Axios Pro Rata

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January 18, 2022

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Top of the Morning

Illustration of a food delivery bag, with a dollar stapled to it instead of a receipt.
Illustration: Brendan Lynch/Axios

Gopuff is telling prospective investors that its model is more Amazon than Uber, as it seeks to fill out a $1 billion convertible note offering, according to confidential materials viewed by Axios.

Why it matters: There's widespread skepticism that instant delivery can profitably scale, despite massive investment and customer adoption.

By the numbers: Gopuff generated more than $2 billion in revenue last year, with around a $500 million EBITDA loss.

  • It had 578 micro-fulfillment centers at year-end, up from 383 in 2020, including 38 outside the U.S. and 98 that are in the process of being converted. Opening a new MFC costs Gopuff around $200k, including cap-ex and inventory.
  • The Philadelphia-based company also says it has more than three million users who bought within the past year, and that its service covers around 30% of the U.S. population.
  • It has more than 400 alcohol licenses in over 30 states, Given that the number of alcohol licenses is typically fixed, it could mean something of a moat for Gopuff against Amazon and Walmart. On the other hand, we're also in an environment when lots of restaurants are going under, thus putting their licenses back on the block.

Pricing: Gopuff was most recently valued by VCs at $15 billion, and the new note comes with a convert price of up to $40 billion.

  • Previously-undisclosed investors include Alibaba co-founder Joe Tsai.

The argument: Gopuff is pushing hard on its vertical integration, harkening back to the Amazon vs. eBay model debates. In this case, Gopuff is Amazon (own warehouses, etc.) and Uber/DoorDash are eBay (third party sellers).

  • The materials claim that all of its MFCs launched in 2017 or earlier are generating at least 10% quarterly EBITDA (Philly is above 15%). The figure is 66% for MFCs launched in 2018, 34% for 2019 and 26% for 2020.
  • It also claims a 14.2% per order profit for the 2017 and earlier markets, working out to $3.67. For 2020, those figures are 4.9% and $1.32.

The bottom line: Every delivery company has hyped mature market profitability, and argued that losses are tied to new growth. The question going forward for investors is if Gopuff has actually cracked the code, particularly as the pandemic may have permanently changed some consumer shopping behaviors.


An image of the Microsoft logo being lifted by balloons.
Illustration: Aïda Amer/Axios

Microsoft (Nasdaq: MSFT) agreed to buy Activision Blizzard (Nasdaq: ATVI) for $68.7 billion in cash, or $95 per share (45% premium to Friday's closing price).

Why it's the BFD: This is the largest-ever acquisition of a video game maker, by dollar amount. It's also the largest purchase ever by Microsoft, topping the $26.2 billion it paid for LinkedIn in 2016 (let alone the $2.5 billion it paid in 2014 for Minecraft maker Mojang).

What's next: Expect antitrust regulators to take a hard look, even though Microsoft has avoided much of the political PR aimed at its Big Tech peers.

The bottom line: "Microsoft's move puts into new light recent comments from Xbox gaming chief Phil Spencer about Activision's workplace problems, and his reticence to explicitly criticize Activision CEO Bobby Kotick. It also bolsters Microsoft's growing all-you-can-play Game Pass service, which the company says now has 25 million subscribers and to which will now add Activision Blizzard titles." — Stephen Totilo, Axios Gaming

Venture Capital Deals

Exotec, a French warehouse robotics company, raised $335m in Series D funding at a $2b valuation. Goldman Sachs led, and was joined by insiders 83North and Dell Technologies Capital.

Dream Games, a Turkish casual games developer whose titles include Royal Match, raised $255m in Series C funding at a $2.75b valuation. Index Ventures led, and was joined by BlackRock, Kora and Balderton Capital.

Wayve, a British self-driving software startup, raised $200m in Series B funding from D1 Capital Partners, Moore Strategic Ventures and Linse Capital and insider Microsoft.

🚑 Verana, an S.F.-based database for drug and medical device development, raised $150m. J&J and Novo Nordisk co-led, and were joined by GV, Merck, Casdin Capital, Brook Byers, THVC and Breyer Capital.

Rain Financial, a Bahrain-based crypto brokerage, raised $110m in Series B funding at a $500m valuation. Kleiner Perkins and Paradigm co-led, and were joined by Coinbase Ventures, Global Founders Capital, MEVP, Cadenza Ventures, JIMCO and CMT Digital.

Spendesk, a French corporate spend management platform, raised €100m in Series C funding at a valuation north of €1b. Tiger Global led, and was joined by General Atlantic, Eight Roads Ventures, Index Ventures and eFounders.

INDmoney, an Indian super finance app, raised $75m at around a $600m valuation co-led by Tiger Global, Steadview Capital and Dragoneer.

Spyke, a Turkish social casual gaming startup, raised $55m from Griffin Gaming Partners.

Pinwheel, a New York-based payroll API, raised $50m in Series B funding at a $500m valuation. GGV Capital led, and was joined by First Round Capital, Coatue, Upfront Ventures, American Express, Indeed, Kraken Ventures and Franklin Templeton.

