million for its second venture fund.

1. Law firm conflicts ‘permeated FTX’s bankruptcy’, professors allege.

• Two academics surface renewed concerns about the role Sullivan & Cromwell has played in the crypto exchange’s saga — Financial Times

Interested in partnering with Transacted? If you’re a brand looking to connect with an engaged financial audience, we’re here for it. Please reach out. 

Got a tip or an idea for a story? Email [email protected], or Tweet/DM @transactedInc