Dec 3, 2019

Axios Pro Rata

Top of the Morning

Illustration: Aïda Amer/Axios

Concerns over climate change will reduce the amount of capital available for private equity investments in fossil fuels, according to a recent survey by Coller Capital.

  • 38% of responding limited partners say they will reduce their commitments to oil and gas funds over the next five years.
  • The numbers are much higher among European and Asia-Pacific LPs than for those in North America, where only 30% say climate change will cause any change to their PE investment strategy and just 16% say it will affect their own operating procedures.

Many of the respondents are planning to replace fossil fuel dollars with investments in renewable energy. If that comes to pass, it could significantly increase private equity's influence in the sector, where overall global investment is down from its 2016 peak.

• Up north: Portag3 Ventures, a Canadian fintech-focused venture firm, this morning announced the close of its second fund with around US$320 million.

  • Yesterday I happened to interview firm exec chairman and co-founder Paul Desmarais III, at a private event in California, during which he argued that many fintech startups err in trying to expand globally.
  • His basic argument was that fintech benefits disproportionately from market share, thus most investment and focus should be on trying to expand in home or contiguous geographies.

New firm alert: Patri Friedman, a former Google engineer who also founded the Peter Thiel-backed Seasteading Institute, has launched a San Francisco-based venture shop called Pronomos Capital. It's raising $20 million for a debut fund, per an SEC filing.

  • Yesterday we noted the formation of 8-Bit Capital, co-led by Friendster and Nuzzel founder Jonathan Abrams. An hour later, 8-Bit disclosed in an SEC filing that it's raising $25 million for its first fund.

Office space: The story of WeWork's founding and fall is headed to the big-screen, courtesy of Blumhouse Productions and Universal Studios.

  • It will be penned by Oscar Randolph ("The Big Short"), adapted from an upcoming book from Fast Company scribe Katrina Brooker.
  • Email me your casting suggestions (Adam Driver for Adam Neumann?).

Source: Giphy

Dolls Kill, a Los Angeles-based fashion brand and retailer, raised $40 million in Series B funding led by Sequoia Capital.

  • Why it's the BFD: Because this is Hot Topic for digital natives, leveraging social media comments to find its models and focusing on sub-cultures that often congregate online.
  • Details: No official word on valuation, but a source puts it in the $400 million range. Dolls Kill previously raised around $20 million from groups like Maveron, Lewis Trust Group, and Angel Capital Management.
  • Bottom line: "I was a customer before investing... Dolls Kill isn't about being trendy. It's about expressing your authentic self above all else. This idea of has more widespread appeal than one may think, especially among younger generations who value individuality and authenticity above conformity and perfection." — Amy Sun, Sequoia Capital
Venture Capital Deals

Picnic, a Dutch online grocery, raised €200 million in equity funding from NPM Capital, Hoyberg, Kruidvat, and Finci. It also secured a €50 million loan from ABN AMRO.

FinAccel, a Singapore-based credit lending app, raised $90 million in Series C funding. Asia Growth Fund and Square Peg Capital co-led, and were joined by Singtel Innov8, TMI, Cathay Innovation, Kejora-InterVest, Mirae Asset Securities, Reinventure, and DST Partners.

Gong, a San Francisco-based revenue intelligence platform, raised $65 million in Series C funding. Sequoia Capital led, and was joined by Battery Ventures, Norwest Venture Partners, Shlomo Kramer, Wing Venture Capital, NextWorld Capital, and Cisco Investments.

🚑 IFM Therapeutics, a Boston-based biotech focused on autoimmune diseases, raised $55.5 million. Omega Funds led, and was joined by return backers Atlas Venture and Abingworth.

Migo, a San Francisco-based consumer credit platform for emerging markets, raised $20 million in Series B funding. Valor Equity Group led, and was joined by return backers The Rise Fund and Velocity Capital.

Cuvva, a British auto and travel insure-tech startup, raised £15 million in Series A funding from RTP Global, Breega, LocalGlobe, Techstars Ventures, Tekton, and Seedcamp.

