Axios Pro Rata

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December 20, 2022

ICYMI: Sam Bankman-Fried was sent back to a Bahamian prison yesterday, after not waiving his extradition rights during a court hearing.

  • SBF's own attorney said he was "shocked" that his client appeared at the hearing, during which SBF demanded to see a copy of his U.S. indictment.
  • Expect a follow-up hearing within the week.

Top of the Morning

Illustration of a crystal ball

Illustration: Annelise Capossela/Axios

Last week I asked for 2023 predictions. And you delivered. Here's a sampling:

Venture capital

  • "We'll see corporate VCs step in aggressively to fill the financing void as 'tourist healthcare investors' continue their retreat." — Oliver Keown, Intuitive Ventures
  • "Funding for generative AI and predictive computing startups will explode to over $1 billion." — Edith Yeung, Race Capital
  • "While there's a large amount of dry powder for now, GPs will have to be extra disciplined because LPs are over-indexed to venture and are already exercising far more scrutiny in committing capital."— Sophie Bakalar, Collab Fund
  • "The days of $30mm post-money seeds are over (for now, at least)." — Tyler Griffen, Restive Ventures
  • "Many startups will hit the wall after years of overfunding and hyped valuations, but we'll also see renewal and optimism through the next great wave of new startups in areas we aren't even discussing today. Oh, and Elon will continue to troll us and we'll sadly tune in to see what he has to say next." — Mark Suster, Upfront Ventures

Private equity

  • "2023 deal volume/activity will be the opposite of weather in April in New England ... in like a lamb and out like a lion." — Sam Yules, Thoma Bravo
  • "Deal volume in the low end of the mid-market buyouts will be hurt by higher interest rates; a combination of pullback of senior lenders from the sector and increased rates for mezz investors." — Craig Jones, TPE Boulder

Mergers & acquisitions

  • "Banks will bargain hunt amidst the fintech wreckage, but will be waiting for signs that prices have bottomed and some certainty in the macro environment to avoid buying a landmine." — Jonah Crane, Klaros Group
  • "Look for Amazon, Walmart, CVS and others to go on acquisition sprees of marked down assets as they continue to build out their health platforms and value-based care strategies." — Karen Au Yeung, LRVHealth
  • "Financing headwinds and valuation shifts may combine with compelling strategic rationales and fewer options to produce more tech matchmaking in 2023 than expected." — Gregory Bedrosian, Drake Star Partners
  • "We will see massive tech consolidation across venture-backed startups in the form of M&A." — Cathy Gao, Sapphire Ventures
  • "U.S./China political tension will make cross-border transactions between the two countries more challenging, with SAMR review in China and CFIUS review in the U.S. focusing on competition, consumer data, and IP protection." — Wayne Kawarabayashi, Union Square Advisors
  • "Mark Zuckerberg will separate the social media assets (Facebook / WhatsApp / Instagram) from Meta and spin out Meta as a separate business (Oculus / Metaverse assets) that he'll lead." — Mark Sherman, Telstra Ventures

Everything else

  • "The great 2023 interest rate pump fake, as the Fed drops rates briefly before raising back up." — Jameson Hartman, RET Ventures
  • "Tech IPOs return post-Labor Day for companies with sustained profitability and healthy growth." — Richard Yen, Medici Capital Partners

The BFD

Photo illustration of Chuck Schumer in front of a wall of minimalist clocks.

Photo illustration: Aïda Amer/Axios. Photo: Anna Moneymaker/Getty Images

Congress early this morning released the text of its year-end spending bill, without any of the antitrust reform measures that had bipartisan sponsors in both the House and Senate.

Why it matters: Democrats have talked for years about changing antiquated antitrust law, particularly as it related to Big Tech, but failed to do so despite controlling both Congress and the White House for two years. Making it even worse, their primary stumbling block has been the man they chose to lead their Senate majority, Chuck Schumer.

Caveat: The omnibus did include language that raises the cost of merger filing fees for transaction valued at $5 billion or more. But negotiators also stuck a finger in the eye of FTC chair Lina Khan by saying the newfound funds won't be allocated until 2024.

The bottom line: If antitrust law is going to evolve, it'll need to come from state-level and foreign governments.

