Axios Pro Rata

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December 07, 2021

Top of the Morning

Illustration of an angry facebook emoji that resembles Donald Trump

Illustration: Sarah Grillo/Axios

Donald Trump isn't saying who agreed to invest $1 billion into his nascent social media platform, which plans to go public via a SPAC.

Why it matters: The merger already is under investigation by both FINRA and the SEC, yet seems almost eager to invite more oversight.

  • There's no legal requirement that SPACs disclose the identities of PIPE financiers, such as the ones that just committed $1 billion to Digital World Acquisition and Trump Media Technology Group.
  • But such disclosures are industry standard, particularly when large dollars are involved. So the silence here speaks loudly.

Between the lines: One possibility for Trump's reticence is that some of the money comes from politically awkward geographies (e.g., China). Another is that the investors don't want to be publicly affiliated with the controversial former President.

  • Some readers have emailed to argue that the $1 billion maybe isn't as solid as the press release claims, although that would be a cut-and-dried fraud for which there is no evidence to support. Put another way, it would be several steps beyond Elon Musk's "funding secured" tweet.

Also worth noting:

  • Trump Media & Technology Group hadn't publicly identified a CEO until yesterday, when it appointed California congressman (and failed Twitter litigant) Devin Nunes. Still no word on a CFO or several other key C-suite positions.
  • A pitch deck filed with the SEC does identify 30 employees, but only with first names and last initials (a LinkedIn search doesn't turn up anyone who says they work for TMTG or its "Truth Social" brand).
  • It projects $3.6 billion in revenue by 2026, which would put it on par with Twitter's current business. Plus 40 million streaming subscribers by 2026, which is roughly the same size as ViacomCBS' streaming subscriber totals today.

State of play: DWAC stock was up a bit more than 4% in early trading today, to more than $45 per share, for around a $1.66 billion market cap.

The bottom line: Trump's silence on key issues speaks volumes about how this merger deal is unusual, meaning that its ultimate success or failure isn't a reflection on the broader SPAC market. But, as we've discussed previously, it could create collateral damage.

The BFD

Illustration of an upwards trending phone as a line graph

Illustration: Eniola Odetunde/Axios

Genesys, an S.F.-based cloud call center software provider led by former Skype CEO Tony Bates, raised $580 million led by Salesforce Ventures at a $21 billion valuation.

Why it's the BFD: Investors love call centers and the software that drives them, even if they drive the rest of us to despair. Among those investors is Zoom, which recently failed to buy Genesys rival Five9, after its $14.7 billion offer was rejected by Five9 shareholders.

ROI: Permira bought Genesys from Alcatel-Lucent for just $1.5 billion in 2012, and then sold around a 24% stake in 2016 to Hellman & Friedman for $900 million. Other investors in the new round include BlackRock, D1 Capital Partners and ServiceNow Ventures.

The bottom line: "While organizations were already planning to take the traditional on-premises call center systems to the cloud prior to the pandemic, the move to remote work forced many companies to make the pivot more quickly. Now, companies are trying to go a step further and link call center software with programs like customer relations systems or marketing programs." — Joseph Williams, Bloomberg

Venture Capital Deals

YipitData, a New York-based "alternative data" analytics firm, raised $475 million in Series E funding led by Carlyle. http://axios.link/xLnY

Incode Technologies, an S.F.-based identity verification and authentication platform, raised $220 million at a $1.25 billion valuation. General Atlantic and SoftBank co-led, and were joined by JPMorgan, Capital One, Coinbase and Silicon Valley CISO Investments. http://axios.link/tM5p

The Every Co., a South Sf-based developer of animal-free protein tech, raised $175 million in Series C funding. McWin led, and was joined by Rage Capital, Temasek, Wheatsheaf Group, Prosus Ventures and TO Ventures. http://axios.link/wK4R

Heap, an S.F.-based digital insights platform, raised $110 million in Series D funding at a $960 million valuation. Sixth Street Growth led, and was joined by Goldman Sachs and insiders NewView Capital, Menlo Ventures, DTCP, Triangle Peak Partners, Alliance Bernstein Private Credit Investors, Maverick Ventures and The Private Shares Fund. www.heap.io