Arya, an Indian storage, sales and credit marketplace for farmers, raised $46m in Series C funding co-led by Asia Impact SA, Lightrock India and Quona Capital.

Clockwise, an SF-based time management and calendar tool, raised $45m in Series C funding. Coatue led, and was joined by Atlassian Ventures and insiders Accel, Greylock Partners and Bain Capital Ventures.

Flex, a South Korean HR management platform, raised $32m in Series B funding at a $287m valuation. Greenoaks led, and was joined by DST.

Asaak, a Ugandan asset financing startup, raised $30m in equity and debt funding from Resolute Ventures, Social Capital, HOF Capital, Founders Factory Africa, End Poverty Make Trillions and Decentralized VC.

Pao Internet, a Kenyan low-cost ISP, raised $28m in Series C funding. Africa50 led, and was joined by Novastar Ventures.

Vertical Future, a London-based vertical farming startup, raised £21m in Series A funding from Pula Investments, Gregory Nasmyth, Nickleby Capital, Dyfan Investment and SFC Capital.

7bridges, a London-based supply chain logistics automation startup, raised $17m. Eight Roads led, and was joined by Local Globe, Crane Venture Partners and Maersk.

Verica, a Washington, D.C.-based continuous verification startup, raised $12m in Series A funding. Intel Capital led, and was joined by True Ventures and Mango Capital., a Palo Alto-based cloud identity detection and response startup, raised $10m in seed funding. Point72 Ventures led, and was joined by Foundation Capital, Work-Bench, 11.2 Capital and Rain Capital.

nCore Games, an Indian gaming studio, raised $10m. Animoca Brands and Galaxy Interactive co-led, and were joined by Polygon and Hyperedge Capital.

Payflow, a Spanish salary advance startup, raised $9.1m in Series A funding. Seeya Ventures and Cathay Innovation co-led, and were joined by Force Over Mass Capital, Y Combinator and Rebel Fund.

Burnt Finance, a decentralized auction protocol built on the Solana blockchain, raised $8m in Series A funding led by Animoca Brands.

Mio, a Vietnamese social commerce startup, raised $8m in Series A funding. Jungle Ventures led, and was joined by Patamar Capital and insiders GGV Capital, Venturra, Hustle Fund and iSEED SEA.

Float, a Ghanaian provider of business cashflow solutions, raised $7m in equity co-led by Tiger Global and JAM Fund. It also secured $10m in debt from Cauris.

🚑 Botanical Solution, a Davis, Calif.-based provider of botanical materials for ag and pharma applications, raised $6.1m in Series A funding led by Otter Capital.

Zowie, a Dover, Del.-based e-commerce customer service tool, raised $5m in seed funding co-led by Gradient Ventures and 10xFounders.

Rebundle, a St. Louis-based maker of plant-based hair extensions, raised $1.4m led by M25.

🚑 Inflow, a London-based developer of an app to treat ADHD, raised $2.3m in seed funding led by Hoxton Ventures.

Private Equity Deals

🚑 Ardian agreed to buy a 70% stake in Italian drugmaker Biofarma Group from White Bridge Investments for around €1.1b.

•Atlantia agreed to buy Siemens' traffic lights unit for €950m.

Bain Capital is in talks to buy L.A.-based BPO outsourcing firm VXI Global from The Carlyle Group for around $2b, per Bloomberg.

  • Bain also plans to bid for a 30% stake in the benefits and rewards services unit of French food caterer Sodexo (Paris: SW), per Reuters.

Incline Equity Partners bought Alliance Environmental Group, an Azusa, Calif.-based provider of environmental remediation and indoor air quality services.

🚑 Triton sweetened its takeover offer for British pharma services company Clinigen (LSE: CLINC) to £1.3b from £1.2b.

Public Offerings

Five companies plan to go public on U.S. exchanges this week: Four Springs Capital Trust, Rhodium Enterprises, Verdant Earth Technologies, Modular Medical and Samsara Vision.

🚑 Arcellx, a Gaithersburg, Md.-based developer of cancer immunotherapies, filed for an IPO. The Phase 1 company plans to list on the Nasdaq (ACLX) and raised $330m from NEA (19.2% pre-IPO stake), SR One (15.1%), Novo Holdings (12.6%), Quan Ventures (8.3%) and Takeda (5.4%).

• Basis Global Technologies, a Chicago-based programmatic ad-buying SaaS provider, filed for an IPO. It plans to list on the Nasdaq (BASI), and reports $27m of net income on $362m in revenue for the first nine months of 2021. Backers include FTV Ventures (22.7% pre-IPO stake) and Neuberger Berman (14.3%).

Credo, a San Jose, Calif.-based chipmaker, set IPO terms to 25 million shares at $10-$12. It would have a $1.8b fully diluted valuation, were it to price in the middle, and plans to list on the Nasdaq (CRDO). The company reports a $17 million net loss on $26 million for the six months ending 10/31/21. The company raised over $200 million from firms like BlackRock, WRV Capital and Walden International.

