Dec 6, 2017

Axios Pro Rata

By Dan Primack
Dan Primack

Greetings from the home office, where it's good to be back after a couple of days in Half Moon Bay. I'd love your tips and feedback at dan@axios.com or anonymously via http://axios.com/tips. Or Twitter DMs, Signal, Confide, Telegram, Messenger, etc (Dan Primack / 857-472-3072). Okay, here we go...

Top of the Morning

• New fund alert: Apax Partners tells Axios that it has closed on its debut growth equity fund with $1 billion in capital commitments. It's called Apax Digital, and is led by Dan O'Keefe, who rejoined Apax from TCV last fall, and Marcelo Gigliani, who has been making tech investments for Apax for the past 18 years.

  • The fund target had been $800 million, with a $1 billion hard cap. Expect around half the deals to be for majority stakes.
  • It plans a fairly even split between enterprise and consumer tech. Areas of specific focus will include tech-enabled services and marketplaces.
  • It's a global fund that launches with 11 staffers in New York and three in London, but plans to leverage Apax's eight global offices and 125-person team.
  • Apax Digital's first deal is co-leading a $165 million round for Moda Operandi, an online "pre-tailer" for highh-end fashion, alongside South Korea's K11 Investments.

• Yesterday I noted Silicon Valley's relative quiet when it came to the sexual harassment allegations against venture capitalist Shervin Pishevar, and we may have discovered at least one reason: Pishevar's attorneys have sent document hold requests to a number of people who may be involved in what he has termed a "smear campaign."

  • What's that mean? Document hold requests are sometimes sent by litigators between the filing of a complaint (as Pishevar did early last month against political research firm Definers) and discovery (when subpoenas can be served). The basic idea is that recipients must retain all relevant documentation (emails, texts, etc.) related to the matter at hand.
  • Update: Pishevar yesterday took a leave from his responsibilities at Sherpa Capital, Virgin Hyperloop One, Silicon Foundry and his portfolio company boards.
  • In quasi-related news: Former Uber engineer Susan Fowler is among those on the cover of Time Magazine's Person of the Year issue, which gave its highest honor to The Silence Breakers.

• The path not taken: Stitch Fix wouldn't have gone public last week if SoftBank had gotten its way. The Japanese giant, alongside Yuri Milner's DST, made a last-minute investment offer that would have indefinitely delayed the fashion subscription company's IPO, per multiple sources.

The BFD

UnitedHealth DaVita (NYSE: UNH) has agreed to acquire DaVita Medical Group, an operator of 300 clinics and 6 outpatient surgical centers, from dialysis center operator DaVita (NYSE: DVA) for around $4.9 billion in cash.

  • Why it's the BFD: Because this is now the second time in a week that we've seen a major merger mashup of health insurance with healthcare services. The first, of course, was CVS buying Aetna. It basically seems like the Kaiser Permanente model has won out.
  • Bottom line: "For DaVita, the medical group has significantly underperformed the company's dialysis division. Last month, DMG posted a $5 million operating loss in the third quarter due to higher-than-expected medical costs, prompting the company to put the unit up for sale." — Bertha Coombs, CNBC
Venture Capital Deals

• Lyft has closed the $500 million extension to its CapitalG-led Series H funding round (total now of $1.5b), which we first discussed last month. New backers include Fidelity, which is an existing Uber investor. http://axios.link/TSDe

🚑 Medlinker, a Chinese social networking platform for physicians, has raised around $60 million in Series C funding. CEC Data led, and was joined by return backers Sequoia Capital China and Tencent. http://axios.link/NsKl

🚑 Obsidian Therapeutics, a Cambridge, Mass.-based developer of cell and gene therapies with pharmacologic operating systems, has raised $49.5 million in Series A funding. GV led, and was joined by founding investor Atlas Venture. Other participants include Takeda Ventures, Vertex Ventures HC, Amgen Ventures, Alexandria Venture Investments and ShangPharma Investment Group. http://axios.link/43hZ

• LaunchDarkly, a San Francisco-based platform that enables software teams to test and measure new features, has raised $21 million in new funding co-led by Redpoint Ventures and Vertex Ventures. Existing backers include DFJ, Uncork Capital and Bloomberg Beta. http://axios.link/Xo5s

• Pilotworks (f.k.a. Foodworks), a New York-based space-as-a-service startup for food companies, has raised $13 million in Series A funding co-led by Techstars Ventures and Acre Venture Partners. http://axios.link/Jf2x

🚑 Asilomar Bio, a San Francisco-based developer of technologies to improve agricultural harvest yields, has raised around $12 million in Series B funding. Syngenta Ventures and Cavallo Ventures co-led, and were joined by Fall Line Capital and Cultivian Sandbox. www.asilomarbio.com