Anyscale, an S.F.-based AI app development platform, raised $100 million in Series C funding at a $1 billion valuation. Andreessen Horowitz and Addition co-led, and were joined by insiders NEA, Intel Capital and Foundation Capital. www.anyscale.com

Liqid, a Broomfield, Colorado-based provider of data center composability software, raised $100 million in Series C funding. Lightrock and DH Capital co-led, and were joined by insiders Panorama Point Partners and Iron Gate Capital. www.liqid.com

🚑 Metis Therapeutics, a Cambridge, Mass.-based gene therapy startup, raised $86 million in Series A funding. PICC PE and China Life co-led, and were joined by Sequoia Capital China, Lightspeed and 5Y Capital. http://axios.link/2uQG

Everphone, a Berlin-based "smartphone-as-a-service" startup, raised $65 million in Series C funding. Cadence Growth Capital led, and was joined by Deutsche Telekom, AlleyCorp and Signals VC. The company also secured $135 million in debt financing. http://axios.link/hVyQ

Ironscales, an Israeli email security startup, raised $64 million in Series C funding. PSG led, and was joined by insiders K1 Investment Management and Jump Capital. www.ironscales.com

• Intellihot, a Galesburg, Ill.-based maker of tankless water heating systems, raised $50 million co-led by Aegon Asset Management and Avenue Sustainable Solutions Fund. www.intellihot.com

Torq, a Portland, Ore.-based no-code automation platform for security teams, raised $50 million in Series B funding. Insight Partners led, and was joined by SentinelOne and insiders GGV Capital and Bessemer Venture Partners. www.torq.io

GitGuardian, a Paris-based provider of code security solutions, raised $44 million. Eurazeo led, and was joined by Sapphire Ventures and insiders Balderton, BPI and Fly Ventures. www.gitguardian.com

Marketplacer, an online marketplace platform technology, raised $38 million from A Fifth Estate, Washington H Soul Patterson, Wunala Capital, Acorn Capital, Ellerston Capital, Endeavor Asset Management, Lennox Capital Partners, Mirrabooka, OC Funds, Salesforce Ventures and SG Hiscock. www.marketplacer.com

Pento, a London-based provider of payroll management software for SMEs, raised $35 million in Series B funding. Tiger Global and Avid Ventures co-led, and were joined by insiders General Catalyst, Seedcamp and LocalGlobe. http://axios.link/acUH

Hummingbird RegTech, an S.F.-based risk and compliance management startup, raised $30 million in Series B funding. Battery Ventures led, and was joined by Flourish, Homebrew and FinVC. http://axios.link/MNiB

MoEngage, a customer engagement and insights platform, raised $30 million led by SteadView Capital. http://axios.link/YHFC

Grip Security, an Israeli SaaS data security startup, raised $25 million in Series A funding. Intel Capital led, and was joined by YL Ventures. http://axios.link/SMLI

Majority, a Houston-based mobile bank for U.S. migrants, raised $27 million in Series A funding. Valar Ventures led, and was joined by fellow insiders Avid Ventures and Heartcore Capital. www.majority.com

Fable, a New York-based motion design platform for creators, raised $15 million in Series A funding. Redpoint Ventures led, and was joined by Collaborative Fund, SIP Global Partners, Harrison Metal, Third Kind Venture Capital and LightShed Ventures. www.fable.app

SpotHopper, a Milwaukee-based provider of restaurant marketing tech, raised $14 million in Series A funding led by TVC Capital. www.spothopperapp.com

Serve Robotics, a sidewalk delivery robot spinoff of Postmates, raised $13 million in seed funding from Uber (owner of Postmates), Delivery Hero, 7-Eleven and Wavemaker Partners. http://axios.link/9JeU

Tulipshare, a London-based activist investment platform, raised $10.8 million from Eurazeo, Speedinvest and Frst. www.tulipshare.com

Learnerbly, a London-based SaaS marketplace for professional development, raised $10 million in Series A funding. Beringea led, and was joined by Digital Horizon Ventures, BY Venture Partners, GO Ventures, FJ Labs, Frontline Ventures, Triple Point, London Co-Investment Fund and UFI Ventures. http://axios.link/9Fyp

Facetheory, a British DTC skincare brand, raised £10 million in Series A funding from Active Partners. www.facetheory.com