Proteus Motion, a Boston-based resistance strength training startup, raised $3.8 million co-led by former NBA commissioner David Stern and Harris Blitzer Sports & Entertainment.

Private Equity Deals

AE Industrial Partners acquired AIM MRO, an Ohio-based maker of consumable repair products and materials for the aerospace engine aftermarket.

🚑 DirectMed, a San Diego-based portfolio company of Mercury Partners, acquired Medical Systems Technologies, a Longmont, Colo.-based repairer and tester of MRI and computed tomography components.

ICP Group, an Andover, Mass.-based portfolio company of Audax Private Equity, acquired Hi-Tech Coatings, a maker of water-based and UV-based coatings, from Germany’s Heidelberg.

Monomoy Capital Partners acquired Sportech, an Elk River, Minn.-based maker of cab components for utility task vehicles.

WILsquare Capital acquired Versare Solutions, a Minneapolis-based maker of branded space efficiency and acoustical products.

Liquidity Events

GS Acquisition, a listed SPAC led by former Honeywell CEO David Cote and backed by Goldman Sachs, is in talks to buy Columbus, Ohio-based backup power equipment company Vertiv from Platinum Equity for more than $5 billion (including assumed debt), per Reuters.

Permira is seeking a buyer for John Masters Organics, a hair care products company that could fetch $200 million, per Bloomberg.

🍿 PepsiCo (Nasdaq: PEP) agreed to buy BFY Brands, a Middletown, N.Y.-based maker of “better-for-you” snacks like PopCorners, from Permira.

Hostess Brands (Nasdaq: TWNK) agreed to buy Canadian cookie maker Voortman Cookies for around $320 million in cash from Swander Pace Capital.

More M&A

🚑 Astellas Pharma (Tokyo: 4503) agreed to buy U.S. gene therapies company Audentes Therapeutics (Nasdaq: BOLD) for around $3 billion in cash, or $60 per share (110% premium to yesterday’s closing price).

Centamin (LSE: CEY), a British gold miner, rejected a 1.47 billion takeover offer from Canada’s Endeavour Mining (TSX: EDV).

Cleveland-Cliffs (NYSE: CLF) agreed to buy AK Steel (NYSE: AKS) for $1.1 billion in stock.

Hudson’s Bay Co. (TSX: HBC) said that an C$11 per share takeover bid from Catalyst Capital Group is not “superior” to the C$10.30 per share bid it already accepted from a consortium led by executive chairman Richard Baker.

Kanabo Research, an Israeli cannabis company, has agreed to go public in London via a reverse merger with a SPAC called Spinnaker Opportunities (LSE: SOP).

🚑 Sanofi (Paris: SASY) agreed to sell Seprafilm, a maker of specialist surgical products, to Baxter International (NYSE: BAX) for $350 million in cash.

Vingroup agreed to merge with Masan Group, in a move that would create Vietnam’s largest retail company.

Xometry, a Gaithersburg, Md.-based online marketplace for custom-manufactured parts, acquired Munich-based peer Shift. Xometry has raised around $118 million in VC funding, while Shift had been seeded with €4 million.


Accel raised $550 million for its sixth India-focused VC fund.

Commerce Ventures, a San Francisco-based firm focused on fintech and commerce, raised over $60 million for its third fund.

Spire Capital, a New York-based private equity firm focused on tech-enabled businesses, held a $188 million close for its fourth fund, per an SEC filing.

It's Personnel

Omar Hamoui is leaving Sequoia Capital to join Mucker Capital as its third general partner.

Rick Jain joined Pantheon as a partner and global head of private debt. He previously was with Star Mountain Capital.

Michael Kim has stepped down as global head of tech investment banking at Piper Jaffray, in order to join Liontree as a managing director, per his LinkedIn page.

🚑 David Prendergast, a former VP with Waud Capital Partners, joined Enhanced Healthcare Partners as VP of biz dev.

Tusk Ventures promoted Solomon Hailu to principal.

Final Numbers
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Data:; Chart: Andrew Witherspoon/Axios

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