Jun 12, 2020

Axios Pro Rata

By Dan Primack
Dan Primack

🎧 Check out the trailer for Axios Re:Cap, my new afternoon podcast launching Monday. And please be sure to subscribe (yes, it's free):

Top of the Morning

Illustration: Aïda Amer/Axios

The U.S. Treasury Department is leaning against releasing the names of small businesses that received Paycheck Protection Program loans, as first reported by Politico and confirmed by Axios.

Why it matters: Taxpayers bailed out millions of small businesses with hundreds of billions of dollars. But they may never know where the money went ⁠— a lack of transparency that could make it harder to know how well the program worked, or if certain applications were fraudulent.

Context: PPP was structured under the SBA's Section 7(a) loan program. Historically, business recipients of Section 7(a) loans have had their names and loan amounts publicly disclosed on an annual basis.

What we're hearing: Treasury Secretary Steven Mnuchin is concerned that disclosing business names and loan amounts could put recipients at a competitive disadvantage, because PPP loans were calculated by payroll.

  • For example, one business could possibly discern how much another company pays its employees, via the PPP loan disclosure.

What we're thinking: Mnuchin's concern is valid, but only to a limited point.

  • A competitor would need to know how many employees a business has, in order to calculate average compensation. And, if a competitor knows the number of employees, it probably has pretty good insight into compensation.
  • PPP calculations were based on backward-looking payroll, has no information on job titles, and doesn't include any salary dollars in excess of $100,000 (i.e., someone making $200k was counted as making $100k).

The bottom line: Congress wants this information for oversight, and there’s nothing in the CARES Act legislation that promises confidentiality to loan applicants or recipients. Given that Mnuchin is publicly talking about a new round of stimulus, it’s hard to imagine that the two sides won’t reach some sort of compromise soon.

The BFD
Source: Giphy

Novo Nordisk of Denmark agreed to buy Corvidia Therapeutics, a Waltham, Mass.-based developer of an antibody to treat cardio-renal disease, for upwards of $2.1 billion (including $725 million upfront).

  • Why it's the BFD: It's Novo Nordisk's largest-ever acquisition, and reflects its ambitions to move beyond diabetes.
  • ROI: Corvidia had raised around $91 million in venture capital from firms like Sofinnova Partners, Venrock, Fresenius, HBM Healthcare Investments, and Cormorant Asset Management.
  • Bonus: Reata Pharma (Nasdaq: RETA), whose lead candidate also focuses on chronic kidney disease, just secured a $350 million investment from Blackstone Life Sciences.
  • The bottom line: "The antibody is in a phase 2b dose-finding trial to reduce the risk of heart problems in patients with chronic kidney disease who also have atherosclerosis, the buildup of fats, cholesterol and other substances in the artery walls. Having led six cardiovascular outcomes trials for its own medicines, like Victoza and Ozempic, which were both were developed for diabetes, Novo is prepared to move its new antibody into phase 3." — Amirah Al Idrus, FierceBiotech
Venture Capital Deals

Instacart, a San Francisco-based grocery delivery company, secured $225 million at a $13.7 billion valuation from DST Global, General Catalyst, and return backer D1 Capital Partners. http://axios.link/L3eS

Kahoot, an Oslo-based educational gaming startup, raised $28 million in new funding from existing backers like Northzone. It also closed on a $62 million secondary share sale. http://axios.link/O1QJ

HeadLight (fka Pavia Systems), a Seattle-based developer of photo-based inspection tech, raised $25.6 million in Series B funding from Viking Global Investors. http://axios.link/Fe7s

🚑 Glyscend Therapeutics, a Baltimore-based developer of oral treatments for Type 2 diabetes, raised $20.5 million in Series A funding co-led by Brandon Capital Partners and Santé Ventures. www.glyscend.com

Jiffy.ai, a Palo Alto-based enterprise automation startup , raised $18 million in Series A funding. Nexus Venture Partners led, and was joined by Rebright Partners, W250 Venture Fund, and individual angels. http://axios.link/AGBz

Haus Services, a San Francisco-based provider of homeowner liquidity solutions, raised nearly $16 million in Series A funding. BlueRun Ventures led, and was joined by by Assurant Growth Investing, Leap Global Partners, Correlation Ventures, H.Barton Asset Management, Expa, Montage Ventures, and RIT Capital. http://axios.link/xcK6

🚑 Conversa Health, a Portland, Ore.-based patient engagement platform, raised $12 million in Series B funding. Builders VC and Northwell Ventures co-led, and were joined by P5 Health Ventures, Nassau Street Ventures, and UH Ventures. http://axios.link/mq9M

Origin, a San Francisco-based provider of financial planning benefits for employees, raised $12 million. Felicis Ventures led, and was joined by General Catalyst, Founders Fund, and Lachy Groom. http://axios.link/VMMy

🚑 CareAcademy, a Boston-based senior care training platform, raised $9.5 million. Impact America Fund led, and was joined by Rethink Impact, ReThink Education, Revolution Rise of the Rest, Wanxiang America Healthcare Investment, Techstars Ventures, Strada, and ECMC. http://axios.link/3jrw