🚑 Pair Team, an SF-based operational platform for community health centers, raised $7.3 million from NTTVC, Newark Venture Partners and 8VC. www.pairteam.com

Clubbi, a Brazilian B2B online commerce platform for small food retailers, raised $4.5 million in seed funding. Valor Capital Group and ONEVC co-led, and were joined by Better Tomorrow Ventures, Latitud and Canary. http://axios.link/Wl0G

Private Equity Deals

American Industrial Partners agreed to buy substantially all the assets of Strike Inc., a Texas-based pipeline and energy infrastructure company, as part of a bankruptcy restructuring. www.strikeusa.com

Foreside Financial Group, a Portland, Maine-based portfolio company of Genstar Capital, acquired Alaric Compliance Services, a New York-based provider of regulatory and compliance services. www.foreside.com

🚑 Lightyear Capital acquired PracticeTek, a Toronto-based provider of retail healthcare software and payments solutions. Greater Sum Ventures co-invested. www.practicetek.com

Madison Dearborn Partners acquired Zilliant, an Austin, Texas-based B2B price optimization company that had raised around $70 million in VC funding from firms like Goldman Sachs, Austin Ventures, Trellis Partners, DB Capital Venture Partners, ABS Ventures, Panorama Capital, Cardinal VC and Edelman Financial Services. http://axios.link/z3an

🐔 Main Post Partners invested in Krispy Krunchy Chicken, a Lafayette, La.-based quick service restaurant chain. www.krispykrunchy.com

Onex agreed to buy Tes Global, a London-based provider of educational sector software, from Providence Equity Partners. http://axios.link/SSux

Permira agreed to buy Mimecast (Nasdaq: MIME), a London-based email security and cyber resiliency company, for around $5.8 billion, or $80 per share (6.67% premium over yesterday's closing price). http://axios.link/eemE

Tech24, a Greenville, S.C.-based portfolio company of HCI Equity Partners, acquired RMS Mechanical Services, an Ambridge, Pa.-based provider of food service and commercial HVAC equipment repair, maintenance and installation. www.mytech24.com

Wynnchurch Capital acquired the thermal coating assets of Appvion, an Appleton, Wis.-based portfolio company of Franklin Templeton Investments. www.appvion.com

Axios Pro Preview

Stone Point Capital is seeking a buyer for Enlyte, a provider of cost containment and claims software to the workers’ comp, auto and disability insurance markets, per Axios Pro reporter Sarah Pringle.

Why it matters: This is gonna be a big one, as Enlyte is said to generate around $450 million in EBITDA.

Background: Stone Point formed Enlyte via three purchases: Mitchell from KKR and Elliott Management in 2018, Genex from Apax Partners in 2018 and Coventry from Aetna in 2020.

Join the waitlist for Axios Pro.

Public Offerings

Intel (Nasdaq: INTC) said it plans to launch an IPO next year for self-driving software unit Mobileye, which it acquired in 2017 for $15.3 billion. The chipmaker reportedly wants a $50 billion valuation for the Israel-based business, and expects to maintain majority ownership. http://axios.link/KPoT

Samsara, an S.F.-based connected sensor company, set IPO terms to 35 million shares at $20-$23. It would have an $11.6 billion fully diluted value, were it to price in the middle, plans list on the NYSE (IOT) and reports a $102 million net loss on $303 million in revenue for the first nine months of 2021. The company raised $930 million in VC funding, most recently at a $5.6 billion valuation, from firms like Andreessen Horowitz, General Catalyst, Dragoneer, General Atlantic, Warburg Pincus and Tiger Global. http://axios.link/jGtQ

SPAC Stuff

🚑 Alvotech, an Icelandic developer of biosimilar medicines, agreed to go public at an implied $2.25 billion valuation via Oaktree Acquisition Corp. II (NYSE: OACB). The deal includes a $150 million PIPE from such investors as Temasek, CVC Capital Partners and Suvretta Capital. Alvotech had raised $100 million from firms like Alvogen Group, Baxter Internationa and Shinhan PE. http://axios.link/gFNq

