Dec 19, 2017

Axios Pro Rata

A reminder that you're invited to a pair of News Shaper interviews this week in D.C. Tomorrow morning I'll join Mike Allen to kick off his interview with top White House economic advisor Gary Cohn, during which they'll discuss the tax plan and 2018 agenda. Then, on Thursday morning in D.C., Mike and Sen. Mark Warner will discuss the latest on Mueller's investigation. To RSVP for Wednesday's event, click here. For Thursday's, click here.

Top of the Morning

IPO Go: Kia writes that 2017 was a year of change and sluggishness for tech IPOs, against a backdrop of record-high stock market prices.

  • Why so complicated: The arrival of alternative mechanisms, rocky performances from some high-profile issuers (e.g., Snap, Blue Apron), the arrival of deep-pocketed SoftBank, and a renewed public market emphasis on profitability over growth. Read more.

From the filings: TPG Capital filed a pre-merger notice related to Uber. The firm isn't commenting, but my understanding is that this move gives TPG the option to buy into the SoftBank-led tender, but isn't a commitment to do so.

  • Timing reminder: The tender period ends on December 28.

Speaking of TPG: The firm this morning confirmed that it, alongside insurer Humana and private equity firm Welsh, Carson, Anderson & Stowe, are buying out home healthcare company Kindred for around $800 million (or $4.1 billion, including assumed debt). Some context, from Axios' Bob Herman:

  • Why it matters: The deal would combine one of the largest Medicare insurers with a company that treats a lot of seniors at home. It's also another example of the rapid consolidation in healthcare as companies try to gain negotiating clout and combine businesses with the hope of lowering health care costs.
  • Context: Kindred acquired Gentiva Health Services, a home health and hospice operator, in 2014 after protracted hostile negotiations. The companies claimed the merger had "compelling strategic rationale and industrial logic," but Kindred has since been sold for parts.

• Show of hands: Sens. Susan Collins and Mike Lee both said yesterday that they will support the GOP tax plan, thus virtually assuring its passage. President Trump could end up signing it into law by tomorrow afternoon. So a question to you, dear readers and global captains of industry: Is the tax plan positively affecting your 2018 hiring plans, or causing you to increase wages? Shoot me an email ( either way...

• Record player: Global VC investment has hit an all-time record in terms of dollars, even though deal count and fundraising is down from 2016. A few additional notes:

  • Fewer startups are raising money, but the round sizes are getting appreciably larger. For example, though mid-October, eight companies had raised rounds of $500 million or more.
  • There has been a boom in fundraising by Chinese startups, partially driven by an increase in local capital sources.
  • U.S. venture investment has hit $81.2 billion, which still trails dotcom-era totals from 2000.
  • Go deeper: Seed deals are being driven down by unicorns staying private longer. And maybe by ICOs too.

Lemonade, a mobile-first digital insurer for homeowners and renters, has raised $120 million in Series C funding. SoftBank Group led, and was joined by return backers Aleph, Allianz, General Catalyst, GV, Sequoia Capital, Sound Ventures, Thrive Capital, Tusk Ventures and XL Innovate. Sources put the pre-money valuation at between $450 million and $500 million, although one adds that the specific number "is complicated."

  • Why it's the BFD: Because SoftBank appears to have developed a property tech thesis, which could ultimately mean anything from partnerships to consolidation. Today's Lemonade news comes just weeks after the Japanese giant (via its Vision Fund) plugged $450 million into real estate platform Compass and three months after its massive WeWork investment.
  • Bottom line: "Lemonade is a fully licensed insurance carrier that underwrites its own policies, unlike many other entrants into the growing insurtech space. With a focus on homeowners and renters, Lemonade strives to differentiate itself in a number of ways, including by cutting bureaucracy and speeding up the application process. However, the company also touts its morals through an annual 'giveback' scheme through which it donates all unclaimed money to good causes." — Paul Sawers, VentureBeat
Venture Capital Deals

🚀 ExPace Technology, a Chinese commercial space company, has raised around $180 million in Series A funding.

🚑 Respicardia, a Minnetonka, Minn.-based maker of devices to treat central sleep apnea, has raised $58.5 million in funding led by Zoll Medical Corp.