• Pi Charging, a San Bruno, Calif.-based wireless charging startup, has raised $11.9 million in funding, per an SEC filing. Backers include Foundry Group and Uncorked Capital. www.picharging.com

• NS8, an Arlington, Va.-based provider of fraud protection solutions for online businesses like e-commerce, has raised $7.5 million in seed funding. Arbor Ventures led, and was joined by TDF Ventures and Hanna Capital. http://axios.link/726H

🚑 VirtualHealth, a New York-based provider of population health and care management technologies, has raised $7 million in growth equity funding from Edison Partners. www.virtualhealth.com

🚑 Health2Sync, a Taiwan-based diabetes tracking service, has raised $6 million in Series B funding. Sompo Holdings led, and was joined by return backers Alibaba and WI Harper. http://axios.link/b0sf

• Stateless, a Boulder, Colo.-based network functions as-a-service startup, has raised $1.4 million in seed funding. Speedinvest led, and was joined by EVO Venture Partners, Techstars, PV Ventures and Service Provider Capital. http://axios.link/SMPP

Private Equity Deals

• Abry Partners has acquired a majority stake in Breakthrough Technology Group, a Morganville, N.J.-based provider of private cloud services. www.btgroupinc.com

🚑 ERT, a Philadelphia-based portfolio company of Nordic Capital, has acquired iCardiac Technologies, a Palo Alto, Calif.-based provider of cardiac safety assessment services, from Norwest Equity Partners. http://axios.link/X5Jn

• House of Fara, a La Porte, Ind.-based portfolio of Industrial Opportunity Partners, has acquired the assets of Alexandria Molding, a maker and distributor of wood moldings and related millwork products. www.houseoffara.com

• Vee Pak, a Hodgkins, Ill.-based portfolio company of Wind Point Partners, has acquired Aware, a Los Angeles-based formulator and contract manufacturer for the beauty market. www.veepak.com

Public Offerings

Liquidity Events

• Lindsay Goldberg has agreed to sell Crane Currency, a Dalton, Mass.-based provider of micro-optic security technology for banknotes, for around $800 million from Crane Co. (NYSE: CR). http://axios.link/oIdY

• Nestlé (Swiss: NESN) has agreed to acquire Canadian diet supplement maker Atrium Innovations from Permira for US$2.3 billion. http://axios.link/47gL

• Willis Stein has sold the assets of FDH Velocitel, a Northbrook, Ill.-based provider of wireless infrastructure services, to King of Prussia, Penn.-based QualTek. www.fdhvelocitel.com

More M&A

🚑 DaVita (NYSE: DVA) has agreed to sell its physician network business to UnitedHealth (NYSE: UNH) for $4.9 billion in cash. http://axios.link/3prA

• Elliott Management has amassed a 5.3% interest in German utility Uniper, which recently received an €8 billion takeover offer from Finland's Fortum. http://axios.link/rdVF

• Hammerson (LSE: HMSO) has agreed to acquire rival shopping center investment firm Intu Properties (LSE: INTUP) for around £3.4 billion. http://axios.link/5ARW

• Legal & General (LSE: LGEN) has agreed to sell a £33 billion mature life insurance portfolio to Swiss Re for £650 million. http://axios.link/dFNl

• Rogers Communications (TSX: RCI) is seeking to sell both The Toronto Blue Jays baseball club and its 36.5% stake in Canadian media company Cogeco (TSX: CGO). http://axios.link/o9OW

Fundraising

• Benefit Street Partners, the credit investment arm of Providence Equity Partners, has closed its fourth flagship fund with $2.55 billion in capital commitments. It also raised $750 million for its first special situations fund. www.benefitstreetpartners.com

• CrossCut Ventures, a Los Angeles-based seed investment firm, has raised $125 million for its fourth fund. http://axios.link/dZ0c

• Dream Machine, a Palo Alto-based VC firm led by former TechCrunch co-editor Alexia Tsotsis Bonatsos, is raising up to $25 million for its debut fund, per an SEC filing. Pro Rata first reported on her plans back in January, when they were still preliminary and Axios didn't yet have a website.

• Hopu Investments, a Chinese private equity firm, is raising up to $2.5 billion for a new fund, per Reuters. It already has secured around $1 billion in commitments form CIC, Temasek and Mitsui & Co. http://axios.link/kkpU

• Viola FinTech, an Israeli venture firm, has held a $100 million first close for its debut fund, which could raise upwards of $150 million. http://axios.link/ZtOr

It's Personnel

• Beth Ferreira has joined New York-based venture firm FirstMark Capital as a managing director. She previously was managing partner of WME Ventures. http://axios.link/euEX

• Hilarie Koplow-McAdams has joined NEA as a Menlo Park-based venture partner. She previously was president of New Relic (NYSE: NEWR) and, before that, spent time at both Oracle and Salesforce. www.nea.com

Dan Primack