Tag: The Carlyle Group

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Carlyle acquires 1E.com, an endpoint and hybrid working specialist, in $270M deal

Remote work was the order of the day for the past 16 months, but as we (fingers crossed) move out of the pandemic, it’s looking like a lot of people may move into a new era of hybrid work: less focus being present in offices to feel like you are getting things done, less time commuting, and more time to be productive. To help better address that opportunity, a company called 1e, which builds solutions for companies to enable hybrid working along with managing the wider space of endpoint management, has been acquired by Carlyle on the heels of a strong year of business.

The private equity firm has picked up the London-based company in a $270 million deal.

The acquisition is coming in the form of a majority stake with CEO and co-founder Sumir Karayi maintaining a significant minority stake, along with employees of the company. The firm is completely bootstrapped — no outside investors, no VCs on the cap table prior to this deal — and profitable, with growth of 28% in the last year.

The birth and now exit of 1e is an interesting counterpoint to that of most of the enterprise startups that you will read about on the pages of TechCrunch, or maybe in tech press overall.

The company was started in 1997 when Karayi and co-founders Phil Wilcock and Mark Blackburn were at Microsoft working as in-house consultants helping enterprises adopt and adapt to Microsoft software. Karayi decided he wanted to start something of his own, rather than, in his words, “working for Microsoft forever.”

Given his background, his business started first as a consultancy, but he said that it didn’t take long to pivot, since “We realized that the problems we were looking to solve we needed to build technology to do that, so we started to write our own software.”

The company got its start as a Microsoft shop, building endpoint technology management, along with tools to help companies manage their computer terminals and networks better. That included products like NightWatchman, a power management tool for PCs and servers that helped save energy consumption for businesses; Nomad, a bandwidth management tool that helps reduce server usage; and Shopping, a platform for companies to build app-store-like experiences for internal employees or customer-facing tools.

Over time — years before the Covid-19 pandemic — that also evolved into software to enable hybrid working environments, which were already emerging as a thing and already posing challenges to businesses and users.

“The challenge was that remote working was a second-class experience,” he said, with technical support, software usage, network connectivity, device issues and just about everything harder to sort out when problems arose for workers not working in the office. So 1e — a play on the last two characters of the error message you get on a failing PC, “STOP 0x0000001E” — built software to address that, too.

Overall the company amassed some 40 patents on its technology, which now is used across more than 11 million devices among 500 large enterprise customers, including AT&T, Nestle, and a number of big banks that can’t be named.

It’s been the remote working software that has seen the company through an especially strong year — no surprise there, given the environment many of us have been working in — where businesses have been buying its tools as part of their “digital transformation” efforts, and it was this that got Karayi thinking that the company — which had largely built the business it had today on an employee base of people who just like building new things, and word-of-mouth between end users — could finally do with an outside investment and cash injection to take the business to the next level.

“We’re going through a seismic change right now and we think it’s a big opportunity for 1e,” he noted, adding that while many of us might feel like remote work is everywhere, he believes this is just the beginning of how to enable better remote working. “I think the office boat has sailed,” he said.

1e went with Carlyle among a number of other bidders as it seemed like the right fit: strong support and understanding of the business, combined with a well-recognized name. The plan more generally is to follow the PE playbook if all goes well: four years of growth, with “all later options open.”

“We were attracted to 1E’s fully integrated digital experience technology, which is differentiated by its advanced remediation and automation capabilities, and are delighted to partner with Sumir as we support the company as it enters its next phase of growth,” said Fernando Chueca, an MD in the Carlyle Europe Technology Partners (CETP) advisory team. “With strong industry tailwinds, we believe 1E has significant growth opportunities and we look forward to supporting another founder-backed business to scale through investments in product innovation, commercial operations, and international expansion.”

Other recent deals from Carlyle in Europe have included Eggplant, NetMotion Software, Apama, UC4/Automic Software and ITRS.

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Alphabet-backed primary care startup One Medical files to go public

One Medical, a San Francisco-based primary care startup with tech-infused, concierge services filed for an IPO with the Securities and Exchange Commission today.

Internal medicine doctor Tom Lee founded the startup, now valued at well-over $1 billion dollars, in 2007. Lee exited his company in 2017, leaving it in the hands of former UnitedHealth group executive Amir Rubin.

