Feb 8, 2017

Axios Pro Rata

By Dan Primack
Dan Primack

Greetings from the home office, where we're gearing up for tomorrow's nor'easter (really need to check on that backup generator). A quick reminder that you should follow me on Twitter @danprimack, so we can chat, snark and argue throughout the day. Now on to business...

Top of the Morning

• Bitcoin boom? Rep. Mike Rogers (R-AL) yesterday said he would introduce legislation to impose a 2% tax on remittances from individuals in the U.S. to "South American countries," including Mexico. If such a tax were to become law, it could be the adoption catalyst that Bitcoin advocates have been waiting for. "Nobody wants to talk about it, but the number one use case for bitcoin (beyond speculation) is, and will continue to be, circumventing capital controls," says Ryan Selkis, managing director of CoinDesk. Read more here.

• Alt-Midas-Delete: A bunch of VC firms have been asking for a realized returns-based alternative to the Midas List, and I want you to know that we're working on one. The platform is called Sunes.is, and so far more than 100 GPs have submitted data. What's most important for you to know is that neither I nor anyone else at Axios would have access to the submitted data (all we'd see is are the ultimate rankings), as the data collection is being done by an independent group.

The submission process is easy, and we're getting close to revealing our first set of rankings. If you and/or your firm are interested in participating, please let me know via email and I'll shoot you over the details (email is dan@axios.com, or you can just hit "reply" to this message). Our goal is to bring more transparency to the venture market, without any qualitative bias, for the sake of both investors and founders.

• Steady: The average bid price for leveraged loans currently stands at 97.48% of par, per the Credit Suisse Leveraged Loan Index (via LevInsights). That's up 0.31% year-to-date. The only subset above par is BB-rated loans, which currently stand at 100.04% (down 0.37% YTD).

• Up in smoke: CalPERS has lost out on $3.68 billion in cumulative investment returns due to its 2000 decision to divest from tobacco, according to a report prepared for the public pension giant by Wilshire Associates.

• VC on LBO crime: Sequoia Capital's Michael Moritz takes Blackstone Group's Steve Schwarzman to task in the NY Times.

• Thielings: (1) Founders Fund recently promoted both Trae Stephens and Napolean Ta from principals to partners. Stephens is an ex-Palantir exec who made news recently for being part of the Trump transition team, while Ta used to be an equities research analyst in Vietnam for Horizon Capital. It's important to note, however, that FF distinguishes between general partners (there are four, including Peter Thiel) and partners (there are now seven. Also, FF promoted Zachary Hargreaves from associate to principal. (2) Thiel, via a spokesman, says he has no interest in running for California governor. Not terribly surprising, given that friends say the main reason he didn't want an Administration gig was his dislike of managing bureaucracies.

• Mailroom: The latest open letter opposing President Trump's immigration policies comes from the biotech sector, with more than 160 biotech founders, CEOs and investors posting this missive in Nature (albeit not actually sending it to the White House). It reads, in part: "Our colleagues who are here on visas or are in global outposts are now fearful and uncertain of their status. Scientists based in other countries and employed by our companies are afraid to come to the United States or are canceling trips."

The BFD

Priceline Group (Nasdaq: PCLN) has agreed to acquire Momondo Group, a London-based operator of travel sites Momondo and Cheapflights, for $550 million in cash from shareholders like Great Hill Partners. Momondo will operate under Priceline's Kayak unit. Word is that this was not an auction, and that the original contact was between Kayak CEO Steve Hafner and Momondo CEO Hugo Burge.

• Why it's the BFD: For starters, this is a big return for Great Hill, which paid £80 million for a 60% equity stake back in October 2014. Based on past and present exchange rates at the time, that means the Boston-based private equity firm paid approximately $128 million for a stake that Priceline is valuing at around $330 million. Second, this is just a helpful reminder that Priceline remains one of the largest and most powerful Web 1.0 companies that almost never gets talked about in tech-land. Its $79 billion market cap is more than 4x the current market cap of Expedia and nearly 4x of Ctrip's current market cap.