• Daily Harvest, a New York-based subscription service that provides frozen, plant-based, one-step prep foods, has raised $43 million in Series B funding. Lightspeed Venture Partners led, and was joined by VMG Partners, M13, Bobby Flay, Shaun White and Haylie Duff. [Yes, I believe that is the first-ever Haylie Duff mention in Pro Rata.]

🚑 Bigfoot Biomedical, a Milpitas, Calif.-based developer of connected insulin delivery optimization solutions for Type 1 diabetics, has raised $37 million in a first close of its Series B round. Janus Henderson Investors and return backer Quadrant Capital Advisors co-led, and were joined by Cormorant Asset Management, Senvest, Visionnaire Ventures, JDRF T1D Fund and T1D Exchange.

• SolidEnergy Systems, a Woburn, Mass.-based lithium-metal battery company, has raised $30 million in Series C funding. Existing backers include Temasek, Applied Ventures, General Motors and Vertex Ventures China.

• Fyusion, a San Francisco-based developer of 3D vision technologies, has raised $22 million in Series B funding from Presence Capital, 2020, NTT DOCOMO Ventures, Colopl, Gionee and return backer NEA.

• Label Insight, a Chicago-based data-as-a-service startup for the consumer packaged goods market, has raised $21 million in Series C funding. Delta-v Capital led, and was joined by River Cities Capital funds.

• Leadspace, an Israeli B2B audience management platform, has raised $21 million in Series C funding. Arrowroot Capital led, and was joined by return backer Jerusalem Venture Partners.

• SendBird, a Redwood City, Calif-based provider of chat API and messaging SDK for in-app chat and messaging, has raised $16 million in Series A funding. Shasta Ventures and August Capital co-led, and were joined by return backers Y Combinator and FundersClub.

• DigitalGenius, a San Francisco-based provider of AI solutions for the customer service market, has raised $14.75 million in Series A funding. Global Founders Capital led, and was joined by MMC Ventures, Paua Ventures, Kairos Capital and return backers Salesforce Ventures, Spider Capital, Runa Capital, RRE Ventures, Lumia Capital, Compound and Lerer Hippeau Ventures.

• Springboard, a San Francisco-based online provider of tech skills training, has raised $9.5 million in Series A funding. Costanoa Ventures led, and was joined by Learn Capital, Jyoti Bansal (Appdynamics founder) and return backers Blue Frog Capital, and Moneta Ventures.

• Tovola, a Chicago-based provider of smart ovens and meals to go in them, has raised $9.2 million in Series B funding. Origin Ventures led, and was joined by Pritzker Group Venture Capital, Y Combinator and individual angels.

🚑 Bigfinite, a San Francisco-based provider of data analytics and AI solutions for optimizing pharma manufacturing, has raised $8.5 million in seed funding from Crosslink Capital, Uncork Capital, La Famiglia, Industry Ventures and Krohne.

• AxleHire, a Berkeley, Calif.-based provider of last-mile logistics for fresh food delivery outfits, has raised $4.3 million from firms like Acorn Pacific and RGA Ventures.

• Ataata, a Bethesda, Md.-based cybersecurity training platform, has raised $3 million in Series A funding. Next Frontier Capital led, and was joined by TEDCO, 2M, SaaS Ventures and ARRA Capital.

• Fiit, a London-based social workout app, has raised £2.4 million in seed funding led by Connect Ventures.

• Heretik, a Chicago-based provider of contract review software, has raised $2.4 million in seed funding. Corazon Capital led, and was joined by return backers Chicago Ventures and Relativity.

🚑 🚑 Luna DNA, a San Diego-based genomics platform "powered by blockchain," has raised $2 million in seed funding from individual angels.

Private Equity Deals

🌮Apollo Global Management has agreed to acquire Tex-Mex fast casual chain Qboda from Jack in the Box (Nasdaq: JACK) for $305 million.

🚑 Audax Private Equity has acquired Belmont Instrument Corp., a Billerica, Mass.-based maker of rapid fusion systems for critically-injured patients experiencing material blood loss.

• Canada Pension Plan Investment Board and GIC each have held talks about acquiring a 21% stake in Indian real estate developer RMZ from Baring Private Equity Partners India, according to Mint.

🚑 The Carlyle Group has agreed to acquire a majority stake in MedRisk, a King of Prussia, Penn.-based provider of physical medicine and diagnostic imaging services to the workers' compensation market, from TA Associates.

