Axios Pro Rata
July 16, 2020
🖥️ You're invited: Axios tomorrow hosts a live virtual event on the shift to telemedicine and remote learning, with Rep. Grace Meng (D-N.Y.), Stand for Children CEO Jonah Edelman, and Mei Kwong, executive director of the Center for Connected Health Policy. Register here.
Top of the Morning
In April, several prominent Democrats proposed a moratorium on large mergers and acquisitions. Their argument was that the pandemic would embolden the strong to pounce on the weak, thus reducing competition.
- Fast forward: The moratorium never materialized. Nor did the M&A feeding frenzy.
By the numbers: Announced deal value for U.S.-based companies through July 9 were down 64% from the same period in 2019, according to Refinitiv. Aggregate deal value between Q1 and Q2 2020 fell by more than 40%.
- The number of announced deals did increase slightly between year-to-date 2019 and 2020, but relatively few of those were large transactions that would rearrange the competitive landscape.
- There also was a sizable decrease for private equity-backed deals, in terms of both value and number of deals.
Stumbling blocks: One reason for acquirer hesitance is that it's taking much longer to get deals over the finish line.
- Take the example of Visa, which in January agreed to pay $5.3 billion for fintech upstart Plaid.
- At the time, Visa said the deal would close in three to six months. Now Visa says it hopes to finish by year-end.
- Plaid CEO Zach Perret told me yesterday that the delay was largely driven by a slowdown in the regulatory process, as the federal bureaucracy adjusts to remote work.
Then there's the still-surging public equities market. Yes, buyers have more firepower — but many target prices are just too high for comfort, and there have been fewer-than-expected distressed situations.
- Robust federal lending programs have also kept a number of bankruptcies and near-bankruptcies at bay.
The bottom line: The pandemic continues to rage in America, and the M&A mitigation may ultimately look like a first wave phenomenon. But, at least for now, Monopoly needn't release a special 2020 edition.
SMIC, China's largest chipmaker, raised $6.62 billion in an IPO on Shanghai's STAR Market, and saw its share price more than triple during its first day of trading. It will continue to be listed in Hong Kong.
- Why it's the BFD: This is the largest mainland China IPO since 2010, and makes SMIC the most valuable Shanghai-listed tech company with a market cap north of $84 billion.
- The bottom line: "The share sale is an important moment for the company but also China’s broader ambition to grow its domestic semiconductor industry, a push that has been accelerated by the trade war between the U.S. and China." — Arjun Kharpal, CNBC
Venture Capital Deals
• Qumulo, a Seattle-based file data platform, raised $125 million in Series E funding at a valuation north of $1.2 billion. BlackRock led, and was joined by Highland Capital Partners, Madrona Venture Group, Kleiner Perkins, and Amity Ventures. http://axios.link/mGL9
• Vedantu, an Indian online tutoring platform, raised $100 million in Series D funding led by Coatue at a $600 million valuation. http://axios.link/YBDZ
🚑 BioAtla, a San Diego-based cancer drug developer, raised $72.5 million in Series D funding. Soleus Capital and HBM Healthcare Investments co-led, and was joined by Cormorant Asset Management, Farallon Capital, Pappas Capital, Janus Henderson, Boxer Capital, and Pfizer Ventures. http://axios.link/URo6
🚑 Caption Health, a Brisbane, Calif.-based developer of AI-guided ultrasound technology, raised $53 million in Series B funding. DCVC led, and was joined by Atlantic Bridge, Edwards Lifesciences, and return backer Khosla Ventures. http://axios.link/DYza
• Bolt, a San Francisco-based provider of e-commerce checkout solutions, raised $50 million in Series C funding. WestCap led, and was joined by return backers Activant Capital, Tribe Capital, Glynn Capital, and Human Capital. www.bolt.com
🚑 Glympse Bio, a Cambridge, Mass.-based developer of injectable chemical biomarkers, raised $47 million in Series B funding. Section 32 led, and was joined by Temasek, DNS Capital, New Leaf Venture Partners, Waterman Ventures, Catalio Capital Management, and return backers LS Polaris Innovation Fund, Arch Venture Partners, CRV, GreatPoint Ventures, and Gilead Sciences. http://axios.link/y6Sq
