27 January 2017

Chan Zuckerberg Initiative announces first acquisition

In December 2015, Facebook founder Mark Zuckerberg, alongside his wife Priscilla Chan, established the Chan Zuckerberg Initiative (CZI) with an aim to “advance human potential and promote equality in areas such as health, education, scientific research, and energy”, according to its webpage. Funded by the couple’s personal wealth, the USD 45,000 million organisation was formed as a limited liability company (LLC), rather than a charity. Explaining his choice of structure for the entity, Zuckerberg stated: “By using an LLC instead of a traditional foundation, we receive no tax benefit from transferring our shares to the Chan Zuckerberg Initiative, but we gain flexibility to execute our mission more effectively.

Following through on its philanthropic objective, CZI this week announced it would acquire Meta. The Canadian start-up, which was previously known as Sciencescape, facilitates academic research by using artificial intelligence to provide clients with the most important information from a vast pool of publications on the internet. Standing in contrast to merely utilising search engine optimisation techniques, Meta’s technology is able to recognise authors and citations between papers, according to Tech Crunch. In line with its initiative, CZI plans to make Meta’s platform, which currently charges users for subscriptions, free and available to the public after some upgrading.

In a joint statement, CZI’s president of science Cori Bargmann and its chief technology officer Brian Pinkerton said: “The potential for this kind of platform is virtually limitless: a researcher could use Meta to help identify emerging techniques for understanding coronary artery disease; a graduate student could see that two different diseases activate the same immune defence pathway; and clinicians could find scientists working on the most promising Zika treatments sooner.”

Meta is currently backed by investors including RHO Canada, iGan Partners and Extreme Startups, which have altogether invested at least CAD 9 million (USD 6 million) in the company between 2013 and 2015, according to data compiled by Zephyr, the M&A database published by Bureau van Dijk. As Meta is due to change hands, its shareholders are expected to divest their stakes through the transaction.

This is not CZI’s first investment, however, as it successfully contributed to a funding round last September. The acquiror, together with other subscribers, including the International Finance Corporation and Sofina, injected around USD 50 million in India’s Think & Learn, which provides a mobile application that helps students prepare for examinations.

We are barely even a month into 2017 and there have already been 475 other completed or announced deals targeting online platform operators worldwide, according to Zephyr. The largest of these was Cisco System’s USD 3,700 million acquisition of AppDynamics, which provides a platform for software performance monitoring. Second on the list was Tianjin Jiarong Huixin Enterprise Management’s CNY 6,041 million (USD 878 million) purchase of an 8.6 per cent stake in China’s Leshi Internet Information & Technology, a video streaming site operator.

© Zephyr