Sep 12, 2017

Axios Pro Rata

By Dan Primack
Dan Primack
Top of the Morning

• IPO Delay Day: Three companies that were viewed as near-term IPO candidates have put their plans on hold due to management shakeups:

  • CEO Tim Sullivan is stepping down after a decade-long run, as Axios was first to report this morning. He'll transition into a chairman role on October 1, with CFO and COO Howard Hochhauser taking over on an interim basis. The private equity backed company, which was valued at $2.6 billion when Silver Lake invested in early 2016, had filed confidential IPO papers but plans to hold off on a public S-1 until a new permanent CEO is found.
  • SoFi: CEO Mike Cagney had hinted at an IPO in an August investor letter, discussing the company's search for a new CFO. Now Cagney is also leaving at year-end because "the combination of HR-related litigation and negative press have become a distraction from the company's core mission." That litigation includes Cagney as a defendant, and doesn't even involve the sexually explicit texts he sent to an EA (resulting in a $75k settlement). SoFi was most recently valued at $4 billion.
  • Cabor Credit: The British debt collection firm, backed by J.C. Flowers, has delayed a planned 1 billion offering, after former Provident Financial CEO Peter Crook stepped down from its board of directors, according to Reuters.

• Q&A: Ellen Pao was a relative unknown in Silicon Valley until May 2012, when she sued her employer, legendary venture capital firm Kleiner Perkins Caufield & Byers, for gender discrimination and retaliation. That complaint and the ensuing trial — which she lost — turned Pao into a household name and helped bring the issue of tech industry sexism out of the shadows.

Pao has now written a book about her life, the trial and its aftermath. It's called Reset, and hits shelves next Tuesday (we'll publish a full review on Monday). We spoke recently about why she wrote the book, initial reactions to her complaint and her current thoughts about Kleiner Perkins. The quick read (full Q&A here):

  • Pao thinks the verdict might have been different today.
  • She feels many male reporters lacked empathy in their initial coverage of her complaint.
  • She doesn't regret serving as Reddit's interim CEO during the trial, but admits it was a distraction.
  • Pao continues to have a very dim view of Kleiner Perkins and its leaders, including John Doerr and Ted Schlein.
  • VC firms and corporate boards struggle to diversify because they rarely consider replacing existing partners or directors.

• Update: Last week we reported that personal genetics company 23andMe was raising over $200 million at a $1.5 billion pre-money valuation. The company this morning announced the deal: $250 million led by Sequoia Capital, with Sequoia partner Roelof Botha joining the board of directors. Other participants include Euclidean Capital, Altimeter Capital, the Wallenberg Foundation and return backers Fidelity and Casdin Capital.


BigBasket, an India-based online grocery, reportedly is in the final stages of raising $280 million in Series E funding at a pre-money valuation of around $600 million. Alibaba Group and Paytm Mall would co-lead the round, to be joined by return backers Sands Capital and The Abraaj Group.

  • Why it's the BFD: Because Amazon lost. For once, Amazon lost. Something. Anything. The Seattle-based leviathan reportedly wanted to invest, albeit at a significantly lower valuation and therefore got shut out. Amazon wants to play big in a very fragmented Indian online grocery market but, rather than teaming with BigBasket and its 5 million customers, it now will need to view BigBasket (and Paytm) as a major rival, alongside Flipkart. This also may increase the likelihood that Amazon invests in BigBasket rival Grofers.
  • Bottom line: Bengaluru-headquartered BigBasket has so far raised about $250 million and has posted over three-fold increase in its revenues to Rs 563 crore for 2015-16. It had expanded operations to over 30 cities from just six in 2016, and is betting big on its private-label business to become profitable by March 2018. — VCCircle
Venture Capital Deals

• Lesara, a Berlin-based fashion and lifestyle e-commerce company, has raised $40 million in new VC funding. No investors were disclosed.

• SendInBlue, a Seattle-based digital marketing suite for small businesses, has raised $36 million in Series A funding from Partech Ventures.

🚑 Wellem, a Chinese pediatric clinic chain, has raised $30 million in Series B funding led by GTJA Investment Group.

🚑 Ieso Digital Health, a UK-based provider of digitally-delivered behavioral health solutions, has raised $24 million in new VC funding from Draper Esprit and Touchstone Innovations.

• Aria Systems, a San Francisco-based startup that helps companies grow subscription and usage-based revenue, has raised $18 million in new VC funding. Madison Bay Capital led the round, and was joined by Hummer Winblad Venture Partners, InterWest Partners and Venrock.

• Zilingo, an online fashion marketplace focused on Southeast Asia, has raised $18 million in Series B funding co-led by Sequoia Capital India and Burda Principal Investments.

• Tonbo Imaging, an India-based developer of imaging and sensor systems for end markets like military and defense, has raised $17 million in Series B funding. WRV Capital led the round, and was joined by Artiman Ventures, Qualcomm Ventures and Edelweiss Private Equity.

⛽ Ampt, a Fort Collins, Colo.-based provider of power conversion technology for solar plant optimization, has raised $15 million in new VC funding from Bohemian Investments and company founder Doug Schatz.

