March 13, 2024

🏛️ Situational awareness: The House today is expected to vote on the bill to require ByteDance to divest of TikTok.

Top of the Morning

Illustration: Sarah Grillo/Axios

When we discuss mattress companies in this space, it's usually because someone lost a lot of money. But not today.

Driving the news: Ashley Home Furnishings last week announced an acquisition of Resident Home, an Indiana mattress maker that primarily sells via direct digital marketing.

  • Few media outlets picked up on it, yours truly included.
  • Perhaps because Ashley neglected to mention that it paid nearly $1 billion.

Details: The deal was financed via around $680 million in cash and a $300 million seller note, per multiple sources.

  • That's a king-sized payday for Resident's venture backers, including Ion Crossover Partners, Nexus Capital Management, Baron Capital, Data Point Capital, Eastward Capital Partners, and Glynn Capital.
  • The company raised less than $10 million between its 2017 founding and 2021, when it raised $130 million.

Zoom out: Ashley is a quiet juggernaut. It claims to be North America's largest furniture store brand, while its parent company is the world's largest furniture maker with over 35,000 employees in 155 countries.

Look ahead: That parent company is privately-held, led by a father-and-son team in Wisconsin, but the Resident acquisition could give it some exposure to the public markets.

  • Ashley itself won't list, but a source says the plan for Resident is to help it expand its product line via acquisition and then spin Resident out via IPO.
  • A different source adds that Resident, prior to acquisition, was profitable with around $900 million in 2023 revenue and 10% EBITDA margins.

Neither Ashley nor Resident responded to interview requests.

The bottom line: Not all bedding deals end up burning investors.

The BFD

Illustration: Aïda Amer/Axios

Social Capital, the VC firm led by investor and popular podcaster Chamath Palihapitiya, has fired partners Jay Zaveri and Ravi Tanuku.

Why it's the BFD: This one could get very ugly very quick, as it's becoming a "he said, he said" dispute over investments in a valuable AI company called Groq.

Details: The fired partners formed an SPV to invest in an expiring convertible note in Groq, which also is said to be raising new funding at a significant step up to its $1.1 billion valuation in 2021.

  • Social Capital claims that the SPV was done behind its back, thus the firings. Zaveri tells Axios that Social Capital leadership not only knew, but that the firm was set to participate in the SPV.
  • Read more here.

The bottom line: This isn't the first personnel debacle at Social Capital, but it could become the most litigious.

Venture Capital Deals

🚑 Zephyr AI, a Tysons, Va.-based precision medicine startup, raised $111m in Series A funding from Eli Lilly, EPIQ Capital Group, Jeff Skoll, and Revolution Growth. www.Zephyrai.bio

• Nozomi Networks, an SF-based provider of OT and IoT security solutions, raised $100m in Series E funding from Mitsubishi Electric and Schneider Electric. www.nozominetworks.com

🌍 CarbonCapture, an LA-based direct air capture startup, raised $80m in Series A funding. Prime Movers Lab led the round, and was joined by Aramco Ventures, Amazon's Climate Pledge Fund, Siemens Financial Services, Idealab X, and TIME Ventures. https://axios.link/497xnYt

• Perfios, an Indian B2B credit decisioning SaaS provider that's reported to be prepping an IPO, raised $80m from Ontario Teachers' at a valuation north of $1b. https://axios.link/48UdnZ8

• Voi, a Swedish e-scooter company that's been prepping an IPO, raised $25m and converted $85m of convertible notes into equity. Investors include VNV Global, Raine Group, Nineyards Equity, Balderton, Creandum, Project A, Stena, and Black Ice Capital. https://axios.link/48LY30F

• Vouch, a SF-based business insurer, raised $25m in Series C-1 funding led by Ribbit Capital. www.vouch.us

⚡ Quaise Energy, a Cambridge, Mass.-based geothermal startup, raised $21m in Series A extension funding. Prelude Ventures and Safar Partners co-led, and were joined by Mitsubishi and Standard Investments. https://axios.link/4abkwFi

• Axion Ray, an SF-based AI observability platform, raised $17.5m in Series A funding. Bessemer Venture Partners led, and was joined by RTX Ventures, Amplo, and Inspired Capital. www.axionray.com

• Fermat, an SF-based retail customer journey optimization platform, raised $17m in Series A funding, per Axios Pro. Bain Capital Ventures led, and was joined by Greylock, QED Investors, and Courtside Ventures. https://axios.link/49URz0H

