Axios Pro Rata
August 27, 2020
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Top of the Morning
The New York Stock Exchange yesterday received SEC approval for a rules change that would allow companies to raise new capital as part of a direct listing.
Why it matters: We referred to this sort of hybrid as "The perfect IPO," when first discussing the concept more than 14 months ago.
Who can participate: This would apply to issuers that plan to sell at least $100 million worth of primary shares, or for issuers where the combined value of outstanding shares will be at least $250 million.
How it works: It's a bit like a marketable limit order, with primary shares being priced off the opening auction with the NYSE. In other words, there's more pricing efficiency and fewer pre-trade "pops."
- On the flip side, issuers wouldn't be able to handpick large shareholders as they can via a traditional IPO process. Unless they introduce something like a PIPE into the equation.
- Lockups will remain subject to negotiation between issuers and underwriters, as they've always been.
- The Nasdaq is a bit behind the eight ball on this, filing its own application just days ago.
The big question: What company will go first, to help prove out the model and blaze a trail for others to follow.
- One obvious candidate is Airbnb. We recently noted how the company announced it had filed confidential paperwork for an "initial public offering," suggesting it would only sell primary shares. But now that an IPO can also include secondary share sales...
- John Tuttle, NYSE's vice chairman and chief commercial officer, obviously wouldn't discuss Airbnb when we spoke last night about the SEC approval. But, much more generally, he said: "This topic comes up almost every day. A lot of these companies are going to take a serious look at this."
Kevin Mayer stunned just about everyone late last night, resigning as CEO of TikTok and COO of ByteDance.
- Mayer was hired just three months ago, after a long career at Walt Disney Co.
- TikTok will be led, at least for now, by general manager Vanessa Pappas.
- Bloomberg just reported that Microsoft may have a deal signed with ByteDance within the next 48 hours. There's also a new CNBC report that Walmart has entered the buyside mix, although its lack of cloud competency and its China business would give it extremely long odds.
Thought bubble: It was never clear if Mayer would be asked to continue leading TikTok, including if Microsoft wins the Trumpstakes. Microsoft has both kept acquired company CEOs around (LinkedIn) and not kept them (Mojang/Minecraft, Github).
Lindblad Expeditions (Nasdaq: LIND), an adventure travel company known for its Alaska and Galapagos Island cruises, agreed to raise $85 million in convertible preferred stock from an investor group that includes MSD Partners and Durable Capital.
- Why it's the BFD: The deal came together in just two days and was 3x oversubscribed, Lindblad chairman Mark Ein tells Axios. This reflects growing investor faith that the travel market is poised for a COVID comeback, with pent-up demand only continuing to grow.
- Other investors in the deal include Headlands Capital, Deep Field Asset Management, and Declaration Capital.
- The bottom line: Ein says the new investment gives Lindblad runway to survive through the end of 2021, even were it not to launch a single cruise, but adds that it's been working on a coronavirus testing plan (both pre-travel and on-site) that it hopes will let it resume operations much sooner.
Venture Capital Deals
• Warby Parker, a New York-based eyeglasses designer and retailer, raised $245 million in new funding, Axios has learned. Backers include D1 Capital Partners, Durable Capital Partners, T. Rowe Price, and Baillie Gifford. The post-money valuation was $3 billion, per a source familiar with the company’s finances.
🚑 Synthego, a Redwood City, Calif.-based gene editing company, raised $100 million in Series D funding. RA Capital Management, Wellington Management, and 8VC co-led, and were joined by Founders Fund, Menlo Ventures, and Intel Capital. http://axios.link/R1VE
🚑 Kinnate Biopharma, a San Diego-based developer of kinase inhibitors for genomically defined cancers, raised $98 million in Series C funding. RA Capital Management led, and was joined by Fidelity, Viking Global, Venrock, and return backers Foresite Capital, Orbimed, Nextech Invest, and Vida Ventures. http://axios.link/F3wQ
🚑 Clene Nanomedicine, a Salt Lake City-based developer of therapies for neurodegenerative diseases, raised $42.5 million in Series D funding led by SymBiosis.