The startup currently operates 72 health clinics in nine major cities throughout the U.S., with three more markets expected to open in 2020 and has raised just over $500 in venture capital from it’s biggest investor, the Carlyle Group (which owns just over a quarter of shares), Alphabet’s GV, J.P. Morgan and others. Google also incorporates One Medical into its campuses and accounts for about 10% of the company revenue, according to the SEC filing. The filing also mentions the company, which is officially incorporated as 1Life Healthcare Inc. ONEM, now plans to raise about $100 million.

Presumably, this money will help the company improve upon its technology and expand to more markets. We’ve reached out to One Medical for more and so far have only been referred to its wire statement.

According to that statement, One Medical has applied for a listing as ticker symbol, ONEM under its common stock on the Nasdaq Global Select Market. We’ll be sure to update you if and when we hear more.

 

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China is reportedly using US satellite technologies to bolster its surveillance capabilities

The Chinese government has been using a private company jointly owned by a U.S. investment firm and its Chinese counterpart to expand its surveillance and telecommunications capabilities using American technology, The Wall Street Journal reports.

At the center of the Journal’s reporting is a company called Asia Satellite Telecommunications (AsiaSat). It’s a satellite operating company acquired back in 2015 by U.S. private equity firm The Carlyle Group and Chinese private equity firm CITIC Group. Both Carlyle and CITIC are known for their ties to government in their respective home nations.

While the U.S. government basically bans American companies from exporting satellite technology to foreign governments like China, there have been no controls put in place on how bandwidth from launched satellites is used once those satellites are in orbit.

Based in Hong Kong, AsiaSat isn’t subject to the same sort of export controls and regulations that the U.S. places on companies headquartered in mainland China, which has allowed the company to acquire U.S. satellites.

The Chinese government, through its connections with CITIC, has leveraged that loophole to bolster its surveillance and telecommunications capabilities for security activities, the Journal reports.

At issue are satellites bought by AsiaSat from Boeing and Maxar Technologies subsidiary SSL, a Palo Alto, Calif. We’ve reached out to Maxar and AsiaSat for comment.

“Boeing follows the lead of the U.S. Government with respect to the use of export controlled items,” the company said in a statement to TechCrunch.

The U.S. and China are in a highly public contest over who will control the future of networking technologies — with the U.S. accusing China’s leading commercial telecommunications vendors of collaborating with the Chinese government to spy on partners.

Huawei is suing the US government over ‘unconstitutional’ equipment ban

U.S. officials also accuse their counterparts in Beijing of using physical and cyber espionage to acquire American technology. However, in this case, China was able to use corporate interests and profit-seeking to gain access to core U.S. satellite technologies, the Journal reports.

Since at least 2011, Citic has touted Chinese intelligence branches and armed services as customers of its satellite company’s services, according to the Journal’s reporting.

In other marketing materials, Citic’s satellite company has touted its link to government agencies — as a tool to link national broadcasters to far flung towns and cities across the sprawling nation. Meanwhile, China’s Ministry of Public Security has documented how it used AsiaSat 5 — a satellite made by SSL — to develop rapid-response forces with audio and video capabilities provided in real-time, the Journal is reporting.

Citic’s ownership stake in AsiaSat predates the Carlyle Group’s acquisition. The company previously was a joint venture between the Chinese private equity firm and General Electric and its surveillance activities extend back to that period as well.

In 2008 and 2009, AsiaSat assets were used to help authorities communicate and coordinate efforts to put down antigovernment protests over religious and ethnic persecution in Tibet and Xinjiang — a mineral-rich region in Northwestern China populated mainly by an ethnic minority called Uighurs, a group comprised predominantly of practicing Muslims.

In a statement provided to the Journal, AsiaSat disputed the company’s reporting, saying that the Chinese military wasn’t a direct customer, but used capacity for disaster relief. Several cities in the Chinese province of Sichuan were decimated by an earthquake that hit in 2008.

AsiaSat also declined to comment on whether its bandwidth was being used in Xinjiang currently or whether it had been used in the Tibet and Xinjiang uprisings that occurred roughly ten years ago. In the past few years, Chinese authorities have built a pervasive surveillance network in Xinjiang and sent as many as one million ethnic Uighurs to internment camps, according to multiple reports.

In statements to The Wall Street Journal Carlyle said that AsiaSat’s equipment supports internet and phone communications for Chinese telecommunications carriers.

“It is effectively a pipe,” Carlyle said in a statement to the Journal, “and AsiaSat, because of privacy issues, doesn’t monitor or regulate the content that flows through it.”