🚑 BenevolentAI, a London-based drug discovery firm, agreed to go public at an implied €1.5 billion valuation via Odyssey, an Amsterdam-listed SPAC. It had raised $350 million from firms like Temasek (which is participating in the PIPE), Lansdowne Partners, Lundbeck, Nortrust, Upsher-Smith Labs and Woodford Investment Management. http://axios.link/frv9

Tomorrow.io, a Boston-based hyper-local weather forecasting company, agreed to go public at an implied $1.2 billion valuation via Pine Technology Acquisition Corp. (Nasdaq: PTOC). Tomorrow raised around $180 million from firms like Canaan Partners, Fontilalis Partners, Square Peg Capital, Pitango, Highline Capital Management and JetBlue. http://axios.link/2NVX

Twelve Seas Investment IV TMT, a SPAC led by Neil Richardson (North Sea Capital, Lion Capital), filed for a $200 million IPO. http://axios.link/BFL6

Liquidity Events

Commercial Metals Co. (NYSE: CMC) agreed to buy Tensar, an Alpharetta, Ga.-based provider of geogrid products, for $550 million from Castle Harlan. http://axios.link/mxYm

Middleby (Nasdaq: MIDD) agreed to buy outdoor cooking brands Masterbuilt and Kamado Joe from Dominus Capital. www.middleby.com

PAG Private Equity is in talks to sell AirPower Technologies, a Chinese industrial gas producer, per Reuters. PAG also could take it public in Hong Kong, with around a $10 billion valuation expectation. http://axios.link/j5fG

More M&A

Equinix (Nasdaq: EQIX) agreed to buy MainOne, a Nigerian data center and connectivity solutions provider, for $320 million. http://axios.link/j2om

Liontrust Asset Management (LSE: LIO) agreed to buy British fund manager Majedie Asset Management for up to £120 million. http://axios.link/eMqr

WeLab, a Hong Kong-based neobank backed by Sequoia Capital and Li Ka-shing, raised $240 million, with most of the proceeds being used to buy Indonesian commercial bank BJJ. http://axios.link/3jFf

Worldline (Paris: WLN), a French payments firm, agreed to buy 80% of the merchant acquiring business of listed Greek lender Eurobank. http://axios.link/csgt

Fundraising

Ballistic Ventures, a VC firm led by Ted Schlein (ex-Kleiner Perkins) and Jacob Seid (Stone Bridge Ventures, TenX), raised more than $200 million for its debut fund, per an SEC filing.

Falcon Edge Capital is raising $10 billion for its next fund, and has rebranded as Alpha Wave Global, per TechCrunch. http://axios.link/Mh9d

Lool Ventures of Israel held a $60 million first close for its third fund, which is targeting $100 million. www.lool.vc

🚑 MTIP, a Swiss healthcare PE firm, raised $250 million for its second fund. www.mtip.ch

PineBridge Investments held a $334 million first close for a fund that co-invests with emerging PE managers. www.pinebridge.com

It's Personnel

• Stacey Cunningham is stepping down as president of the New York Stock Exchange, effective at year end. She'll be succeeded by Lynn Martin, who leads fixed income and data service for NYSE parent company Intercontinental Exchange. http://axios.link/3xLn

BoxGroup, a New York-based VC firm, hired: Claire Goldsmith (ex-Yale Investment Office), Dillon Liang (Bullpen Capital) and Sushanth Raman (Retool). www.boxgroup.com

Julien Codorniou joined Felix Capital as a London-based partner. He previously spent more than a decade with Facebook, most recently leading Workplace. The VC firm also promoted Susan Lin to partner. http://axios.link/Xo85

Jim Conniff joined William Blair as a managing director focused on industrial growth investment banking. He previously was with Lazard Middle Market. www.williamblair.com

Stewart Worthy joined law firm Dorsey & Whitney as a London-based partner in its PE and M&A practice. He previously was with King & Wood Mallesons. www.dorsey.com

Astara Capital Partners promoted Lindsey Tannenbaum to partner. www.astaracapital.com

Final Numbers

Data: FRED; Chart: Axios Visuals
Data: FRED; Chart: Axios Visuals

The bond markets are recalibrating, writes Axios' Kate Marino:

"Investors have been fleeing the high yield bond market — where the riskiest corporates borrow cash — over the last two weeks. Money managers are closely watching asset flows for signs that the loose money available to U.S. companies could start to tighten."

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