Jul 17, 2018

Axios Pro Rata

Top of the Morning

Illustration: Abby Chen/Axios

I'm very excited to announce that we are launching the Axios Pro Rata podcast, designed to get you smarter on the collision of business, technology and politics in just 10 minutes.

  • How to subscribe: Go here, no matter your platform.
  • Why a podcast? First, because lots of you have asked for it. Second, because an audio format lets us do some things that are difficult to achieve in "print." Third, because I'm a bit masochistic.
  • Will it be just an audio version of this newsletter? No. Sometimes the topics will overlap, sometimes they won't.
  • When does it launch? This coming Monday, July 23. Subscribe now.

Trade wars: Hearing some speculation that one way China could retaliate against Trump's $200 billion in new tariffs, if they come to pass, would be to bar U.S. institutional investors from participating in Chinese investment funds. Makes me think about how Carlyle Group co-founder David Rubenstein is fond of saying that capital is America's greatest export...

It's official: David Solomon will become CEO of Goldman Sachs on October 1. Lloyd Blankfein remains as chairman through year-end, after which Solomon will hold both titles). Read the internal memo Blankfein sent this morning to Goldman employees.

Media merger mayhem: FCC chairman Ajit Pai said yesterday that he has "serious concerns" about the purchase of Tribune Media-owned TV stations by Sinclair Broadcast Group, and that he's referring the case to an administrative law judge.

  • More from Pai: "The evidence we’ve received suggests that certain station divestitures that have been proposed to the FCC would allow Sinclair to control those stations in practice, even if not in name, in violation of the law."
  • Go deeper on this developing situation with Axios' David McCabe.

On stage: Today I'm moderating two sessions at Fortune Brainstorm Tech in Aspen. The first with Jeff Housenbold and Lydia Jett of SoftBank Vision Fund (live-streamed at 11:40am ET on Fortune.com), the second a VC panel with partners from Kleiner Perkins, General Atlantic, Defy Ventures, The Engine and YC Continuity. If you've got questions, send em in.


Source: Giphy

Didi Chuxing has received a $500 million investment from Booking Holdings (Nasdaq: BKNG), as part of a larger strategic partnership whereby people will be able to order Didi-powered rides from within apps from BH brands like Booking.com, Kayak and OpenTable.

  • Why it's the BFD: Because this is the clearest indication yet that Didi is eventually coming to America.
  • Also: Didi reportedly is seeking to raise upwards of $1.5 billion via a spin-off of its car services unit, with SoftBank among the expected investors.
  • Bottom line: BH spokeswoman Kim Soward says there no explicit promise of U.S. expansion in the Didi agreement, but acknowledges that her company wants to be able to provide a full suite of services to travelers anywhere in the world. And, yesterday, Uber CEO Dara Khosrowshahi told me that while he believes Uber will continue to lead the U.S. ride-hail market, he wouldn't be surprised to see Didi enter.
Venture Capital Deals

🚑 Verge Genomics, a San Francisco-based neurological drug discovery startup, raised $32 million in Series A funding. DFJ led, and was joined by WuXi AppTec, ALS Investment Fund, Agent Capital and OS Fund. http://axios.link/MNMp

Dialpad, a San Francisco-based business communications platform, raised $50 million in Series D funding. Iconiq Capital led, and was joined by return backers Andreessen Horowitz, Amasia, Scale Venture Partners, Section 32 and Work-Bench. http://axios.link/sE5n

Fastly, a San Francisco-based content delivery network, raised $40 million in Series F funding. Deutsche Telekom Capital Partners led, and was joined by Sozo Ventures and Swisscom Ventures. http://axios.link/yyKP

Unacademy, a Bangalore-based online learning platform, raised $21 million in Series C funding from return backers Sequoia India, SAIF Partners and Nexus Venture Partners and Blume Ventures. http://axios.link/clGV

Naadam, a New York-based luxury cashmere brand, raised $16 million in Series A funding. Vanterra Capital led, and was joined by Torch Capital, U-Start Club, Trail Post Ventures and Plug & Play Ventures. www.naadam.co

Toka, an Israeli cybersecurity startup co-founded by Ehud Barak, raised $12.5 million in seed funding from Andreessen Horowitz, Dell EMC, Entrée Capital and LaunchCapital. https://www.calcalistech.com/ctech/articles/0,7340,L-3742408,00.html

Spiffy, a Research Triangle Park-based provider of on-demand car care services, raised $9 million in funding led by Bull City Venture Partners. www.getspiffynow.com

Klang, a Berlin-based gaming studio, raised $8.95 million in Series A funding led by Northzone. http://axios.link/lJrp

Mention Me, a London-based referral marketing platform, raised $7 million in funding led by Eight Roads Ventures. http://axios.link/62XX

TowerIQ, a Boston-based communication platform for the insurance market, raised $2 million in seed funding. Hyperplane VC led, and was joined by Vestigo Ventures and Clocktower Ventures. www.toweriq.io