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Ex-Windows EVP Terry Myerson joins Madrona Venture and The Carlyle Group

More than half a year after splitting from a long time role at Microsoft, former Windows and Device EVP Terry Myerson is finally ready to talk about his future. In a blog post this morning, the executive discussed what he’s been up to for the past several months (running, learning the piano, strengthening personal relationships, and all that good stuff) and highlighted two new roles.

The 21-year Microsoft vet will be joining Madrona Venture Group as a Venture Partner. The Seattle-based firm has been having a good run of late. As we noted back in May, four of its portfolio companies — Smartsheet, Apptio, Redfin and Impinj —have managed to IPO in the last two years.

Myerson notes that Madrona Managing Director Soma Somasegar was among the first to reach out after his exit from Microsoft.

“Madrona’s core idea is that if you are going to really partner with a company from day one, especially during the very earliest phases of a company’s growth, that is best done locally so that you can support the new team,” Myerson writes. “This resonated with me as true – and being the leading Pacific Northwest VC, with the biggest fund to invest here, and the best track record from Amazon, to four IPOs in the past two years – this started to sound like a great team to be a part of. I really liked the focus on the Pacific Northwest and innovation.”

Along with that role, Myerson has announced that he’ll also be joining private equity firm The Carlyle Group as Operating Executive. “Whereas my role at Madrona challenges me to consider how to leverage the latest technical innovations,” Myerson says, “my role at Carlyle will challenge me to deliver software at scale in many diverse organizations. I couldn’t be more excited to work with the leadership teams of great Madrona and Carlyle companies to grow their businesses.”

Myerson clearly still has a soft spot for his old team, as well, quoting former boss Satya Nadella and noting that the whole letter was written on the new Surface Pro 6 (as a LinkedIn post, no less). Old habits, as they say, die hard.

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One Medical raises $350 million from Carlyle Group to help double up offices and offerings

One Medical has confirmed to TechCrunch it has closed on funding from the Carlyle Group for a new cash infusion worth $350 million. This announcement follows an earlier report this week One Medical was seeking to close a $200 million deal, on top of a possible $100 million in stock for the financing firm.

However, we have since learned the deal is a tad higher, including $220 toward the primary equity investment and another $130 million in a secondary investment.

CEO Amir Rubin tells TechCrunch the new funds will go toward a serious expansion for the company, including doubling it’s 72 offices throughout the seven states One Medical is currently serving and expanding into new markets. Rubin was coy about where those new markets might be for now but said we’d know soon enough.

One Medical is a members-only technology platform offering an array of concierge medical services, including same-day scheduling, virtual doctor visits and reminders for important checkups. It started out as a direct-to-consumer model but has expanded in the last few years to offer medical care for employees at companies like Uber and Adobe.

The funding will also help One Medical take on both dinosaur incumbents in the medical field as well as newer startups with a similar technology offering like Forward, an AI-based “medical office of the future.”

To beat both, Rubin would like to use part of the new cash to beef up his company’s tech backend. One Medical’s platform is built on algorithms and machine learning to pull together new information and help patients have a better experience at the doctor’s office. Right now, getting all of your medical history in one place is a hard problem to solve in the U.S. healthcare system — only complicated by the many coded hurdles in dealing with insurance. Rubin would like his platform to quickly surf through the data and find procedures done elsewhere to ensure patients are better served by their medical team.

Lastly, the new funding provides an opportunity for One Medical to scale up its human medical team. One Medical tells TechCrunch it will also invest tremendously in its clinical team, doubling its provider numbers, which are in the “several hundreds” right now.

Prior to this round, One Medical had raised just over $180 million and was last valued around $1 billion. The new funding puts the total raised at $530 million.

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One Medical may be in talks to raise more than $200 million

One Medical, the company hoping to disrupt the doctor’s office with concierge services, virtual visits and same-day appointments, is rumored to be in late-stage talks with the Carlyle Group for $200 million in funding, according to CNBC.

The firm is also looking to  buy an additional $100 million worth of shares from existing investors, according to the report.

We’ve reached out to the Carlyle Group and One Medical for more information.

One Medical has so far raised over $180 million, including from Alphabet’s venture arm GV and Benchmark Capital, to bring its idea of accessible healthcare to areas covering San Francisco, NYC, Seattle and several other cities across the country. The latest calculation put the company at just over $1 billion in valuation. This new cash infusion would more than double its coffers, bringing the total raised to more than $380 million.