Axios Pro Rata

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December 04, 2023

Top of the Morning

Illustration of a robot emoji inside quotation marks.

Illustration: Maura Losch/Axios

It was only a matter of time before venture capitalists got their own generative AI chatbot, to help them save money on outside lawyers and accountants.

Driving the news: The free new tool is called Decile Base.

  • It was developed by VC Lab, a sort of "YC for VCs" that has accelerated nearly 400 venture firms (65% of which are solo GPs) since its 2021 launch.
  • VC Lab has a Slack channel for managers to ask questions to industry experts, and decided to convert more than a thousand of those conversations into a large language model, using OpenAI's API.
  • Decile Base covers everything from fundraising to compliance to taxes to fund economics.

What they're saying: "It's not always right, but it's shockingly right and can save lots of calls to a $1,700 per hour fund formation attorney," says VC Lab CEO Adeo Ressi.

  • "In venture there always will be someone looking over what you're doing β€” that's the safety net β€” but you often can't make any decisions before consulting with those people first, which can be difficult, time consuming and expensive."
  • Ressi adds that Decile Base won't provide an answer it doesn't know (i.e., hallucinate), noting that it comes up empty around one in every 30 questions.
  • If you do play around with it, very interested in hearing your thoughts. Particularly if you're one of those high-priced professionals.

The bottom line: Venture capitalists are investing billions of dollars into generative AI, which already is beginning to revolutionize (and replace) types of white-collar work. It's not unreasonable to wonder how much longer until a lot of the investment decisions themselves can be automated.

The BFD

Safety Dance Travel GIF by Alaska Airlines - Find & Share on GIPHY
Source: Giphy

Alaska Air (NYSE: ALK) has agreed to acquire Hawaiian Airlines (Nasdaq: HA) for around $1.9 billion in cash.

Why it's the BFD: Is there an Inuit word for chutzpah? The Biden administration loathes airline mergers, as evidenced by its current case against JetBlue/Spirit and its past efforts to dissolve the JetBlue/American partnership.

Details: Alaska, the fifth-largest U.S. carrier, would pay $18 per share, representing a whopping 270% premium over Friday's closing price. It also will assume $900 million in Hawaiian Airlines debt, which is included in the $1.9 billion purchase price.

The bottom line: "The deal could provide a valuable lifeline to Hawaiian, whose stock has tumbled more than 52% this year. The company has been hurt by the slow return of tourism between Asia and Hawaii following the pandemic and a ramp up in growth in the Hawaii-to-mainland US market by Southwest Airlines." β€” Mary Schlangenstein, Bloomberg

Venture Capital Deals

πŸš‘ Seismic Therapeutic, a Cambridge, Mass.-based immunology biotech, raised $121m in Series B funding. Bessemer Venture Partners led, and was joined by Amgen Ventures, Codon Capital, Alexandria Venture Investments, Gaingels, GC&H and insiders Timothy Springer, Lightspeed Venture Partners, Polaris Partners, Boxer Capital, GV and Samsara BioCapital. https://axios.link/47S463E

β€’ ArmorCode, a Palo Alto, Calif.-based AppSecOps platform, raised $40m in Series B finding. HighlandX led, and was joined by NGP Capital, Ballistic Ventures, Sierra Ventures and Cervin Ventures. https://axios.link/3RqO6jx

β€’ Keboola, a Czech data ops platform, raised $32m in Series A funding. Viking Global led, and was joined by Presto Ventures, Reflex Capital, TCF Capital and Avast co-founder Eduard Kučera. https://axios.link/3sSfr53

⚑ AM Batteries, a Chelmsford, Mass.-based battery equipment startup, raised $30m in Series B funding, per Axios Pro. Toyota led, and was joined by Porsche, Asahi Kasei and RA Capital. https://axios.link/3NegJ0Z

β€’ Rohirrim, a Reston, Va.-based developer of domain-aware generative AI for the enterprise, raised $15m in Series A funding. Insight Partners led, and was joined by General Purpose VC. www.rohirrim.ai

β€’ Extropic, a stealth AI startup, raised $14.1m in seed funding. Kindred Ventures led, and was joined by Buckley Ventures, HOF Capital, Julian Capital, Marque VC, OSS Capital, Valor Equity Partners and the Weekend Fund. www.extropic.ai

