Mar 21, 2018

Axios Pro Rata

By Dan Primack
Dan Primack

What snow? We're still on for a live event this afternoon in D.C. at Howard University, around the topic of "Defining the Future." Participants Jamie Dimon and Steve Case give a preview and make some news. Make sure to RSVP.

Top of the Morning
Former NFL player Troy Polamalu, the AAF's director of players. Source: Giphy

The Alliance of American Football yesterday came out of stealth mode, announcing itself as an NFL rival that will kick off before Vince McMahon relaunches the XFL.

This is a bit of a strange one, and I say that on the same day that Cryptokitties raised $12 million.

  • AAF said that its backers include Founders Fund, Chernin Group, Slow Ventures, Keith Rabois and former NFL star Jared Allen. No dollars were disclosed, but Axios has learned that their combined check is below $10 million. That seems like a very small nut for such a large undertaking — even with a broadcast deal from CBS — with one source suggesting that yesterday's announcement is, in part, a solicitation for more funding.
  • League spox: "While we do not disclose financials, we are confident we have the right team and long-term financial resources in place to ensure fans will experience high quality professional football for many seasons to come."
  • AAF is led by Charlie Ebersol, who recently produced an ESPN documentary on the original XFL (which his father, Dick Ebersol, effectively co-founded as head of NBC Sports). The doc's key takeaway was that the XFL was felled by launching too quickly, resulting in a lousy product. But AAF is planning to play its first game one week after the upcoming Super Bowl (i.e., less than a year from now).
  • More spox: "We have been working on this for over a year in private. It’s an ambitious timeline, but we have the right people in place to achieve it."
  • Intrigue: The Founders Fund investment wasn't led by Peter Thiel, but it is interesting to watch his fund compete with the interests of Vince McMahon, whose wife Linda is in Trump's cabinet as SBA head.
  • Disclaimer: Bill Polian is involved in AAF so, as a Patriots fan, I admittedly have a bit of negative bias.

• IP-uh-Oh: The Supreme Court yesterday ruled unanimously that class-action lawsuits over IPOs can be brought in state courts or federal courts, which is a big win for plaintiff's lawyers and a big loss for companies.

• Fund scoop: Elephant, the VC firm led by Andy Hunt (co-founder of Warby Parker) and Jeremiah Daly (ex-Accel, ex-Highland), has raised $250 million for its second fund. It had closed its debut fund at the end of 2015 with $156 million, and has backed such companies as Allbirds and Scopely.

• Venture hegemony: A group of 400 founders, CEOs and investors has launched a group devoted to improving diversity in VC ranks. Go deeper here.

• Update: Arizona authorities say that the self-driving Uber likely wasn't at fault for killing a pedestrian, saying it's unlikely even a human driver could have prevented the accident. Per police chief Sylvia Moir: "She came from the shadows right into the roadway."

  • That said, self-driving tests continue to be paused. Not only by Uber, but also by companies like Toyota and Nutonomy.
Source: Giphy

Salesforce (NYSE: CRM) has agreed to acquire SaaS integration company MuleSoft (NYSE: MUL) for approximately $6.5 billion in cash and stock.

  • Why it's the BFD: This is the largest-ever acquisition by Salesforce, which is beginning to look at bit more like Oracle with each passing day. Plus, it's a 164% return for those who bought into MuleSoft's IPO one year ago this week.
  • Bottom line: "Salesforce needed to acquire a hybrid cloud strategy." — Larry Dignan, ZDNet
Venture Capital Deals

• DJI, a Chinese consumer drone-maker, is raising between $500 million and $1 billion at a $15 billion valuation, per The Information.

17Zuoye, a Beijing-based online education platform, has raised $250 million in new Series E funding. Temasek led and was joined by CITIC and return backer Shunwei Capital. Earlier this month the company raised $200 million from Toutiao.

🚑 Unity Biotechnologies, a San Francisco-based developer of anti-aging drugs with an initial candidate focused on musculoskeletal disease, has raised $55 million in Series C funding. EcoR1 Capital Fund, 6 Dimensions Capital and Altitude Life Science Ventures were joined by return backers Fidelity, Baillie Gifford, Partner Fund Management, Pivotal Alpha, Invus Opportunities, ARCH Venture Partners, Venrock, Founders Fund and the Longevity Fund.

🚚 KeepTruckin, a San Francisco-based electronic logs and fleet management platform for the trucking industry, has raised $50 million in Series C funding. IVP led and was joined by return backers GV, Scale Venture Partners and Index Ventures.

Mythic, an Austin, Texas-based AI chip startup, has raised $40 million in Series B funding. SoftBank led, and was joined by Lockheed Martin Ventures, DFJ and Andy Betchtolsheim.

Mark43, a New York-based public safety platform, has raised $38 million in Series C funding. General Catalyst and Breyer Capital co-led, and were joined by return backers Spark Capital, Sound Ventures, Bezos Expeditions, Goldman Sachs, David Petraeus, Amplo, Innovation Endeavors, Govtech Fund and SV Angel.

Clari, a Sunnyvale, Calif.-based provider of AI solutions for sales, has raised $35 million in new funding. Tenaya Capital led, and was joined by Thomvest Ventures, Blue Cloud Ventures and return backers Sequoia Capital, Bain Capital Ventures and Northgate Capital.

Fauna, a San Francisco-based NoSQL database for mission critical data, has raised $25 million in Series A funding from Capital One Growth Ventures, GV, Point72 Ventures, Afore Capital and Costanoa Ventures.

Chargebee, a provider of SaaS subscription management and recurring billing solutions, has raised $18 million in Series C funding. Insight Venture Partners led, and was joined by return backers Accel and Tiger Global Management. The company has offices in India and San Francisco.