• Bottom line: "This deal takes place because of the strength of the Momondo brand and the audience it captured and not because of any particular engineering or technological prowess. U.S.-based Kayak, which has been expanding internationally but only on a profitable basis, is strong in France, Spain and to some extent in Germany through its Swoodoo brand. But Kayak has struggled for years in the UK and doesn't have much going on in the Nordics; Momondo and Cheapflights will help in the UK, the Nordics and Russia." ― Skift

Venture Capital Deals

• Shansong Express, a Chinese provider of intra-city courier services, has raised $50 million in Series C funding. SIG Asia Investment and Yi Capital co-led the round, and were joined by Prometheus Capital. http://bit.ly/2kpaz1f

• Hacker One, a San Francisco-based bug bounty and vulnerability disclosure platform, has raised $40 million in Series C funding led by Dragoneer Investment Group. http://tcrn.ch/2lnsrH8

• Exabeam, a San Mateo, Calif.-based provider of security intelligence solutions, has raised $30 million in Series C funding. Lightspeed Venture Partners and Cisco Investments co-led the round, and were joined by return backers Norwest Venture Partners, Aspect Ventures, Icon Ventures and Shlomo Kramer. http://for.tn/2kQ4Rpw

• CXAGroup.com, a Singapore-based employee benefits and workplace wellness startup, has raised $25 million in Series B funding co-led by B Capital Group and EDBI. http://tcrn.ch/2kMUFid

• GOAT, a Los Angeles-based sneaker marketplace, has raised $25 million in new VC funding. A source familiar with the deal puts the post-money valuation north of $100 million. Accel led the round, and was joined by return backers Matrix Partners, Upfront Ventures and Webb Investment Network. http://bit.ly/2ljKguH

• Chatbooks, a Provo, Utah-based startup that turns digital photos into photo books, has raised $11.5 million in Series B funding. Aries Capital Partners led the round, and was joined by return backers Signal Peak Ventures and BYU Cougar Capital. http://tcrn.ch/2kJWMTV

• Intensix, an Israeli predictive analytics platform for early detection of patient deterioration in the ICU and high-acuity hospital units, has raised $8.3 million in Series A funding led by Pitango Venture Capital.

• Zeitgold, a Berlin-based developer of "AI technology to free small businesses from paperwork," has raised €4.2 million in seed funding from Battery Ventures and Holtzbrink Ventures. www.zeitgold.com

• Rippleshot, a Chicago-based fraud analytics startup, has raised $2.6 million in new VC funding. KDWC led the round, and was joined by CMFG Ventures. www.rippleshot.com

• Holberton School, a San Francisco-based secondary training program for software engineers, has raised $2.3 million in new VC funding. Daphni led the round, and was joined by Reach Capital, Insight Venture Partners and return backers like Partech Ventures and Trinity Ventures. http://for.tn/2kQgRY1

• Hashed Health, a Nashville, Tenn.-based group applying blockchain and distributed ledger technology to the U.S. healthcare system, has raised nearly $2 million in first-round funding led by Martin Ventures. http://bit.ly/2kF97WE

• Airsorted, a London-based provider of services for home-sharing hosts, has raised £1.5 million in new VC funding. Concentric led the round, and was joined by 500 Startups and Pi Labs. http://tcrn.ch/2lmgh2a

• Artemest, a Milan-based online marketplace for Italian handmade luxury products, has raised $1.2 million in seed funding led by Italian Angels for Growth. http://bit.ly/2kqKGxI

• Elite Interactive Solutions, a Los Angeles-based provider of remote building guarding services, has raised an undisclosed amount of VC funding from The Beekman Group. www.eliteinteractivesolutions.com

• Eversight, a Palo Alto, Calif.-based developer of "offer innovation" software, has raised an undisclosed amount of minority equity funding from Bow Capital. www.eversightlabs.com

Private Equity Deals

• Brook Venture Partners has led an acquisition of Cole Information Services, a provider of subscription-based lead generation online platforms to small businesses, from MCM Capital Partners. No financial terms were disclosed. Resolute Capital Partners and Eagle Private Capital also participated in the Brook consortium. www.coleinformation.com

• The Carlyle Group has acquired a majority stake in CMC Networks, the largest managed connectivity network in Africa, in a deal valued at more than $100 million (specific financial details were not disclosed). http://bit.ly/2k0d4Z4