⚡ Lohum, an Indian battery tech company, raised $14.5m in Series B funding led by Singularity Growth. https://axios.link/3Ph4W36

🚑 Tierra Biosciences, a San Leandro, Calif.-based proteins development platform, raised $11.4m in Series A funding. Material Impact led, and was joined by Prosus Ventures, In-Q-Tel (IQT), Hillspire, Freeflow Ventures, Creative Ventures, and Social Capital. https://axios.link/3TcZak4

• DBOS, a Cambridge, Mass.-based database startup, raised $8.5m in seed funding. Engine Ventures led, and was joined by Construct Capital, Sinewave, and GutBrain Ventures. https://axios.link/49OwpRX

• Cache, an exchange fund product for accredited investors, raised $8.5m in seed funding co-led by First Round Capital and Quiet Capital, per Axios Pro. https://axios.link/4cdb0TU

• Elixir, a DeFi network maker aimed at boosting liquidity, raised $8m in Series B funding. Mysten Labs and Maelstrom co-led, and were joined by Manifold, Amber Group, GSR, and Flowdesk. https://axios.link/49LJaN5

• Murphy's Naturals, a Raleigh, N.C.-based insect repellent maker, raised $8m in Series B funding, per Axios Pro. Point King Capital led, and was joined by Emil Capital Partners. https://axios.link/3IAm3Jn

• Packfleet, a London-based all-electric parcel courier, raised £8m in Series A funding. General Catalyst and Voyager Ventures co-led, and were joined by Creandum, Entree Capital and Founder Collective. https://axios.link/3v8ASzI

• Big Sur AI, an Mountain View, Calif.-based e-commerce AI platform, raised $6.9m in seed funding, per Axios Pro. Lightspeed led, and was joined by Capital F. https://axios.link/49MX6qf

🚑 Foundation Health, an SF-based provider of pharmacy and telehealth APIs, raised $6m in seed funding from Garry Tan, Transpose Platform, Tuesday VC, Alt Capital, Box Group, Liquid Ventures, Exceptional Capital, Calm/Storm Ventures, and PageOne Ventures. www.foundationhealth.com

• NFTfi, an NFT lending protocol, raised $6m in Series A1 funding led by Placeholder VC. https://axios.link/4a77ecR

• Telo, a San Carlos, Calif.-based maker of electric pickup trucks, raised $5.4m from Neo and Spero Ventures. https://axios.link/3TiNv3c

• Metica, a London-based revenue optimization platform for mobile games, raised $5m in seed funding from Play Ventures, Firstminute Capital, and Riccardo Zacconi. www.metica.com

• Blockus, a web3 gaming tech stack and payments provider, collected $4m in pre-seed funding led by Maple VC. https://axios.link/3VfKQdo

🚑 Nest Health, a New Orleans-based VBC family health provider, raised $4m in new seed funding. SpringTide led, and was joined by Alumni Ventures and Ochsner Ventures. www.nesthealth.com

• OpenMeter, an SF-based provider of usage-based billing management software, raised $3m from YC, Haystack, and Sunflower Capital. https://axios.link/3wJYo6v

• Quantistry, a German chemical simulations startup, raised €3m. Ananda Impact Ventures led, and was joined by BASF and IBB Ventures. www.quantistry.com

• Synch, a New York-based GTM tool for sales teams, raised $3m in seed funding co-led by AltCap and Haystack. www.withsynch.com

• Visio.ai, a Brazilian profitability optimization platform for physical retailers, raised $2.5m in seed funding. DGF Investments led, and was joined by Alexia Ventures and Scale-Up Ventures. www.visio.ai

Private Equity Deals

🚑 DirectMed Imaging, a portfolio company of NMS Capital, acquired Houston-based Titanium Medical Imaging. www.directmedimaging.com

• Executive Platforms, a portfolio company of Falfurrias Capital Partners, acquired Board.org, a P2P executive community platform, from FiscalNote (NYSE: NOTE) for around $103m. https://axios.link/3wKimy0

🎵 HarbourView Equity Partners secured nearly $500 million in debt financing led by KKR to buy more music rights. https://axios.link/4a5B3v7

🚑 HCAP Partners acquired four behavioral health businesses in the Northeastern U.S. to form a new company called PAX Health. https://axios.link/3TeQGcn

⚡ Kimmeridge sweetened its takeover offer for Houston-based oil and gas producer Silverbow Resources (NYSE: SBOW) to $2.1b (including debt). https://axios.link/4a81VtS