β€’ Gravel, a Jakarta-based construction worker marketplace, raised $14m from NEA, SMDV, East Ventures, Weili Tai and Lip-Bu Tan. https://axios.link/3RrRD07

β€’ January, a New York-based debt collection startup, raised $12m in Series B funding led by insider IA Ventures, per Axios Pro. https://axios.link/481Qe6V

β€’ Cloudsmith, a Belfast-based software supply chain management startup, raised $11m in Series A2 funding led by MMC Ventures. https://axios.link/3t14D4t

β€’ CoreWeave, a Roseland, N.J.-based cloud computing platform, closed a $642m secondary sale at around a $7b valuation. Fidelity led, and was joined by Investment Management Corp. of Ontario, Jane Street, JPMorgan, Goanna Capital, Zoom Ventures and Nat Friedman. https://axios.link/414SS9Q

Private Equity Deals

β€’ Beach Point invested in Eurofase, a Toronto-based maker of lighting and heating products. www.eurofase.com

β€’ Capitol Meridian Partners invested in Clarity Innovations, a Columbia, Md.-based provider of data and cyber analytics solutions to the U.S. national security community. www.clarityinnovates.com

πŸš‘ Concentra Biosciences, a San Diego-based portfolio company of Tang Capital Partners, offered to buy LianBio (Nasdaq: LIAN), a Chinese developer of a drug to treat obstructive hypertrophic cardiomyopathy, for around $465m. https://axios.link/3GsyyFN

🎡 Francisco Partners is sponsoring the merger of Hal Leonard, a Milwaukee-based sheet music publisher, and Muse Group, an SF-based music content and creation company. Hal Leonard previously was owned by Seidler Equity Partners. www.halleonard.com

β€’ Harrington Process Solutions, a Chino, Calif.-based portfolio company of Bain Capital, acquired PumpMan, a Saddle Brook, N.J.-based provider of maintenance and repair for water and wastewater pumping systems, from Soundcore Capital Partners and Graycliff Partners. www.hipco.com

β€’ Brad Jacobs, founder of XPO Logistics, is forming a publicly-listed acquisition platform via a $1 billion investment in SilverSun Technology (Nasdaq: SSNT), whose own business will be spun out. The first $900m comes from Jacobs Private Equity, while another $100m comes from Sequoia Heritage. https://axios.link/3uSpozG

πŸš‘ Lee Equity Partners and Elements Health Investors recapitalized Carisk Partners, a Miami-based specialty risk transfer and care coordination company that previously was owned by MBF Healthcare Partners. www.cariskpartners.com

β€’ Luxor Capital Group acquired Volta Trucks, the bankrupt Swedish commercial EV maker in which Luxor had previously invested. https://axios.link/3R6VPlx

β€’ ParentSquare, a Goleta, Calif.-based portfolio company of Serent Capital, acquired Remind, a San Ramon, Calif.-based platform for connecting educators with students and families. Remind previously raised over $125m from firms like Kleiner Perkins, Owl Ventures, Quiet Capital, Bling Capital, GSV Capital, Social Capital and First Round Capital. www.parentsquare.com

πŸš‘ PerkinElmer, a Wellesley, Mass.-based provider of analytical services to the life sciences and food markets, acquired Covaris, a Woburn, Mass.-based provider of sample prep tools. Both are portfolio companies of New Mountain Capital. www.covaris.com

πŸš‘ Resurgens Technology Partners acquired Valant Medical Solutions, a Seattle-based provider of EHR and practice management SaaS, from Gemspring Capital. www.valant.io

β€’ Truelink Capital acquired Ansira, a St. Louis-based provider of marketing solutions for brands. www.ansira.com

Public Offerings

β€’ Fibra Next, a Mexican industrial property trust being carved out of Fibra Uno Administracion, is pushing its IPO plans into 2024, per Bloomberg. It's expected to target around $1.5b. https://axios.link/3Tg7kJY

πŸš‘ PureHealth, a Dubai-based health lab group backed by ADQ, plans to raise nearly $1b in a local IPO. https://axios.link/3uJhfxI

πŸš‘ Aimei Health Technology, a small-cap health care SPAC, raised $60m in its IPO. https://axios.link/419RdzW

Liquidity Events

πŸš‘ Roche (Swiss: ROG) has agreed to pay $2.7b upfront for Carmot Therapeutics, a Berkeley, Calif.-based developer of anti-obesity drugs that last month filed for an IPO. Carmot has raised around $375m from firms The Column Group (40.27% pre-IPO stake), RA Capital Management (7.2%), Deep Track Capital (5.8%), ADIA (5.6%), Horizons Ventures and Willett Advisors.