• Zeotap, a German customer intelligence platform, raised $42 million in Series C funding from backers like Singtel Innov8, MathCapital, Coparion, NeueCapital Partners, Capnamic Ventures, and Iris Capital. http://axios.link/wari
• Openpath, a Culver City, Calif.-based developer of keyless door access control systems, raised $36 million in Series C funding. Greycroft led, and was joined by Okta Ventures, LPC Ventures, Allegion and Sentre. http://axios.link/qYzW
• Bond, a San Francisco-based fintech infrastructure platform, raised $32 million. Coatue led, and was joined by Goldman Sachs, Mastercard, B Capital, XYZ Ventures, John Mack and return backer Canaan Partners. http://axios.link/YMbq
• Drover, a UK-based auto subscription service, raised £20.5 million in Series B funding. Target Global, RTP Global, and Autotech Ventures co-led, and were joined by Channel 4 Ventures, Rider Global, and return backers Cherry Ventures, BP Ventures, Partech, Version One, and Forward Partners. http://axios.link/kpFl
🚑 Meditopia, a meditation app with offices in Berlin and Instanbul, raised $15 million in Series A funding co-led by Creandum and Highland Europe. http://axios.link/j34e
🚑 Gyant, a San Francisco-based patient care coordination platform, raised $13.6 million in Series A funding. Wing VC led, and was joined by Intermountain Ventures, Grazia Equity, Alpana Ventures, Techstars Ventures, and Plug and Play Ventures. http://axios.link/MZf3
• Crisp, a New York-based demand forecasting startup for the food industry, raised $12 million in Series A funding. FirstMark led, and was joined by Spring Capital and Swell Partners. http://axios.link/RB3o
🚑 Qualio, a San Francisco-based cloud quality management system for life sciences, raised $11 million in Series A funding. Storm Ventures led, and was joined by Sorenson Ventures, MHS Capital, and Frontline Ventures. www.qualio.com
• Sourcegraph, a San Francisco-based universal code search startup, raised $5 million in Series B funding led by Felicis Ventures. http://axios.link/2lum
• Nomad Homes, a Dubai-based home buying platform, raised $4 million in seed funding. Comcast Ventures led, and was joined by Abstract Ventures, Partech, Precursor Ventures, WndrCo, and Class 5 Global. http://axios.link/KJca
🚑 Uniper Care, a Los Angeles-based social engagement and telehealth startup focused on older adults, raised $4 million led by Zeev Ventures. http://axios.link/lips
• Env0, an Israeli self-service cloud management startup, raised $3.5 million in new seed funding. Crescendo Venture Partners led, and was joined by M12, Boldstart Ventures, and Grove Ventures. www.env0.com
Private Equity Deals
• Foam Fabricators, a Scottsdale, Ariz.-based portfolio company of Compass Diversified (NYSE: CODI), acquired Polyfoam, a Northbridge, Mass.-based maker of protective and cold chain packaging solutions. www.polyfoamcorp.com
🍕 Hony Capital appears poised to lose control of U.K.-based pizza shop chain PizzaExpress, via a debt-for-equity swap with bondholders, although the business may split with Hony maintaining China operations. http://axios.link/6jjt
🚑 Acutus Medical, a Carlsbad, Calif.-based developer of ablation procedures to treat arrhythmia, filed for a $75 million IPO. It plans to list on the Nasdaq (AFIB) with JPMorgan as lead underwriter. The company raised over $300 million in VC funding from firms like OrbiMed (30.5% pre-IPO stake), Deerfield Management (18.4%), and Advent Life Sciences (9.3%), and Index Ventures. http://axios.link/jCAE
• CommerceHub, an Albany, N.Y.-based supply chain software company taken private in 2018b by Sycamore Partners and GTCR, hired Morgan Stanley to prep an IPO that could value the company north of $2 billion, per Bloomberg. http://axios.link/40Dn
• HPX Corp., a SPAC targeting a Brazil business, raised $220 million in its IPO. It’s led by Bernardo Hees, a former 3G Capital partner and former Burger King CEO who serves as chairman of Avis Budget Group. http://axios.link/RZL1
