A weekly roundup of must-read L.A. tech investments and acquisitions.
Type: Credit Line
Investor: Fortress Investment Group
Description: ZestFinance has developed a machine-learning software program that assesses the risk of lending to sub-prime borrowers. Previously, it had sold that software to financial institutions, but now it aims to use its program, and $150 million in funding, to originate loans to near-prime borrowers, the top slice of the subprime category. ZestFinance is part of an emerging financial sector that believes it can nimbly avoid the risks of subprime lending through savvy data crunching.
Location: Beverly Hills
Investors: FTV Capital
Description: InvestCloud makes custom cloud-based applications for financial advisors, family offices, hedge funds and wealth management firms. The company’s software gives customers of money managers a portal to see how their investments are doing. The 118-person company will use $15 million of its stock sale to expand operations to Europe, said President Colin Close. The other $30 million will be used to buy out stock owned by Close, Chief Executive John Wise, the company’s lead Series A investor Kern Whelan Capital, as well as other small shareholders.
Acquired: Nine Internet service companies
Description: J2 provides cloud services like Internet fax, email marketing, data storage and backup. It has grown largely through bite-sized acquisitions of companies that provide similar services. J2 purchased nine companies in the third quarter. Moreover, since Jan. 1, it has made 20 acquisitions for a cumulative sum of $265 million. The company’s acquisitions are aimed at bringing together a fragmented industry of independent cloud storage and Internet-service companies under one roof.
Location: Los Feliz
Investors: Upfront Ventures, Hipmunk Chief Executive Adam Goldstein, Wonga founder Errol Damelin, Daher Capital, Whisper President Mark Troughton, early Facebook employee Scott Marlette, and MakeSpace Chief Executive Sam Rosen
Description: Car rental app Skurt of Santa Monica has launched at LAX. The app allows customers to order rental cars, which are driven to wherever they are by an employee of the company. Skurt gets cars from independent car rental businesses with excess inventory and rents them out at prices typically lower than traditional car rental services. The company expects customers to use the service 50 percent of the time for around-town rentals and 50 percent of the time for airport rentals.
Location: Los Angeles
Buyers: Clinton Foy, Peter Levin, Steve Kaplan, Allen DeBevoise, Gregory Milken, Paul Rappoport, Brian Lee, Akinobu Yorihiro and Machine Shop Ventures
Description: A group of mostly L.A. tech investors has purchased a League of Legends e-sports team known as Team 8 for an undisclosed amount. Team 8’s name will be changed to the Immortals and its video game players will operate out of Los Angeles. The company is also looking at expanding to other video game leagues, such as Counter Strike and DOTA 2 competitions, through additional team purchases.
Description: Content management software company Lakana of Saint Paul, Minn. bought mobile-advertising technology company Kixer. Founded in February 2014, Kixer had raised about $1 million in seed funding from Chris Sacca’s Lowercase Capital, TenOneTen Ventures, Bill Budinger and Clark Landry.
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