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"Do you know what happened at Zoox?"

I got that question from nearly a dozen VCs last night, after it was reported that the self-driving unicorn's co-founder and CEO Tim Kentley-Klay had been fired.

  • The inquiries were not only because Zoox raised $500 million just one month ago, but also because Kentley-Klay had gone on a subsequent Twitter rant about how his ouster was "Silicon Valley up to its worst tricks."

So I reached out to a different dozen people to ask: "Do you know what happened at Zoox?" Here's what I learned, from sources who declined to give names due to fears that this situation could turn litigious:

  • The board fired Kentley-Klay because of what is described to me as an abrasive and uncompromising personality, not about any sort of fraud, misappropriated funds or sexual harassment.
  • Issues came to a head during fundraising, with new investors (and prospective new investors) expressing concerns over keeping Kentley-Klay in charge. It does not appear that a CEO change was part of the actual term sheet, but the financing process effectively sealed his fate.
  • For a better sense of Kentley-Klay, this Ashlee Vance piece from June is a must-read.
  • Kentley-Klay tweeted that he was canned "without warning, cause or right of reply." I've not been able to get total clarity on this, but one source says it's technically possible. "Someone with at least a minimum EQ would have realized the reality of his deteriorating relationship with the board and management."
  • Even if that's true, it's pretty remarkable that he wouldn't have first received some sort of formal warning. That next board meeting will be pretty awkward, since Kentley-Klay does remain a director.
  • Kentley-Klay is given credit by most for his design acumen and company-building abilities, but many investors believe the "tech rock-star" is fellow co-founder Jesse Levinson (who was promoted from CTO to president, as the company will search for a new CEO). There is consensus insistence that the tech at Zoox — which wants to build entire self-driving car from scratch — is legit (i.e., not Theranos 2.0).
  • Bottom line, per source: "Addition by subtraction."
  • Zoox itself is keeping quiet, neither issuing a statement nor replying to requests for comment. Kentley-Klay also didn't respond to an interview request, nor to an offered opportunity to speak unedited on the podcast.

Trump to Fox News: “If I ever got impeached, I think the market would crash. I think everybody would be very poor."

Don't call it a comeback: Online lender Upgrade, which is led by former LendingClub CEO Renaud Laplanche, this morning said that it raised $62 million in Series C funding led by the VC affiliate of China's CreditEase. No valuation was disclosed, but I hear the pre-money was around $500 million.

  • In its press release, the company says it has originated over $1 billion in consumer loans and that it has expanded into products like personal credit lines.
  • Laplanche lost his LendingClub job after being found to have violated several company rules, but it appears that investors consider that to be a small ripple under the bridge.

📣 Pro Rata Podcast: Yesterday we got political, discussing the Cohen and Manafort fallout (i.e., what it means for Trump's broader agenda) with Axios CEO Jim VandeHei. Listen via Apple, Google Play or stream direct at Axios.

The BFD

Illustration: Sarah Grillo/Axios

Saudi Arabia appears to have indefinitely delayed its planned IPO for state oil company Aramco. Reuters was first to report, with a source later telling Axios: "It has been officially dead for a month or so — everyone got sent home for Ramadan and of course Eid just broke, but no one was invited back."

  • Why it's the BFD: Because this was expected to be the largest IPO in history. Plus, it would have helped further fund initiatives and investments to diversify the country's oil-dependent economy (although some of that may be filled via a separate transaction with SABIC).
  • MmmHmm: Saudi energy minister Khalid Al-Falih pushed back a bit, saying: "The Government remains committed to the IPO of Saudi Aramco at a time of its own choosing when conditions are optimum." But remember that Aramco chief Amin Nasser insisted last fall that reports of a delay beyond 2018 were bogus, and then Al-Falih said this past March that everything was still on track, even if it pushed a little ways into 2019 (just an "artificial deadline"). In other words, grains of salt all over the place.
  • Bottom line: "One obvious explanation for deferring the IPO further still is that while oil prices are far better than they were in early 2016, oil at $70-ish a barrel isn’t enough to pull the trigger. Obvious, but shallow. There’s a much bigger problem: Like Musk’s $420-a-share take-private tweet, the whole concept of the Aramco IPO was far too premature." — Liam Denning, Bloomberg
Venture Capital Deals