Venture Capital Deals

Viva Republic, operator of South Korean finance app Toss, raised $405m in Series G funding at a $7b valuation. Tonic Private Equity led, and was joined by Korea Development Bank, Altos Ventures, Goodwater Capital, Greyhound Capital, Aspex Management, BOND, DUMAC and Korea Investment & Securities. https://axios.link/3FPiKfM

Divergent Technologies, a Torrance, Calif.-based sustainable manufacturing company, raised $100m from autonomous software developer Hexagon (Stockholm: HEXA). https://axios.link/3jaIcEt

CyberCube, an SF-based cyber risk analysis startup, raised $50m. Morgan Stanley led, and was joined by Stone Point Capital and insiders Forgepoint Capital, Hudson Structured Capital Management and MTech Capital. www.cybcube.com

Helm.ai, a Menlo Park, Calif.-based developer of driver assistance system software, raised $31m in Series C funding. Freeman Group led, and was joined by ACVC Partners, Amplo and strategic investors Honda Motor Co., Goodyear Ventures and Sungwoo Hitech. https://axios.link/3V3DJAU

• User Interviews, a New York-based app for recruiting customer experience survey participants, raised $27.5m in Series B funding. Sageview Capital led, and was joined by Teamworthy, Accomplice, Las Olas VC, Trestle Ventures, ValueStream, Remarkable Ventures and FJ Labs. https://axios.link/3jhfJwW

Revel, a social platform for NFTs, raised $7.8m in seed funding led by Dragonfly Capital. https://axios.link/3G1nf8e

Artifact, a Walnut, Calif.-based startup that helps record families stories via audio, raised $5m from GV, Spark Capital, Offline Ventures, Goodwater Capital and Atento Capital. www.heyartifact.com

Utorg, an Estonian crypto trading app, raised $5m in seed funding. Dragonfly led, and was joined by TA Ventures and Hypra. www.utorg.pro

🍷 Vint, a Richmond, Va.-based fractional investment platform for wine and spirits, raised $5m in seed funding led by Montage Ventures. https://axios.link/3PH82w0

Husslup, a digital marketplace app for Hollywood creatives, raised $2.5m in seed funding, per Axios Pro. f7 Ventures and Fuel Capital co-led, and were joined by Ulu Ventures, Gaingels and 360 Venture Collective. https://axios.link/3WsNwl5

Private Equity Deals

Abry Partners and Charles Schwab agreed to buy minority stakes in Dynasty Financial Partners, a St. Petersburg, Fla.-based RIA network that had been considering an IPO. https://axios.link/3jgG7XS

Appvion, an Appleton, Wis.-based portfolio company of Wynnchurch Capital, acquired Decorative Films, a Frederick, Md.-based maker of adhesive decorative, privacy and functional window films. www.appvion.com

Anchorage Capital agreed to buy Australian luxury department store David Jones from South Africa's Woolworths Holdings. https://axios.link/3PDBXFC

🚑 Avista Capital Partners acquired Spear Education, a Scottsdale, Ariz.-based dental education provider, from sellers like Linden Capital Partners and Brentwood Capital Partners. www.speareducation.com

Gauge Capital acquired Exact Customer, a digital performance marketing agency focused on the home services market. www.exactcustomer.com

J.C. Flowers acquired a $5.81b portfolio of bad loans from Indian private lender Yes Bank. https://axios.link/3BLleuq

• Keensight Capital agreed to buy Quanos, a German provider of industrial aftersales and digital tech documentation software, from IK Partners. www.quanos.com

🚑 KKR agreed to buy Bushu Pharmaceuticals, a Japanese contract manufacturing group, from BPEA EQT. https://axios.link/3v2a5Bs

• L Catterton invested in BloomChic, a Hong Kong-based online retailer of plus-sized women’s clothes. https://axios.link/3FHL43w

• PAI Partners acquired the savory solutions group of IFF (NYSE: IFF) for around $900m, including the Wiberg and Piasa brands, https://axios.link/3Vbb3WS

Shoreline Equity Partners acquired C&S Chemicals, a Marietta, Ga.-based provider of water treatment and animal health chemicals. www.candschemicals.com

