Dec 11, 2020

Axios Pro Rata

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Top of the Morning

Illustration: Eniola Odetunde/Axios

There's been more than $125 billion in SPAC merger activity this year, more than quadrupling the 2019 total. And it's only expected to accelerate in 2021.

Driving the news: Three new SPAC mergers were announced in the past 24 hours, totaling over $3.6 billion, all in the vehicle space. Plus, nine new SPACs priced IPOs, raising a combined $2 billion.

The big picture: Both supply and demand are overflowing — hundreds of unicorns and even more near-unicorns with more than 225 SPACs are actively seeking targets.

  • Then throw in a deep-pocketed group of active PIPE investors, albeit a few who've gotten more selective of late, new SPAC formations each day, and a vibrant leveraged loan market.

What we don’t know is if this is sustainable.

  • Sure, everyone’s jumping into the pool now, including VC firms in a show of buyout envy reciprocity, but this isn’t anyone’s core business (except, maybe, Michael Klein). If there’s some sort of regulatory crackdown from Biden’s SEC or a few big blowups scare off new investors from blank-check IPOs, then the SPAC market could shrink as fast as it expanded.
  • Bankers say they aren’t worried, because there’s so much variety in what SPACs ultimately buy. And there’s some truth to that, but there’s been a very heavy concentration so far in the conceptual EV/AV space.

It's long been said (including by me) that private markets follow public markets. In 2020, however, the reverse has been true.

  • Public equities investors act like venture capitalists, eschewing current fundamentals for five-year TAM projections.
  • And, with SPACs, they are buying into blank check structures that mimic buyout funds, albeit with worse LP economics and no portfolio diversity.

The bottom line: It's the new normal. For now.

The BFD

Illustration: Rebecca Zisser/Axios

ByteDance is closing in $2 billion in new funding co-led by KKR and existing backer Sequoia Capital at a $180 billion valuation, per Reuters.

  • Why it's the BFD: This would cement China-based ByteDance as the world's most valuable VC-backed company, worth 3X the next-largest unicorn, and comes despite the U.S. government's efforts to force its divestiture of TikTok.
  • The bottom line: "In its home market, [ByteDance] is on track to rake in at least 180 billion yuan ($27.2 billion) in advertising revenue this year... Douyin, ByteDance’s Chinese version of TikTok, said it had amassed 600 million daily users in August." — Reuters
Venture Capital Deals

Grove Collaborative, a San Francisco-based household products marketplace, raised $125 million at a $1.32 billion post-money valuation. Backers include Morgan Stanley’s Counterpoint Global, Sculptor, NextView Ventures and Glynn Capital Management. http://axios.link/gDj3

Tink, a Swedish open banking platform, raised €85 million at a €680 million post-money valuation. Eurazeo Growth and Dawn Capital co-led, and were joined by PayPal Ventures, HMI Capital, Heartcore, ABN AMRO Ventures, Poste Italiane and BNP Paribas. http://axios.link/nKkx

🚑 Rani Therapeutics, a San Jose, Calif.-based developer of a “robotic pill” for drug delivery, raised $69 million in Series E funding from undisclosed investors. http://axios.link/0Tiw

🚑 CG Oncology, an Irvine, Calif.-based developer of immunotherapies for bladder cancer, raised $47 million in Series D funding. Kissei Pharmaceutical led, and was joined by return backers ORI Healthcare Fund, Camford Capital and Perseverance Capital Management. http://axios.link/8YnU

🦍 Gorillas, a German grocery delivery startup, raised $44 million in Series A funding led by Coatue. http://axios.link/d2df

Turing, a Palo Alto-based talent platform, raised $32 million in Series B funding led by WestBridge Capital. http://axios.link/spW6

Fairmarkit, a Boston-based sourcing platform for large enterprises, raised $30 million in Series B funding. GGV Capital and Insight Partners co-led, and were joined by 1984 VC, New Stack and NewFund. http://axios.link/tFVJ

Gorgias, a San Francisco-based customer support startup, raised $25 million in Series B funding at a $300 million pre-money valuation. Sapphire Ventures led, and was joined by SaaStr, Alven, Amplify Partners, CRV and Greycroft. http://axios.link/AVhR