• Feihe International, a Chinese dairy products company whose backers include Morgan Stanley Private Equity Asia, has agreed to acquire bankrupt nutritional supplements retailer Vitamin World out of bankruptcy for $28 million, according to Reuters. The Bohemia, N.Y.-based company had filed for Chapter 11 protection back in September, after having been acquired in early 2016 by Centre Lane Partners.

• Maysteel Industries, an Allentown, Wis.-based portfolio company of Littlejohn & Co., has acquired DAMAC Products, a La Marada, Calif.-based manufacturer of custom data center infrastructure equipment. Sellers include Prairie Capital.

• TA Associates has acquired a minority equity stake in Flexera, an Itasca, Ill.-based provider of application usage management solutions that is majority owned by Ontario Teachers.

🚑 TA Associates has made a growth equity investment in Healix, a Sugar Land, Texas-based provider of alternate-site infusion therapy management services.

Public Offerings

Pinnacle Renewable Energy, a Canadian wood pellets producer owned by Onex Corp., has filed to raise upwards of C$175 million in an IPO on the Toronto Stock Exchange.

Liquidity Events

• Parthenon Capital Partners has agreed to sell Cayan, a Boston-based provider of payment technologies, for $1.05 billion in cash to Total System Services (NYSE: TSS).

More M&A

• Campbell Soup Co. (NYSE: CPB) has agreed to acquire snack-maker Snyder's Lance (Nasdaq: LNCE) for approximately $4.87 billion, or $50 per share in cash.

• Didi Chuxing, the Chinese ride-hailing giant, has agreed to acquire third-party payment services group 19Pay for around $45 million from Shanghai-listed GoHigh Data Networks Technology.

• Houlihan Lokey said that it has "onboarded" the M&A advisory practice of Bluestone Capital Partners, a boutique investment bank focused on the aerospace, defense and government services sector.

• McDermott International (NYSE: MDR) has agreed to acquire Chicago Bridge & Iron (NYSE: CBI) in an all-stock deal that values CBI's equity at around $1.86 billion.

• Ola, an Indian ride-hailing company, has acquired the Foodpanda business in India from Germany's Delivery Hero, in an all-stock deal.

• Penn National Gaming (Nasdaq: PENN) has agreed to acquire Las Vegas-based casino company Pinnacle Entertainment (Nasdaq: PNK) for $2.8 billion in cash and stock.

• Starboard Value disclosed a 9.9% stake in (NYSE: CARS).

• TEGNA (NYSE: TGNA) has agreed to acquire a CBS-affiliated television station and two radio broadcast stations in San Diego from Midwest Television for $325 million in cash.

🚑 Tenet Healthcare (NYSE: THC) said that it will explore a sale of Conifer, a unit that provides technology and financial services to hospitals and other healthcare providers.


• Inventure, a Finland-based early-stage VC firm, has raised €110 million for its third fund.

• Qualium Investissement, a French buyout group that spun out of Groupe Caisse des Dépôts, has held a €370 million first close for its second fund. Triago is serving as placement agent.

• Symphony Technology Group is raising up to $850 million for its fifth fund, per an SEC filing.

It's Personnel

• Aspect Ventures has promoted Lauren Kolodny to partner.

🚑 Ronald Geraty, former CEO of AxisPoint Health and Alere, has joined Varsity Healthcare Partners as an operating partner.

• Taylor Greene is stepping down as a partner with Lerer Hippeau Ventures, where he has worked since 2013. No word yet on his future plans. The firm also is promoting Graham Brown to partner, Andrea Hippeau to principal and Julian Moncada to senior associate.

🚑 Susan Kilsby, chair of Shire PLC, has joined Star Mountain Capital as an advisor to the firm's healthcare and consumer industry practices. She also has made a personal investment into the firm.

• Amy Margolis has joined CI Capital Partners as head of business development. She previously was a principal on the origination team of The Riverside Company.

• Matthew Savino has joined The Carlyle Group as a managing director and head of U.S. capital markets. He previously was with BlackRock as global head of alternatives sourcing and former co-head of global capital markets.

• Inoki Suarez has joined The Carlyle Group as a managing director of private credit. He previously was with Varagon Capital Partners as co-head of general industries.