DESRI, a New York-based renewable energy producer backed by D.E. Shaw, filed for an IPO. It plans to list on the Nasdaq (DESR) and reports $35.5m in net income on $169m revenue for the first nine months of 2021.

Genesys, a Daly City, Calif.-based call center software company owned by Permira and Hellman & Friedman, hired banks for a 2022 IPO that could value the company north of $30b, per Bloomberg.

REV Renewables, a New York-based owner and operator of energy storage and renewables generation assets, filed for an IPO. It plans to list on the Nasdaq (RVR) and reports a $53m net loss on $100m in revenue for the first nine months of 2021.

SPAC Stuff

🚑 ProKidney, a Winston-Salem, N.C.-based developer of cellular therapeutics for chronic kidney disease, agreed to go public at an implied $2.64b valuation via Social Capital Suvretta Holdings III (Nasdaq: DNAC), a SPAC led by Chamath Palihapitiya.

Tado, a German smart home energy company, agreed to go public at an implied €450m valuation via Frankfurt-listed GFJ ESG Acquisition. Tado had raised around $150m from firms like Statkraft Ventures, Inven Capoital, Amazon Alexa Fund, Kalorimeta, E.On, Telefónica and Total Carbon Neutrality Ventures.

🚑 First Digital Health Acquisition, a health tech SPAC whose co-CEOs are Justin Dearborn (PatientBond) and Jonathan Phillips (FTCP), filed for a $175m IPO.

Liquidity Events

🍔 Affinity Equity Partners is seeking a buyer for its Burger King business in Japan and South Korea, which could fetch more than $1b, per Reuters.

🚑 Cinven hired Citigroup and JPMorgan to find a buyer for Envirotainer, a Swedish medical freight firm that could fetch around €3b, per Bloomberg.

More M&A

Unilever (LSE: ULVR) said it will continue to pursue a takeover of GlaxoSmithKline's (LSE: GSK) consumer unit, which includes Advil painkillers and Sensodyne toothpaste, after being rejected on three bids — the last of which was worth around $68 billion. GSK, meanwhile, still says it plans to list the unit this year.

Macellum Advisors said that Kohl's Corp. (NYSE: KSS), in which it holds around a 5.3% stake, should explore a sale or other strategic alternatives if it’s "unwilling to pursue improvements."

  • "A Kohl's sale is not unreasonable since its enterprise value is 3X EBITDA and rival JCPenney is private with access to brands like Reebok and Eddie Bauer. That said, partners like Sephora may still have their say and institutional investors are not in lockstep with management." — Richard Collings, author of the Axios Pro retail deals newsletter.

Houghton Mifflin Harcourt (Nasdaq: HMHC), a Boston-based educational materials publisher whose market cap just topped $2b, is seeking a buyer, per Bloomberg. It had been passed around private equity hands until its 2013 IPO.

Telenor (Oslo: TEL) agreed to sell its remaining 51% stake in Myanmar mobile financial services firm Wave Money to Singapore-listed Yoma Strategic Holdings for $53m.


Blackstone raised $8.75b for its fourth capital opportunities fund.

• Blossom Capital, a London-based early-stage VC firm, raised $432m for its third fund.

• said that it’s expanded its corporate VC arm to $500m from $200m.

• Cowboy Ventures has secured around $76m for its $125m-targeted fourth fund, per an SEC filing.

• Decibel Partners, an independent VC firm formed in partnership with Cisco, is raising $275m for its second fund, per an SEC filing.

FTX, the crypto exchange recently valued at $25b by venture capitalists, announced a $2b VC fund.

Jefferies (NYSE: JEF) is abandoning efforts to raise $1b to buy passive ownership stakes in private equity firms, per Reuters.

Lerer Hippeau Ventures is raising $140m for its eighth flagship fund and $100m for its fourth "select" fund, per SEC filings.

NextView Ventures of Boston is raising $125m for its fourth fund, per an SEC filing.

It's Personnel

António Horta Osório resigned as chairman of Credit Suisse, following an investigation into COVID policy violations. He’d only been in the role for nine months, and will be replaced by Axel Lehmann.

Mei-ni Yang joined Ontario Teachers' Pension Plan as a Hong Kong-based director for private capital funds. She previously led Asia-Pacific private equity for Mercer.

Amplify Partners promoted Sarah Catanzaro to general partner, Renee Shah to partner and Natasha Katoni to operating partner.

Ara Partners promoted James Wang to managing director.

Lindsay Goldberg promoted Vincent Ley and Ali Nensi to partners and Winnie Liu to principal.

O2 Investment Partners promoted Luke Plumpton to managing partner, Joe Vallee to partner and both Jimmy Frye and Michael Cotant to VPs.

Final Numbers: VC valuation inflation

VC valuation chart.
Source: PitchBook-NVCA Venture Monitor. * as of 12/31/21.

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