🚑 Aetion, a New York-based provider of real-world evidence for life sciences, raised $19 million in new Series B funding (round total now $82m). Johnson & Johnson Innovation and Greenspring Associates were new investors. http://axios.link/QaKy
• ChartHop, a New York-based organizational management and planning platform, raised $14 million in Series A funding led by Andreessen Horowitz. http://axios.link/VLOI
• Juni Learning, a San Francisco-based provider of live online courses for kids, raised $10.5 million in Series A funding. Forerunner Ventures led, and was joined by AME Cloud Ventures, Index Ventures, and Pear VC. http://axios.link/Kyv5
• Habi, a Bogotá-based startup that's seeking to become Latin America's version of OpenDoor or Zillow Offers, raised $10 million in Series A funding. Inspired Capital led, and was joined by 8VC, Clocktower, Homebrew, Vine Ventures, and Zigg. http://axios.link/jViN
🚑 ExoCoBio, a South Korean exosome regenerative aesthetics company, raised $9.3 million from K2 Investment Partners, SBI Investment Korea, Dt & Investment, ReeHu Investment, Focus Assets Management, and Knotus. http://axios.link/ObWi
• Berbix, a San Francisco-based instant identity verification platform, raised $9 million in Series A funding. Mayfield led, and was joined by YC, Initialized Capital, and Fika Ventures. http://axios.link/8bE5
• Raptor Maps, a Somerville, Mass.-based provider of drone tech and analytics software for solar companies, raised $5 million in Series A funding. Blue Bear Capital, Data Point Capital, and Buoyant Ventures co-led, and were joined by Congruent Ventures, Powerhouse Ventures, Mass. Clean Energy Center, and YC. http://axios.link/HAYA
🚑 SeamlessMD, a Toronto, Calif.-based digital patient engagement platform, raised $4 million in Series A funding. MEDTEQ+ led, and was joined by Hikma Ventures, Anges Québec, AIoT Health, and Sanjay Malaviya. http://axios.link/FfRj
🚑 Emme, a San Francisco-based women’s health startup focused on contraception adherence, raised $2.5 million in seed funding led by Magnetic Ventures. http://axios.link/tJ5o
Private Equity Deals
• The Acacia Group acquired TradeHelm, an Argentina-based dev-ops and tech managed services business. www.tradehelm.com
• The Carlyle Group is considering a takeover offer for Challenger (ASX: CGF), an Australian investment services provider valued at around A$2.7 billion, per The Australian. www.challenger.com.au
• Digital Colony Partners has expressed interest in buying a minority stake in Crown Castle’s (NYSE: CCI) fiber cable unit, per Reuters. http://axios.link/BhpH
🚑 Athira Pharma, a Seattle-based developer of therapies for neurodegeneration, filed for a $100 million IPO. The pre-revenue company plans to list on the Nasdaq (ATHA) with Goldman Sachs as lead underwriter, and had raised $112 million from firms like Perceptive Advisors (11.6% pre-IPO stake), RTW Investments (10.9%), and Viking Global (7.8%). http://axios.link/V9yK
• The Hut Group, a British fashion and beauty products e-commerce company, is prepping a London IPO that would value it at around £4.5 billion. Backers include Balderton Capital, Innovation Capital Group, and Sofina.
• Kioxia Holdings, the Bain Capital-owned flash memory chip company previously known as Toshiba Memory, plans to raise upwards of $3.6 billion via a Tokyo IPO on October 6. http://axios.link/Eq7i
🚑 Rede D'Or, a Brazilian hospital group, hired banks for an IPO that would seek a valuation of at least $18 billion, per Bloomberg. Backers include The Carlyle Group and GIC. http://axios.link/BHfX
• Delivery Hero of Berlin acquired InstaShop, a Dubai-based grocery delivery platform, for $360 million ($270m upfront). InstaShop was seeded in 2016 by Jabbar Internet Group, VentureFriends, and Souq. http://axios.link/rXrC
🚑 PAI Partners is seeking a buyer for the molecular diagnostics group of French medical testing equipment company ELITechGroup, which could fetch more than €1 billion, per Bloomberg. http://axios.link/GLyq
• Alibaba Group (NYSE: BABA) is in talks to increase its stake in listed Chinese courier company YTO Express Group from 10% to upwards of 30%, per Reuters. A 30% position would be valued at around $2.1 billion. http://axios.link/m7FN
• Broadway Federal Bank and City First Bank agreed to merge, creating the country’s largest Black-controlled bank with more than $1 billion in AUM. http://axios.link/IIhw
• Carrefour (Paris: CARR) agreed to buy 172 Supersol supermarket stores in Spain for around €78 million. http://axios.link/Ekkn
• Margaret Brown, a board member of CalPERS, is calling on the pension system to suspend any new private equity fund commitments until after the completion of an investigation into the personal financial holdings and resignation of former chief investment officer Ben Meng.
• Civilization Ventures, a San Francisco-based VC firm focused on life sciences, raised $35 million for its second fund. http://axios.link/nvQp
• Mark Carney, former central bank governor for the U.K. and Canada, joined Brookfield Asset Management as head of sustainable investments. http://axios.link/lzUj
• Brian Demmert joined the corporate debt advisory group of Reedland Capital Partners as a managing director. He previously was with Armentum Partners. www.reedland.com
• Saudi Aramco said Mahdi Aladel will lead its new $500 million VC fund. Aladel previously led Aramco’s producer’s base oils and lubricants unit. http://axios.link/6LId
- Go deeper: Small biz expects longer impact
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