Spike, a new email app, raised $8 million in Series A funding. Insight Partners led, and was joined by Wix, NFX, and Koa Labs. http://axios.link/2vg5

Zeitworks, a Seattle-based business process improvement startup, raised $4.5 million in seed funding. Madrona Venture Group led, and was joined by Jazz Venture Partners and Spencer Rascoff. http://axios.link/BieA

Energysquare, a French wireless charging startup, raised €3 million from Partech. http://axios.link/Z9Xm

Veros Systems, an Austin, Texas-based AI startup focused on the performance and maintenance of industrial machinery, raised $2.2 million in Series C funding. Shell Ventures led, and was joined by Austin Ventures, Chevron Technology Ventures, and LiveOak Venture Partners. http://axios.link/enQO

Private Equity Deals

Bain Capital made a 3 billion tentative offer for around a 25% stake in Italian soccer league Serie A, including a piece of its broadcasting rights business, per Bloomberg. This puts Bain in competition with existing Serie A suitor CVC Capital Partners. http://axios.link/MCTW

Searchlight Capital Partners acquired Global Risk Partners, a British independent insurance intermediary. www.grpgroup.co.uk

Public Offerings

🚑 Avidity Biosciences, a La Jolla, Calif.-based biotech startup focused on rare muscle disorders, raised $259 million in its IPO. The company priced 14.4 million shares at $18, versus plans to offer 10 million at $14-$16, for an initial market cap of $593 million. It will list on the Nasdaq (RNA), used Cowen as lead underwriter, and had raised $145 million in VC funding from firms like RTW Investments (14.5% pre-IPO stake), Cormorant Asset Management (10.6%), Eli Lilly (10.4%), Alethea Capital (8.2%), and EcoR1 Capital (6.2%). The company plans to trade on the Nasdaq (RNA) with Cowen as left lead underwriter. http://axios.link/2X3Q

The AZEK Co., a Chicago-based manufacturer of composite building products, raised $765 million in its IPO. The company priced 33.3 million shares at $23, versus plans to offer 31.2 million at $19-$21, for a fully diluted market value of $3.4 billion. It will list on the NYSE (AZEK), used Barclays as lead underwriter, and reports a $20 million net loss on $794 million in revenue for fiscal 2019. Shareholders include Ares Management and Ontario Teachers’ Pension Plan. http://axios.link/mtpP

🚑 Generation Bio, a Cambridge, Mass.-based gene therapy company focused on hemophilia and phenylketonuria, raised $200 million in its IPO. The pre-revenue company pieced 10.5 million shares at $19, versus original plans to offer 7.4 million at $16-$18, for a fully diluted market value of $916 million. It will list on the Nasdaq (GBIO), used JPMorgan as lead underwriter, and had raised over $230 million in VC funding from firms like Atlas Venture (37% pre-IPO stake), Fidelity (14.9%), T. Rowe Price (8.9%), and Invus (5.9%). http://axios.link/TNpg

🚑 Lantern Pharma, a Dallas-based developer of drugs for multidrug resistance cancers, raised $26 million in its IPO. The company priced 1.8 million shares at $15 (low end of range), for an initial market cap of $90 million. It will list on the Nasdaq (LTRN), used ThinkEquity as lead underwriter, and had raised around $7 million in VC funding from firms like BIOS Partners and GPG Ventures. http://axios.link/xBY2

Palantir Technologies plans to file confidential IPO papers in the next few weeks, ahead of a fall listing, per Bloomberg. This is in keeping with what Palantir CEO Alex Karp recently told Axios on HBO.

Liquidity Events

Nestle Health Science acquired a majority stake in Vital Proteins, a Chicago-based collagen brand. Sellers include CAVU Venture Partners. http://axios.link/ciGF

More M&A

British antitrust regulators have launched an investigation into Facebook’s (Nasdaq: FB) acquisition of Giphy. http://axios.link/ntti

DSM, a Dutch food supplements company, will pay €980 million to buy most of the operations of Austrian animal feeds additives maker Erber Group. http://axios.link/KW7G

ExxonMobil (NYSE: XOM) plans to restart the sale of its British North Sea assets, for which it originally hoped to fetch over $2 billion, per Reuters. http://axios.link/nLei

Nestle said it’s considering a sale of its U.S. bottled water business, which includes Poland Spring and Deer Park. A deal reportedly could fetch north of $7 billion. http://axios.link/DkGy

Fundraising

Endeavour Capital, a Portland, Ore.-based mid-market private equity firm, is raising $850 million for its eighth fund, per an SEC filing. www.endeavourcapital.com

It's Personnel

Stephane Kurgan, former COO of King, joined Index Ventures as a venture partner. http://axios.link/wUMO

Final Numbers: IPO activity by sector
Source: Renaissance Capital. Data for 12 month period ending 6/12/20
Dan Primack

🙏 Thanks for reading Axios Pro Rata! Please ask your friends, colleagues, and data divers to sign up.