🚑 Patient Square Capital made a $220m staking horse bid for the assets of NanoString, a Seattle-based life sciences tool developer that went bankrupt last month. https://axios.link/49Ro0wT

• Peak Rock Capital acquired CCFF, an Irwindale, Calif.-based provider of custom-formulated ingredients and flavors. www.ccff.com

🌍 True Environmental, a portfolio company of Halle Capital Management, acquired environmental consultancy Sundance Consulting. www.true-environmental.com

Public Offerings

🚑 Galderma, a Swiss skin care company owned by EQT, set terms for its Zurich IPO to CHF 49-53 per share, giving it an implied market cap of up to CHF 12.6b ($14.35b). https://axios.link/3Toe7RL

SPAC Stuff

• Nature's Miracle, an Upland, Calif.-based provider of indoor growing software and hardware, completed its merger with Lakeshore Acquisition II (Nasdaq: LBBB). https://axios.link/3wU9eXR

🚑 PepperLime Health Acquisition, a SPAC led by Ramzi Haidamus (ex-CEO of Immersion Corp.), has liquidated. It had raised $150m in a 2021 IPO. https://axios.link/43iwB9K

Liquidity Events

• Amadeus (Madrid: AMS) acquired Voxel, a Spanish B2B payments company for travel businesses, for €118m. Voxel had been seeded by Carat Venture Partners. https://axios.link/3vasShO

• Brookfield is in talks to buy a stake in Optus, the Australian unit of Singaporean telecom company SingTel, per Reuters. https://axios.link/3IBTkE2

⚡ Excelsior Energy Capital sold 38 solar and storage projects to BlackRock. https://axios.link/4cg3x6z

🚑 Impilo is seeking a buyer for Swedish rare disease drugmaker Immedica, which could fetch around $500m, per Bloomberg. https://axios.link/3V9NCkh

• Intuit (Nasdaq: INTU) acqui-hired Proper Finance, a SF-based reconciliation platform for companies that had raised $4m from BoxGroup, Redpoint and YC. www.properfinance.io

🚑 Linus Health, a Boston-based digital cognitive assessment startup that's raised over $60m from firms like Morningside, bought Aural Analytics, a Scottsdale, Ariz.-based speech analytics platform seeded by Morningside and Tamarisc Ventures. https://axios.link/3IFxZta

🚑 Mahana, an SF-based digital therapeutics company that's raised over $80m, acquired German peer Cara Care, which had raised around $19m from firms like Asabys Partners and J&J Innovation. https://axios.link/43dSoPC

• Nielsen, the audience analytics firm taken private in 2022 by Elliott Management and Brookfield, is weighing a sale of non-core assets that could fetch more than $1b, per Bloomberg. https://axios.link/3wPOnou

• Nordic Capital is seeking a buyer for Regnology, a German regulatory software firm that could fetch up to €3b, per Reuters. https://axios.link/43iGLXW

🚑 Novartis (NYSE: NBS) exercised its option to acquire an inflammation-focused subsidiary of IFM Therapeutics, a Boston-based startup whose backers include Atlas Venture, Abingworth, Omega Funds, and Novartis. The deal is valued at upwards of $835m, including $90m upfront.

More M&A

• ArcelorMittal (Ams: MT) agreed to buy a 28.4% stake in French steel tube maker Vallourec (Paris: VLLP) for around €955m. https://axios.link/3TxYtTL

• Direct Line Insurance (LSE: DLGD) rejected a sweetened £3.17b takeover offer from listed Belgian insurer Ageas. https://axios.link/3v5VubX

Fundraising

• Fulcrum Equity Partners of Atlanta raised $372m for its fifth fund. www.fulcrumep.com

• Italy's government is launching a €1b AI investment fund, which could raise another €2b from the private sector. https://axios.link/3uZol1H

• KSL Capital Partners, a private equity firm focused on travel and leisure businesses, raised $2b for its sixth fund. www.kslcapital.com

It's Personnel

• The Stephens Group promoted Allie Laborde to managing director of biz dev and Ryan Morrow to managing director. www.stephensgroup.com

Final Numbers

Data: MSCI Real Assets; Chart: Axios Visuals
Data: MSCI Real Assets; Chart: Axios Visuals

Investors have been poised to pounce on depressed office properties for a while, but there hasn't been much opportunity for actual deal-making, writes Axios' Kate Marino.

  • Activity is expected to pick up this year, finally giving some comfort to banks that hold about 38% of the trillions in outstanding U.S. commercial real estate debt.

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