Latch, a New York-based maker of “smart access systems” for multifamily buildings, raised $70 million in Series B funding. Brookfield Ventures led, and was joined by Lux Capital, RRE Ventures, Primary Venture Partners, Third Prime, Camber Creek, Corigin Ventures, Tishman Speyer and Balyasny Asset Management. http://axios.link/HLyp

CassTime Technologies, a Chinese B2B platform for auto parts and accessories, raised $36 million in Series B3 funding. Mangrove Bay Capital led, and was joined by Shanghe Capital and return backers Fosun RZ Capital and Shunwei Capital. http://axios.link/OrdQ

Semmle, a UK-based startup that helps developers search within code for vulnerabilities, raised $21 million in Series B funding led by return backer Accel. http://axios.link/9twx

Robin Systems, a San Jose, Calif.-based Kubernetes implementation platform, raised $17 million in Series B funding. USAA Ventures led, and was joined by Hasso Plattner Ventures, Clear Ventures and DN Capital. http://axios.link/tfls

KoinWorks, an Indonesian P2P lending platform, raised $16.5 million in Series A funding. Bank Mandiri led, and was joined by Gunung Sewu and Convergence Ventures. http://axios.link/jlxr

Revv, an Indian on-demand car rental startup, raised $14.3 million in Series B funding from Hyundai, Dream Incubator, Telama Investment and return backers Edelweiss and Beenext. http://axios.link/IUfX

Homelike, a German marketplace for long-term business apartment rentals, raised $14 million. Spark Capital led, and was joined by return backers Cherry Ventures, Lürssen and Coparion. http://axios.link/U6nt

Simple Feast, a Denmark-based meal delivery startup focused on meat-free product in biodegradable boxes, raised $12 million in Series A funding. Balderton Capital led and was joined by 14W and return backers Sweet Capital and ByFounders. http://axios.link/IS7a

🚑 ApoGen Biotech, a Seattle-based startup focused on drug resistance by cancer cells, raised $4 million in new Series A funding led by the VC arm of Germany’s Merck (bringing the round total to $11m). www.apogenbiotech.com

Knewton, a New York-based maker of adaptive learnings products, raised $5 million in new equity funding from return backers Accel, Atomico, Bessemer Venture Partners, FirstMark Capital, First Round Capital, Founders Fund and Sofina. It also secured a $20 million debt facility from TriplePoint Capital. www.knewton.com

🌼The Sill, a New York-based online and offline seller of potted plants, raised $5 million in Series A funding led by Raine Ventures. http://axios.link/awUU

Bandura Systems, a Lake St. Louis, Mo.-based cyberthreat intelligence startup, raised $4 million in Series A funding from Grotech Ventures, Gula Tech Adventures, Cultivation Capital and the Maryland Venture Fund. http://axios.link/2hcj

Private Equity Deals

Alion, a MacLean, Va.-based portfolio company of Veritas Capital, completed its previously-announced purchase of MacB, a Dayton, Ohio-based provider of engineering and tech solutions to the national defense and intelligence communities. http://axios.link/dtTq

Clayton, Dubilier & Rice agreed to buy PowerTeam, a Plymouth, Mich.-based provider of maintenance and construction services to the U.S. utility industries, from Kelso & Co. www.powerteamservices.com

KKR is in talks to buy Magneti Marelli, the car parts unit of Fiat Chrysler, per Bloomberg. If successful, KKR would merge the business with Japanese portfolio company Calsonic Kansei. http://axios.link/EBPU

🚑 Mediware Information Systems, a Lenexa, Kan.-based portfolio company of TPG, acquired Rock-Pond Solutions, a Conway, Ark.-based provider of business intelligence and analytics software to the home infusion, infusion, home medical equipment and specialty pharmacy markets. http://axios.link/tl1k

Public Offerings

Exeter Finance, an Irving, Texas-based subprime auto lender owned by The Blackstone Group, hired investment banks to explore an IPO or possible sale, per Reuters. http://axios.link/L08f

More M&A

Daimler is in talks to buy around a 20% stake in Heycar, a German used car marketplace, from Volkswagen. http://axios.link/l4jN

UK antitrust officials have launched a formal investigation into the proposed $10 billion merger of Sainsbury’s with Walmart’s Asda, which would create the UK’s largest supermarket operator. http://axios.link/EswO

Final Numbers
Source: Preqin report, based on interviews with 530 institutional investors.

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