🚑 Cheetah Medical, a Newton, Mass.-based provider of non-invasive hemodynamic monitoring solutions, has raised $11.76 million in Series C funding. Return backers include MVM Life Science Partners, Springfield Investment Management, Fletcher Spaght Ventures, HighCape Partners and Robert Bosch Venture Capital.

🚑 DNA Script, a Paris-based manufacturer of de novo synthetic nucleic acids, has raised €11 million in Series A funding. Sofinnova Partners led the round, and was joined by Illumina Ventures, Merck Ventures, Kurma Partners and Idinvest Partners.

• Vemo Education, a Vienna, Va.-based provider of income share agreement solutions for postsecondary education institutions, has raised $7.4 million in seed funding. University Ventures and NextGen Venture Partners co-led the round, and were joined by Route 66 Ventures, Third Kind Venture Capital, Haystack Partners and Task Force X Capital.

• SoftIron, a Newark, Calif.-based software defined storage startup, has raised $7 million in VC funding led by Earth Capital Partners.

• AskNicely, a New Zealand-based provider of customer feedback software, has raised NZ$6.7 million in funding led by Blackbird Capital.

• Lenda, a San Francisco-based mortgage origination and refinancing platform, has raised $5.25 million in Series A funding. SF Capital Group led the round, and was joined by CreditEase Fintech Investment Fund and return backer Rubicon Venture Capital.

• Red Dot Payment, a Singapore-based payment gateway startup, has raised $5.2 million in Series B funding. DORR Group was joined by return backers GMO Venture Partners, Wavemaker Partners, MDI Ventures and Toivo Annus.

• InfoSum, a British data security startup, has raised $5 million in new seed funding from LocalGlobe, Mosaic Ventures, Upfront Ventures and IA Ventures.

• EEVO, a Brooklyn-based VR content creation studio for publishers, has raised $1.3 million in new VC funding from Eagle Advisors, FundersClub and 37 Angels.

⛽ Pegasus Solar, a San Francisco-based maker of rooftop mounting systems for solar installations, has raised an undisclosed amount of Series A funding. Ecosystem Integrity Fund led the round, and was joined by Okapi Capital.

Private Equity Deals

• ClearPoint Investment Partners has invested in Shore Group Associates, a New York -based provider of data management solutions. No financial terms were disclosed.

Enlightenment Capital has invested in The Cadmus Group, a Waltham, Mass.-based provider of technical and strategic consultancy services. No financial terms were disclosed.

• Evergreen Coast Capital Partners, the private equity arm of Elliott Management, has offered to acquire Gigamon (NYSE: GIMO), a Santa Clara, Calif.-based networking software company with a market cap of nearly $1.6 billion, according to Reuters. Elliott already holds around a 7% stake in the company.

• Genstar Capital has completed its previously-announced acquisitions and merger of Bermuda-based fund administrators Apex Fund Services and Equinoxe Alternative Investment Services. No financial terms were disclosed.

• Rackspace, a San Antonio, Texas-based portfolio company of Apollo Global Management, has agreed to acquire Datapipe, a Jersey City, N.J.-based provider of managed hosting services, cloud computing and data center services, from ABRY Partners. No financial terms were disclosed.

• Peak Rock Capital has acquired Hasa, a Saugus, Calif.-based maker of water treatment products. No financial terms were disclosed.

• Relex Solutions, a Finland-based provider of unified retail planning solutions, has secured an undisclosed amount of new growth equity funding from existing backer Summit Partners.

• Silverfleet Capital has agreed to acquire Pumpenfabrik Wangen, a German maker of progressing cavity and twin-screw pumps. No financial terms were disclosed.

• Toshiba Corp. now favors the Bain Capital-led bid for its $22 billion semiconductor business, according to Reuters.

Public Offerings

• Secoo, a Chinese luxury product and services e-commerce site, has set its IPO terms to 8.5 million American depository shares being offered at between $11.50 and $13.50 per share. It plans to trade on the Nasdaq under ticker symbol SECO, with Jefferies serving as lead underwriter. The company reports around $7.7 million of net income on nearly $200 million in revenue for the first half of 2017. Shareholders include IDG (24.5% pre-IPO stake), China Media Capital, Ventech China, Crehol Meaningful Capital and Vangoo Investment Partners.

Liquidity Events

The Blackstone Group is planning to launch a dual exit process for Vivint, a Provo, Utah-based maker for smart home tech, according to the WSJ. A sale or IPO could value Vivint at more than $3 billion (or $6b including debt).

More M&A

⛽ Dover Corp. (NYSE: DOV) is considering a sale process for its upstream energy unit, according to Reuters.


• PAG, a Hong Kong-based private equity firm, is raising up to $300 million for a China-focused distressed debt fund, according to IFR.

• Volpi Capital, a European buyout firm led by former executives of 3i Group (Crevan O'Grady and Andrew Golding) and Veronis Suhler Stevenson (Marco Sodi) is seeking to raise more than €200 million for its debut fund, according to Financial News.

Final Numbers

Equifax shares fell another 8.2% on Monday, as the credit scoring giant continues to face blowback from a massive hack of customer information and its botched response. And now the U.S. Senate Finance Committee wants answers.

The Atlanta-based company's stock price has fallen from a 5-day high of $143.27 last Thursday to $113.12 at market close yesterday, representing more than $3.5 billion billion in lost market cap.

Dan Primack