  • Axios Pro Health Tech last Friday did a deep dive into the anti-obesity drug deal market. Subscribers can find it here.

β€’ Allen Career Institute is paying $10m to buy Doubtnut, an Indian math and science learning startup that raised over $50m from firms like SIG, Lupa Systems, Peak XV Partners, Omidyar Network India and Waterbridge Ventures. Doubtnut once rejected a $150m takeover offer from Byju's. https://axios.link/3TbRq3o

πŸš‘ Imaware, a home health test provider whose backers include McNair Interests and Undeterred Capital, acquired the consumer testing unit of Cambridge, Mass.-based Binx Health in an all-cash deal, per Axios Pro. Binx has raised nearly $200m from firms like EQT Life Sciences, RMI Partners, Novartis, OrbiMed and J&J. https://axios.link/3uETaYF

β€’ Neiman Marcus rejected a $3b takeover offer from fellow department store retailer Saks Fifth Avenue, per the WSJ. Neiman Marcus owners include PIMCO, Sixth Street Capital, Farfetch, and Davidson Kempner. https://axios.link/3T8pAoQ

β€’ Reverence Capital Partners is seeking to sell up to a 20% stake in Osaic, a Phoenix-based wealth management group, per Bloomberg. The deal could be valued at $2.5b. https://axios.link/3RqnuPE

β€’ Thoma Bravo completed its $3.6b sale of Imperva, a San Mateo, Calif.-based cybersecurity company, to Thales (Paris: HO). https://axios.link/3QaXhV2

β€’ Vestar Capital Partners sold Edward Don & Co., a Woodridge, Ill.-based distributor of foodservice equipment and supplies, to Sysco (NYSE: SYY). www.don.com

More M&A

β€’ BPCE of Paris is exploring strategic options for Natixis Investment Managers, including a majority stake sale, per Bloomberg. https://axios.link/3sSOfmJ

⚑ Equitrans Midstream (NYSE: ETRN), a natural gas pipeline operator with a market cap of nearly $4b, is seeking a buyer, per Bloomberg. https://axios.link/41341YJ

⚑ Petrofac (LSE: PFC), a London-based oilfield services firm, said it's in talks to sell some non-core assets. https://axios.link/4a1EqDB

β€’ Worldline (Paris: WLN), a French digital payments firm, is considering asset sales, per Reuters. https://axios.link/3uK6ZoU

Fundraising

β€’ American Securities is targeting $7b for its ninth flagship buyout fund, per PE International. https://axios.link/3Gqv6eX

🌎 CalSTRS acquired a minority stake in Just Climate, a climate-focused investment firm formed by Generation Investment management. The pension system already was an LP in Just Climate's $1.5b industrial decarbonization fund. https://axios.link/3NdPkw5

It's Personnel

β€’ Shane Battier, a former NBA player, joined Garnett Station Partners as a senior advisor. www.garnettstation.com

β€’ Adam Cady is stepping down as head of financial sponsors at Bank of America to join Lazard, per Bloomberg. https://axios.link/47AMKse

⚑ Abdulaziz Al-Gudaimi, former EVP of corp dev at Aramco, joined EIG as a senior advisor and chair of MENA operations. www.eigpartners.com

β€’ Warburg Pincus promoted India head Vishal Mahadevia to head of Asia private equity, and Min Fang and Ben Zhou to succeed Frank Wei as head of China. https://axios.link/3RaxxHz

Final Numbers

Data: Yahoo Finance; Chart: Axios Visuals
Data: Yahoo Finance; Chart: Axios Visuals

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