Thomas H. Lee Partners acquired a majority stake in Bynder, a Dutch provider of digital media asset management solutions. www.bynder.com

Public Offerings

Ionos Group, a German web hosting company owned by United Internet and Warburg Pincus, is prepping to go public at up to a €5b market value, per Bloomberg. https://axios.link/3HQLqHU

Liquidity Events

Hexagon (Stockholm: HEXA) acquired Qognify, a Pearl River, N.Y.-based provider of physical security and incident management software, from Battery Ventures. www.qognify.com

JPMorgan (NYSE: JPM) acquired a 48.5% stake in Viva Wallet, an Athens-based payments tech company, for over $800 million. Viva had raised around $750m from firms like Tencent, Breyer Capital, Hedosophia and the European Bank for Reconstruction and Development. https://axios.link/3j2NB0n

Magna International (TSX: MG) agreed to buy the driver assistance unit of Swedish auto parts maker Veoneer from SSW Partners for around $1.5b. https://axios.link/3V60cxi

More M&A

Happy Always Sunny GIF by It's Always Sunny in Philadelphia - Find & Share on GIPHY
Source: Giphy

Mondelez International (Nasdaq: MDLZ) agreed to sell its chewing gum portfolio to Dutch confectionary company Perfetti for $1.35b. Among the included brands are Chiclets, Bubblicious, Dentyne and Trident.

  • Mondelez continues to seek a buyer for its Halls cough drops unit, as it refocuses on food and chocolate.

Chime, an SF-based fintech valued by VCs at $2.65b, was twice rebuffed in efforts to buy New York-based paycheck advance startup DailyPay, per The Information. https://axios.link/3Wboasn

The London Stock Exchange Group (LSE: LSEG) agreed to acquire Acadia, a provider of services for uncleared derivatives. www.acadia.is

Lucid Group (Nasdaq: LCID), a Newark, Calif.-based EV maker, raised $1.5b via a private placement to Saudi Arabia's Public Investment Fund, which is the company’s largest outside investor. https://axios.link/3G6QrKZ

Serica Energy (LSE: SQZ) agreed to buy North Sea-focused Tailwind Energy Investments for £644m. https://axios.link/3WuZpXF

🚑 The U.K. Competition & Markets Authority will launch an in-depth investigation of Cochlear's (ASX: COH) $121m takeover of hearing implants business Oticon Medical from Copenhagen-listed Demant. https://axios.link/3v2gMDJ

Westpac Banking (ASX: WBC) bailed on the takeover process for payment terminals company Tyro Payments (ASX: TYR). https://axios.link/3FD6YVp

Fundraising

🌎 General Atlantic closed its debut climate tech fund, called BeyondZetZero, with $2.6b in outside commitments. The firm also is dedicating around $900m from its global capital pool to climate tech deals. www.generalatlantic.com

Linse Capital, a Puerto Rico-based PE firm focused on industrial technologies, raised a total of $700m for its debut fund and a pair of co-investment vehicles. www.linsecapital.com

10D, an Israeli VC firm, raised a total of $245m for its second early-stage fund and first opportunity fund. www.10d.vc

The 81 Collection, a Chicago-based VC firm focused on capital-intensive “hard” industries like manufacturing and retail, raised $41m for its debut fund. www.81collection.com

It's Personnel

L Catterton promoted Harry Fackelmayer from VP to principal. www.lcatterton.com

TSG Consumer Partners promoted Adam Hemmer to managing director. It also promoted Alec Barnett, Sam Pritzker and James Zelnick to principals, Alec Fogarty to SVP, Parker Brown to VP and Josh Ronson to senior associate. www.tsgconsumer.com

Final Numbers

Source: Axios Visuals
Source: Axios Visuals

Bird (NYSE: BRDS), the e-scooter company that went public last year via SPAC, this morning proposed a merger with its profitable Canadian platform partner (owned by Relay Ventures) and $32 million in new financing.

  • This comes after reports that Bird is been seeking to recover unpaid fees from users, even when account balances are less than one dollar.
  • Bird once was valued by VCs at $2.3 billion, but its market cap now stands at just $52 million.

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