🚑 Relay Therapeutics, a Cambridge, Mass.-based biotech focused on solid tumors, raised $400 million in its IPO. The pre-revenue company priced 20 million shares at $20, versus initial plans to offer 14.7 million shares at $16-$20, for an initial market cap of $1.63 billion. It will list on the Nasdaq (RLAY) and had raised $520 million in VC funding from firms like SoftBank Vision Fund (40.7% pre-IPO stake). Third Rock Ventures (20.7%), BVF Partners, GV, Casdin Capital, EcoR1 Capital, Alexandria Venture Investments, and Section 32. http://axios.link/N1AM
• Trean Insurance Group, a Wayzata, Minn.-based workers’ comp insurer, raised $161 million in its IPO. The company priced 10.7 million shares at $15 (high end of range), for a market cap of $767 million, and will list on the Nasdaq (TIG). http://axios.link/cge2
🚑 Crescent Capital hired BofA to find a buyer for pathology labs operator Australian Clinical Labs, per The Australian. www.clinicallabs.com.au
• Microsoft (Nasdaq: MSFT) completed its previously announced purchase of Metaswitch Networks, a U.K.-based provider of cloud communications products for carriers and network providers. Sellers include Northgate Capital, WRV, Francisco Partners, and Sequoia Capital. www.metaswitch.com
🚑 Partners Group and Frazier Healthcare are seeking a buyer for PCI Pharma Services, a Philadelphia-based contract manufacturer that could fetch upwards of $3 billion, per PE Hub. http://axios.link/HIOY
• MP Materials, a U.S. rare earths miner, will go public via reverse merger with Fortress Value Acquisition Corp. (NYSE: FVAC), a SPAC affiliated with SoftBank’s Fortress Investment Group. http://axios.link/Oh4k
• Tink, a Swedish open-banking platform, bought Instantor, a Swedish credit decisioning platform. Tink has raised over €100 million in VC funding , most recently at a €415 million valuation, while Instantor was backed by FinTech Ventures Fund. http://axios.link/0g2Q
🚑 Thermo Fisher Scientific (NYSE: TMO) increased its takeover offer for genetic testing company Qiagen (DE: QIA) from at €39 per share to at €43 per share. http://axios.link/ireK
⛽ Total (Paris: FP) is seeking to sell its 25.7% stake in a British North Sea gas pipeline called SEAL for around $200 million, per Reuters. http://axios.link/TUtx
⛽ Trident Energy do Brasil acquired 10 Brazilian oil fields from Petrobras for $365.4 million. http://axios.link/SPsv
• Uber (NYSE: UBER) has held talks about raising $500 million for Uber Freight, which would value the unit at around $4 billion, per Bloomberg. http://axios.link/4wAs
- Uber today announced an acquisition of Routematch, an Atlanta-based provider of software to transit agencies. http://axios.link/O4K2
• The Carlyle Group is raising $2 billion for a North American growth equity fund, per Bloomberg. http://axios.link/yBDH
• Coelius Capital, a new VC firm led by angel investor and serial entrepreneur Zach Coelius, raised $15 million for its first early-stage fund and $30 million for its first opportunities fund. Both are solely funded by Industry Ventures. http://axios.link/WD3Q
• D.E. Shaw is raising $1 billion for its fifth credit opportunities fund, per Bloomberg. http://axios.link/zrg4
• Sandhya Venkatachalam joined Khosla Ventures as a partner. She previosuly launched an AI-focused VC firm called Deep Ventures after having led growth equity investing for Social Capital (and co-founding Centerview Capital).
- Venkatachalam tells Axios that she first approached Vinod Khosla about investing in Deep Ventures, but then decided to join forces after deciding that the two had “100% alignment on mission and how to execute on that mission.”
• Cotter Cunningham, founder and former CEO of RetailMeNot (Nasdaq: SALE), joined Next Coast Ventures as an entrepreneur-in-residence. www.nextcoastventures.com
• Evercore announced that John Weinberg will become co-CEO, alongside Ralph Schlosstein. http://axios.link/teMn
🚑 Arvind Gupta, founder of biotech accelerator IndieBio, joined venture firm Mayfield as a partner. http://axios.link/5emb
• Lone Star Funds has closed its Australian office, with Sydney-based managing director Jason Howes leaving the U.S.-based firm last month, per The Australian.
Final Numbers: Family office survey
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