Private Equity Deals

Aurora Capital Partners has acquired Inhance Technologies, a Houston-based provider of fluorine-based material technologies, from Arsenal Capital Partners. www.inhanceproducts.com

Avison Young, a Canadian commercial real estate firm, raised C$250 million in preferred equity funding from Caisse de dépôt et placement du Québec. http://axios.link/fUp4

KKR has agreed to pay $400 million for a 20% stake in AppLovin, a Palo Alto, Calif.-based mobile marketing company that last year had CFIUS block a $1.4 billion takeover by China's Orient Hontai Capital. http://axios.link/EDxJ

💄 Pat McGrath Labs, a New York-based makeup brand, raised $60 million from Eurazeo at an estimated $1 billion valuation. http://axios.link/3jo7

Salveo Capital acquired a minority stake in PathogenDx, a Phoenix-based provider of DNA-based pathogen testing kits for the cannabis and other end markets. www.pathogendx.com

🚑 SK Holdings has agreed to buy APMAC Fine Chemicals, a Rancho Cordova, Calif.-based maker of active pharma ingredients and intermediates, from H.I.G. Capital. www.ampacfinechemicals.com

Public Offerings

Cango, a Chinese used car marketplace, set IPO terms to 12.5 million shares at $10-$12 per share. It would have a fully-diluted market value of $1.8 billion, were it to price in the middle, and plans to trade on the NYSE (CANG) with Morgan Stanley as lead underwriter. The company reports on $56 million of net income on $168 million in revenue for 2017. Shareholders include Warburg Pincus (18.2% pre-IPO stake), Didi Chuxing (14.8%) and Tencent (10.7%).

Endava, a London-based provider of outsourced IT development services, set IPO terms to 5.6 million shares at $17-$19. It would have a fully-diluted value of $960 million, were it to price in the middle, and plans to trade on the NYSE (DAVA), with Morgan Stanley as lead underwriter. The company reports $20 million of net income on $219 million in revenue for the nine months ending March 30, 2018. www.endava.com

Pinduoduo, a Chinese discounted e-commerce site focused on group buying, set IPO terms to 85.6 million shares at $16-$19. It would have a fully-diluted market value of $19.4 billion, were it to price in the middle. The company plans to trade on the Nasdaq (PDD) with Credit Suisse as lead underwriter. Pinduoduo reports a $32 million net loss on $220 million in revenue for Q1 2018, and is backed by Tencent (18.5% stake), Banyan Capital (10.1%) and Sequoia Capital (7.4%). http://axios.link/YBGu

Pintec Technology, a Chinese online platform that connects businesses with financial services companies, filed for a $70 million IPO. It plans to trade on the Nasdaq (PT) with Goldman Sachs (Asia) as lead underwriter. Shareholders include Ventech China and Xiaomi Ventures.

🚑 RA Medical Systems, a Carlsbad, Calif.-based developer of a laser-based platform for use in the treatment of vascular and dermatological disease, filed for an $86 million IPO. It plans to trade on the NYSE (RMED), with Piper Jaffray as lead underwriter. www.ramed.com

Liquidity Events

Salesforce (NYSE: CRM) has agreed to acquire Datorama, an Israeli marketing analytics platform, for around $850 million. Datorama had raised around $50 million in VC funding from firms like Lightspeed Venture Partners, Marker, Cerca Partners and Innovation Endeavors. http://axios.link/NcDV

More M&A

Equifax (NYSE: EFX) has acquired DataX, a Las Vegas-based specialty finance credit reporting agency. http://axios.link/ZYfV

Lundin Mining (TSX: LUN) is offering to buy Vancouver-based base meals company Nevsun Resources (TSX: NSU) for around C$1.4 billion. http://axios.link/BODh

Orange (Paris: ORAN) has agreed to buy Basefarm Holding, a Norwegian provider of cloud-based infrastructure and services, at a €350 million enterprise value. http://axios.link/gCsM

Telia, a listed Swedish telco, has agreed to buy TDC’s Norwegian business for around $2.6 billion. http://axios.link/THYt


Crosslink Capital raised $275 million for its eighth venture capital fund. www.crosslinkcapital.com

It's Personnel

Andreessen Horowitz has promoted Connie Chan to general partner. She joined the firm seven years ago from Elevation Partners, and is the first person that Andreesen Horowitz has ever promoted to GP.

  • Chan, who has worked on deals like Lime and Pinterest, tells me that she disagrees with VCs who believe that the mobile platform is "played out," arguing that there is still plenty of utility left to leverage.

Michael Fabiano is joining Platinum Equity as head of a new credit investing unit. He previously was a managing director with GSO Capital. www.platinumequity.com

Final Numbers
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Adapted from IEA World Energy Investment report, 2018; Note: Electricity investment includes generation and networks. Does not include energy efficiency investment; Chart: Axios Visuals

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