• Market Track, a Chicago-based portfolio company of Aurora Capital and Cambria Group, has acquired Brandtale, a New York-based platform for digital branded content and native advertising competitive intelligence. No financial terms were disclosed. Brandtale had been seeded by such firms as Lerer Hippeau Ventures and Vayner/RSE. www.markettrack.com

• Mellivora Capital Partners has acquired the Sugar Grove Naval Base in West Virginia from a Government Services Agency public auction. http://bit.ly/2kjRGdg

• Unigestion has agreed to acquire Zurich-based private equity group Akina, which has $2.6 billion in assets under management. That would bring Unigestion's total private equity AUM to more than $23 billion, or more than a quarter of its total business. http://bit.ly/2lnkdig

• Waud Capital Partners has acquired Minnesota Eye Consultants, a clinical eyecare services provider with six offices in Minnesota. No financial terms were disclosed. www.mneye.com

Public Offerings

• ProPetro, a Midland, Texas-based oilfield services company focused on hydraulic fracturing, has filed for a $345 million IPO. It plans to trade on the NYSE under ticker symbol PUMP, with Goldman Sachs and Barclays serving as lead underwriters. The company is backed by Energy Capital Partners, and reports a $36 million net loss on $273 million in revenue for the first nine months of 2016. www.propetroservices.com

• Saudi Aramco has picked Moelis & Co. to lead its upcoming mega-IPO, according to the FT. http://on.ft.com/2lhUTyg

Liquidity Events

• Lone Star Funds is again trying to sell German corporate bank IKB, according to Reuters. Rothschild and BofA Merrill Lynch are managing the process. http://reut.rs/2kk1eoZ

• Sophos (LSE: SOPH) has agreed to acquire Invincea, a Fairfax, Va.-based provider of malware protection, for $100 million. Invincea had raised around $40 million in VC funding from firms like Aeris Capital, Dell Ventures , Grotech Ventures, ORIX Growth Capital, Harbert Ventures, CIT and New Atlantic Ventures. A 2013 Series C round gave the company a post-money valuation of more than $130 million. http://bit.ly/2kGOV7a

• Twilio (NYSE: TWLO) has acquired Beepsend, a Swedish provider of SMS messaging. No financial terms were disclosed. Beepsend backers include Rosengard Invest. http://tcrn.ch/2jZPlDw

More M&A

• Condé Nast last year had talks to acquire The Hollywood Reporter and Billboard from Eldridge Industries, according to CNN Money, although the discussions stalled in December over price. UBS was repping Condé Nast, while The Hollywood Reporter retained Moelis & Co. and Goldman Sachs. http://cnnmon.ie/2kNb461

• HD Supply (Nasdaq: HDS) is exploring a sale of Waterworks, a provider of water and sewer products to contractors and municipalities, according to Reuters. The deal could be valued north of $2 billion, with private equity firms having expressed interest. http://reut.rs/2llHaC

• L'Oréal (Paris: OR) is considering the sale of its Body Shop skincare business, which could be worth around €1 billion, according to the FT. http://on.ft.com/2klhKoH

• Michael Dell has acquired a 9.8% stake in listed German market research firm GfK. http://reut.rs/2kFmoyC

• Time Inc. has signed nondisclosure agreements with two prospective takeover bidders, according to the WSJ. The publisher has a current market cap of around $1.8 billion. http://on.wsj.com/2loytsb

• Tucows (Nasdaq: TCS), a Canadian provider of Internet services like network access and domain names, has raised an undisclosed amount of equity funding from Union Square Ventures. It is USV's first-ever investment in a publicly-traded company. http://bit.ly/2kpljfR

Fundraising

• Vector Capital has closed its fifth private equity fund with $1.4 billion in capital commitments. www.vectorcapital.com

It's Personnel

• Ashish Aggarwal has joined Silicon Valley VC firm Grishin Robotics as a principal. He previously was director of M&A and corporate development for Opera Software. www.grishinrobotics.com

• Arthur Mornington has joined Oakley Capital as a partner in the firm's private equity unit. He previously was a partner with Charterhouse Capital Partners. The UK-based firm also added Hayley Whitehead (ex-Rothschild) as a director and Lovis von Andrian (EBRD) and Alex Golling (Morgan Stanley) as associates. http://reut.rs/2k0cE5a

Final Numbers: Stocks and Bonds
Dan Primack