🙀 CryptoKitties, a blockchain gaming startup, has raised $12 million in funding co-led by Andreessen Horowitz and Union Square Ventures.

UpKeep, an order management system for maintenance workers, has raised $10 million in Series A funding. Emergence Capital led, and was joined by Bain Capital, Battery Ventures and Y Combinator.

The Riveter, a Seattle-based coworking startup focused on women, has raised $4.75 million in funding led by Madrona Venture Group.

Green Tank Technologies, a Toronto-based maker of cannabis vaporization hardware, has raised C$4.3 million in seed funding co-led by Green Acre Capital and Casa Verde Capital.

HomeCaptain, a New York-based real estate platform for home buyers, has raised an undisclosed amount of Series A funding led by Spring Mountain Capital.

Private Equity Deals

10100, the investment fund recently launched by ex-Uber CEO Travis Kalanick, has agreed to invest $150 million for a majority stake in City Storage Systems, a re-developer of distressed real estate assets. Kalanick will serve as CEO.

Ascensus, a portfolio company of Genstar Capital and Aquiline Capital Partners, has agreed to acquire Chard Snyder, a Mason, Ohio-based third party administrator for employee benefits plants.

H.I.G. Capital has acquired Wastequip, a Charlotte-based manufacturer of waste and recycling equipment, from Centerbridge Partners.

KKR has acquired four Chinese digital marketing companies that will be merged into a single platform called Cue & Co.

Mainsail Partners has invested in PestRoutes, a McKinney, Texas-based provider of business management software for the pest control industry.

Nordstrom (NYSE: JWN) said that it has ended talks with its founding family and Leonard Green & Partners over a take-private acquisition, after failing to agree on price., Carson, Anderson & Stowe has agreed to acquire a majority stake in Avetta, an Irvine, Calif.-based provider of supply chain risk management software. TCV also is participating on the buyside, while seller Norwest Venture Partners will retain a portion of its investment.

Public Offerings

Docusign, a San Francisco-based e-signature platform, has filed confidentially for an IPO, per TechCrunch. It has raised over $550 million in VC funding, most recently at a valuation of around $3 billion.

Dropbox, a San Francisco-based file storage and sharing company, raised its proposed IPO price from $16-$18 to $18-$20, but will still offer 36 million shares. It now would have a fully-diluted market value of around $9 billion, were it to price at the top of its range. That's not inclusive of shares reserved for future issuance under equity compensation plans — some of which would become effective prior to the IPO.

GrafTech International, a Brooklyn Heights, Ohio-based maker of graphite electrodes for use in steelmaking, has filed for a $100 million IPO. It plans to trade on the NYSE under ticker EAF, with J.P. Morgan as lead underwriter. The company reports $8 million of net income on around $551 million in revenue for 2017, and is owned by Brookfield Capital.

Liquidity Events

Google has agreed to acquire Lytro, a Mountain View, Calif.-based light-field technology company, according to TechCrunch. Lytro has raised over $200 million from firms like Andreessen Horowitz, NEA, North Bridge Venture Partners, Correlation Ventures, GSV Capital and Qualcomm Ventures. The reported sale price is only between $20 million and $45 million.

Greenbriar Equity Group has hired Deutsche Bank to find a buyer for World Freight Co., a French cargo freight shopping company that could be worth over €600 million, per Reuters.

HelloFresh, a Frankfurt-listed meal-kit delivery company, has agreed to acquire Green Chef, a Boulder, Colo.-based rival that has raised nearly $70 million in VC funding from TA Ventures, NEA, Global Venture Capital, Greenspring Associates and TriplePoint Venture Growth.

More M&A

Bayer has received EU antitrust approval for its $62.5 billion takeover of Monsanto (NYSE: MON), although the deal has not yet gotten a nod from U.S. antitrust authorities.

Berkshire Hathaway disclosed that it paid $2.76 billion last year for its 38.6% stake in truck stop chain Pilot Flying J.

Deutsche Telekom has agreed to acquire an additional 5% stake in Greece’s largest telecom company, OTE, for €284 million.

General Dynamics (NYSE: GD) has increased its takeover bid for rival defense contractor CRSA (NYSE: CRSA) to $9.7 billion, in order to counter an unsolicited offer from CACI International (NYSE: CACI).

Liberty Global (Nasdaq: LBTY) and Sunrise Communications (Swiss: SRCG) are in early talks to merge their Swiss businesses, according to Bloomberg.

PPF Group, an investment firm led by Czech billionaire Petr Kellner, has agreed to acquire the Central and Eastern European business of Norwegian telco Telenor for €2.8 billion.

Qatar Holding has agreed to sell its 23% stake in Chinese department store operator Lifestyle International (HK: 1212) via a $662 million private placement.

Reliance Communications, an Indian telecom company, said bondholders have approved an asset sale plan.

⛽ SK Innovation, owner of South Korean refinery SK Energy, has agreed to acquire Texas-based shale company Longfellow Nemaha.

Vivendi has sold its 27.27% stake in French game publisher Ubisoft for €2 billion, to an investor group that includes Tencent and Ontario Teachers’ Pension Plan.


Khosla Ventures is raising up to $1 billion for its sixth flagship fund and up to
$400 million for a new seed fund, per SEC filings.

🚑 Seventure Partners has secured €24 million for a new European VC fund focused on animal health startup, with a cornerstone commitment from Adisseo.

In memoriam
Photo by James Leynse/Corbis via Getty Images

Pete Peterson, co-founder of The Blackstone Group (among many, many other endeavors), has passed away at the age of 91. NY Times obituary.

Final Numbers: U.S. debt capital markets
Source: Thomson Reuters
Dan Primack