When Google this week bought a big chunk of Lending Club for $125 million, it wasn’t just good news for the San Francisco startup: Prior Lending Club investors like Kleiner Perkins Caufield and Byers saw their stakes soar in value.
Kleiner Perkins, which has come in for a rough time of late, put a reported $15 million last summer into Lending Club, a peer-to-peer exchange that claims to have brokered more than $1.6 billion in personal loans since launching in 2007. I’m told that the Kleiner investment valued Lending Club at $550 million.
Google’s investment – which went not to the company but to buy out prior shareholders – values Lending Club at $1.55 billion, sources confirm. I’m no math major, but from here it looks like Kleiner almost tripled its money in less than a year. (I’m trying to find out whether KP and earlier backers like Canaan Partners sold any of their stakes to Google; Norwest Ventures is hanging onto its shares, according to somebody in the know.)
Google’s move also would seem to be a big deal at Plug and Play Tech Center, which first incubated Lending Club in its Redwood City startup den. Plug and Play boss Saeed Amidi was out of the country Friday, but the guy who made his name leasing Palo Alto office space to startups like PayPal — and, interestingly enough, Google – has gotta be smiling.
So is Charles Moldow of Foundation Capital, which first invested in Lending Club three years ago. The firm doubled down as part of Thursday’s deal, co-investing with Google to snap up more shares of Lending Club. It was, I’m told, the firm’s largest investment in its 18-year history.
So how does a deal this big come together? I mean, I assume Google isn’t hanging out on SecondMarket. Sources say the Mountain View search giant approached Lending Club CEO Renaud Laplanche, who then asked his prior investors if they’d make room for Google in the pool. Added Moldow via e-mail: “Renaud generally has a good understanding of the supply and demand for shares, and he puts parties together when he believes he has critical mass.” At $125 million, that’s a heck of a party.
On the much smaller end of the M&A spectrum, Palo Alto-based Jive Software tucked into this week’s quarterly earnings announcement the news that it had acquired two small companies. StreamOnce, of San Jose, lets users plug their email streams directly into Jive, while Clara - headquartered not in Santa Clara but in Iceland! – sells analytics tools to help businesses engage with users across different online platforms.
The combined price tag was $13.8 million in cash and stock. The two deals double the number of acquisitions Jive has made since its 2011 IPO, and company honchos say they’ll keep an eye open for other buying opportunities.
Also making news this week was San Jose’s Skytree, a big data analytics play. It landed an $18 million Series A from U.S. Venture Partners, shipping giant UPS and former Sun Microsystems CEO Scott McNealy.
McNealy, who these days is chairman of a Denver-based startup called Wayin, told me he was drawn to Skytree by the track record of CEO (and Sun alum) Martin Hack. “Skytree has put years of advanced analytics knowledge into a system that companies can leverage without having to staff up on machine learning Ph.Ds,” McNealy said. “In a way, they made something rather complex very accessible.”
Lastly, a Khosla Ventures-backed startup called Nutanix, which makes data-center infrastructure, cut the ribbon on a 30,000-square-foot headquarters near San Jose’s airport. That by itself isn’t so unusual, but here’s something that is: The company’s recruitment perks include free health and dental care for employees and their families.
Since most other folks have seen their out-of-pocket health costs tick up over the years, I can appreciate how that kind of old-school bennie is key in the valley’s white-hot hiring market. It should come as no surprise that Nutanix was co-founded by a Google alum, since GOOG has more or less rewritten the book on employee perks.