Boast.ai, a Vancouver-based provider of R&D tax automation software, raised $23 million in Series A funding led by Radian Capital. http://axios.link/OJh0

🚑 PrinterPrezz, a San Francisco-based med device 3D printing startup, raised $16 million in Series A funding. D. One Vision Management led, and was joined by Boutique Venture Partners, Berkeley Catalyst Fund and Solvay Ventures served as strategic investor. http://axios.link/Qrle

Iralogix, a Pittsburgh-based provider of white-label IRA products, raised $7.5 million in Series B funding. Great North Labs led, and was joined by Trog Hawley Capital, Riverfront Ventures, and Circadian Ventures. http://axios.link/M316

CarDr.com, a Chicago-based vehicle health info startup, raised $5 million from Red Fort Capital. www.cardr.com

Valuedesk, a German corporate savings management startup, raised €3.2 million led by UVC Partners. www.valuedesk.de

Cosmos Video, a “Club Penguin for adults," raised $2.6 million in seed funding led by LocalGlobe. http://axios.link/PS8v

Dobby, a Washington, D.C.-based home maintenance platform, raised $1.7 million in seed funding led by Dundee VC. www.hellodobby.com

Private Equity Deals

Abracon, a Spicewood, Texas-based portfolio company of The Riverside Company, acquired Fox Electronics, a Fort Myers, Fla.-based maker of synchronization components. www.abracon.com

Advent International is in advanced talks to buy the plexiglass unit of France’s Arkema (Paris: AKE) for more than €1 billion, per Bloomberg. http://axios.link/MRzr

Calisen (LSE: CLSN), a British energy infrastructure company, agreed to be taken private for £1.43 billion by an investor group that includes BlackRock, Goldman Sachs and Mubadala. http://axios.link/tV67

CallRail, an Atlanta-based marketing and analytics platform, raised $56 million from existing backers Sageview Capital and Leaders Fund. www.callrail.com

CVC Capital Partners agreed to buy Irrawady Green Towers, a Myanmar-based telecom tower operator for around $700 million, per Reuters. Sellers include Blu Stone Management. http://axios.link/FQm8

🚑 Freeman Spogli acquired US Med-Equip, a Houston-based renter and seller of movable medical equipment. www.usme.com

Main Post Partners invested in Duke Cannon, a Wayzata, Minn.-based DTC men’s grooming products company. www.dukecannon.com

New Mountain Capital acquired Tinuiti, a New York-based performance marketing firm, from Mountaingate Capital. www.tinuiti.com

Norwest Equity Partners agreed to buy Red Monkey Foods, a Springfield, Mo.-based provider of salts and organic spices & seasonings, from SF Equity Partners. www.redmonkeyfoods.com

Quad-C Management agreed to buy Learners Edge, an Eagan, Minn.-based provider of online professional development courses, from L Squared Capital Partners. www.learnersedge.com

Resource Label Group, a Franklin, Tenn.-based portfolio company of First Atlantic Capital and TPG Growth, acquired Labels West, a Seattle-based provider of labels to the wine, spirits, health and beauty, food and nutraceutical industries. www.resourcelabel.com

Public Offerings

🚑 AbCellera, Eli Lilly's partner on a monoclonal antibody treatment for COVID-19, raised $483 million in an upsized IPO. It priced at $20 per share for an initial market cap of $5.3 billion, will trade on the Nasdaq (ABCL) and raised over $100 million in VC funding from firms like DCVC (12.4% pre-IPO stake), Viking Global (8%) and Founders Fund. http://axios.link/jD8a

🚑 Certara, a Princeton, N.J.-based drug development consultancy owned by EQT Partners, raised $668 million in its IPO. The company priced 29.1 million shares at $23, versus plans to offer 24.4 million shares at $19-$22, for an initial market cap of $3.5 billion. It will list on the Nasdaq (CERT), used Jefferies as left lead underwriter, and reports $5 million of net income on $179 million in revenue for the first nine months of 2020. http://axios.link/gSmf

🚑 Nanobiotix, a French developer of nanoparticle therapies for cancer, raised $99 million in its U.S. float (Nasdaq: NBTX). It will continue to trade on the Euronext Paris (NANO). http://axios.link/qasu

