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With A Little Help From Post Malone And Tom Brady, A Music Mogul Moves Into VC

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This is an excerpt from Deal Flow, Forbes’ twice-weekly newsletter about the latest billion-dollar deals from venture capital, private equity, M&A and beyond. Want a new edition in your inbox as soon as it comes out? Subscribe here.


You have probably heard of names like Post Malone, Justin Bieber and Doja Cat. You might be less familiar with Louis Bell, Billy Walsh and Carter Lang.

But the former group might not be where they are without the latter. Bell, Walsh and Lang are three of the songwriters and producers in the stable of talent at Electric Feel Entertainment, a song factory that’s rocketed to fame in recent years by crafting a string of hits for some of the biggest singers in the world. Electric Feel has helped create 19 number-ones over the past five years, following in the footsteps of the Brill Building, Motown Records and Max Martin as the music industry’s hottest new hit machine.

It’s all happened under the auspices of Austin Rosen, Electric Feel’s 34-year-old founder and CEO. (There’s no connection to MGMT and its 2007 smash “Electric Feel,” other than Rosen really liking the song.) But these days, making massive records isn’t the only thing on his mind.

Last year, Rosen launched Electric Feel Ventures, a venture firm focused on early-stage investments in the entertainment and consumer sectors. And he’s been doing deals: EFV has already staked around 50 startups, and the firm is nearly finished investing out of its debut $30 million fund.

How does putting together the talent to create smash-hit songs compare to the quest for the next big startup? And where does Tom Brady fit in? I spoke with Rosen recently about his fascinating pivot to venture capital.


Deals for wheels

Splashy funding rounds for speculative startups have fallen out of fashion amid the recent tech downturn. But they haven’t disappeared entirely. Just ask veteran entrepreneur Marc Lore.

Lore raised $350 million in funding this week for Wonder, his twist on a meal delivery startup, resulting in a $3.5 billion valuation. Instead of picking up food from other eateries, Wonder buys the rights to recipes from famous chefs and restaurants and prepares meals in its own network of mobile kitchens. Bain Capital Ventures led the funding, while other big names like Accel, NEA and General Catalyst also took part.

Lore is best known for founding ecommerce startups Quidsi and Jet.com, which he eventually sold to Amazon and Walmart, respectively. Last year, he teamed up with Alex Rodriguez to acquire the NBA’s Minnesota Timberwolves.

Like at Wonder, wheels are a big part of the business model at Metropolis Technologies, which raised its own $167 million in funding this week: The Los Angeles-based startup is developing computer-vision tools that let drivers automatically pay for parking at lots and garages without having to scan a card or a phone. Investors in the round include 3L Capital, Assembly Ventures and Dragoneer Investment Group.


Sad SPACs

Two companies getting ready for SPAC mergers had to adjust their plans this week. One would-be deal is off the table, and the other is suddenly looking a lot smaller.

DNEG, a U.K.-based visual effects studio that’s probably best known for its work on Stranger Things, called off its agreement to merge with a SPAC at a $1.7 billion valuation, citing both the slumping SPAC market and broader market volatility. DNEG had announced plans to go public in January by combining with Sports Ventures Acquisition, a blank-check vehicle led by longtime metals executive Alan Kestenbaum.

Separately, telemedicine specialist ETAO International amended the terms of its planned SPAC deal, slicing its valuation from $2.5 billion down to $1 billion. Based in New York and operating largely in China, ETAO also first announced its deal in January. The SPAC market wasn’t in great shape then, but it’s since gotten even worse. A regulatory filing cited a number of reasons for the change in terms, including ETAO’s failure to close a private placement, uncertainty whether a planned PIPE investment would go through and broader market conditions.


Televised takeovers

Baidu wants to get out of the video streaming game. The Chinese tech giant is in talks to sell its majority stake in iQIYI, a video streaming service with more than 500 million monthly active users in China, with hopes of fetching a $7 billion valuation, according to Reuters. Private equity firm PAG is reportedly a potential suitor, as are other financial firms and state-owned companies.

Baidu founded iQIYI in 2010 in collaboration with Providence Equity Partners. The company bought out Providence two years later and conducted an IPO on the Nasdaq in 2018; today, it retains a roughly 53% stake. Baidu’s reported asking price of $7 billion would be a hefty premium to iQIYI’s current market cap of $3.8 billion.

Elsewhere in the world of televised and streaming content, British television network ITV agreed this week to buy a majority stake in Plimsoll Productions, a documentary specialist known for producing titles such as Night on Earth, Hostile Planet and the upcoming A Year on Planet Earth. The deal values Plimsoll at £131 million ($162 million).


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