SPAC Stuff

EV Charged, an e-vehicle charging unit of listed French utility Engie, agreed to go public via a reverse merger with TPG Pace Beneficial Finance (NYSE: TPGY) at a $1.4 billion valuation. http://axios.link/ZB2F

Innoviz Technologies, an Israeli developer of lidar sensors, agreed to go public via reverse merger with Collective Growth Corp. (Nasdaq: CGRO) at a $1.4 billion valuation. It had raised $264 million from firms like China Merchants Capital, Shenzhen Capital Group, New Alliance Capital, Harel Insurance Investments and Financial Services and Phoenix Insurance Co. http://axios.link/LB5F

Lightning EMotors, a fleet electrification startup, agreed to go public via a reverse merger with GigCapital3 (NYSE: GIK), at a valuation of around $823 million. Lightening EMotors had raised around $27 million from backers like BP Ventures. http://axios.link/SVNF

CBRE Acquisition Holdings, a SPAC sponsored by commercial real estate giant CBRE, raised $350 million in its IPO. http://axios.link/4CoO

Delwinds Insurance Acquisition, an insurance-focused SPAC formed by The Gray Insurance Co., raised $175 million in its IPO. http://axios.link/QA5M

EdtechX Holdings Acquisition, an ed-tech-focused SPAC formed by IBIS Capital, raised $100 million in its IPO. http://axios.link/kwTZ

Globis Acquisition, an economic globalization-focused SPAC formed by Globis Capital Advisors and Chardan, raised $100 million. http://axios.link/MUtp

Gores Holdings VI, a SPAC formed by The Gores Group, raised $300 million in its IPO.

Motive Capital, a fintech-focused SPAC formed by Motive Partners, raised $360 million in its IPO. http://axios.link/UMhZ

Roth CH Acquisition II, a SPAC formed by execs at Roth Capital and Craig-Hallum, raised $100 million in its IPO. http://axios.link/qQkP

Senior Connect Acquisition I, a senior market-focused SPAC formed by former UnitedHealth CEO Richard Burke, raised $360 million in its IPO. http://axios.link/OtgD

Thayer Ventures Acquisition, a travel and transport-focused SPAC formed by Thayer Ventures, raised $150 million. http://axios.link/e5Ji

Liquidity Events

Stratasys (Nasdaq: SSYS) agreed to buy Origin, a San Francisco-based 3D printing startup, for up to $100 million in cash and stock. Origin had raised around $12 million from firms like Floodgate, Haystack, Liquid 2 Ventures and OATV. http://axios.link/r8Pf

TechTarget (Nasdaq: TTGT) agreed to buy BrightTalk, a San Francisco-based video marketing platform for webinars and virtual events. Sellers include Guidepost Growth Equity. http://axios.link/PATV

Wolters Kluwer (Amst: WKL) agreed to buy eOriginal, a Baltimore-based provider of residential mortgage lending software, for around €231 million. Sellers include LLR Partners. http://axios.link/e8kk

More M&A

Source: Giphy

Hyundai Motor Group agreed to buy an 80% stake in robotics company Boston Dynamics from SoftBank at a $1.1 billion enterprise value. http://axios.link/nams

LVMH is seeking a buyer for men’s clothing brand Thomas Pink, per The Evening Standard. http://axios.link/S8qr

MetLife (NYSE: MET) agreed to sell its U.S. property and casualty insurance business for $3.94 billion to Zurich Insurance Group and Los Angeles-based Farmers Exchanges. http://axios.link/iO4m

Repsol (BME: REP), a Spanish energy company, is seeking to sell a 25% stake in its client business unit for around €2.5 billion, per Cinco Dias. http://axios.link/klBw

Fundraising

GoldPoint Partners, an affiliate of New York Life, raised $556 million for its fifth private debt fund, per an SEC filing. http://axios.link/ENI6

It's Personnel

Miles Grimshaw is switching venture shops, leaving Thrive Capital to become a general partner with Benchmark.

  • He'll relocate from New York to San Francisco, and serve as Benchmark's fifth actively investing partner (the quintet was one short after Bill Gurley pulled back).

Sandbox Industries promoted Gretchen Hayes to managing director. www.sandboxindustries.com

Final Numbers
Source: Refinitiv Deals Intelligence. Data through Dec. 10, 2020.

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