Jun 21, 2019

Axios Pro Rata

By Dan Primack
Dan Primack

Happy Friday—which also means it's almost the weekend and almost time for Dan to return on Monday. Thanks for reading all week, and don't forget you can always send me your best gossip, tips, and scoops at kia@axios.com or via Twitter DM.

📺 This week on “Axios on HBO”: A 🔥 interview with California Gov. Gavin Newsom, how memes may be influencing Andrew Yang’s 2020 bid, plus the inequities of marijuana legalization. Tune in Sunday at 6 pm ET/PT. 

Top of the Morning

CFO Allen Shim (left), CEO Stewart Butterfield celebrate. Photo: Drew Angerer/Getty Images

Slack, the quirky workplace chat app, had a smooth opening day on the market yesterday for its direct listing. A few thoughts:

  • First day of trading was steady. The stock opened at $38.50, hit its highest price at $42 and lowest at $38.25, and closed at $38.62 (a mere 0.3% increase), at a market cap of just under $20 billion.
  • And no, it did not "pop" by 48%—$26 was a reference price only, so no one actually bought at that price.
  • But the real test will be to see what happens in the next couple of months.
  • And a reminder that one company that's especially keeping an eye on how Slack fares is Airbnb.
  • One more thing: Because Slack has managed to hire (relatively) more employees of underrepresented minority groups, its public debut yesterday also meant an influx of wealth for more folks of color than the typical tech IPO, as some like Erica Baker, Don Richard, and Leslie Miley highlighted.
  • In 2018, they made up 14.2% of Slack's U.S. technical positions, 13.0% of its U.S. managers, and 8.8% of its U.S. leadership team (these are typically the employees that get higher stock compensations at tech startups). Still, while these are higher percentages than big companies like Facebook and Google, there is room to improve.

VC concerns: There's been a lot of discussion of CFIUS's impact on startups and investments, but one Silicon Valley investor told me last night that the more realistic concern is M&A between U.S. and Chinese companies.

  • And speaking of M&A, the bummer for him and his peers, he said, is that the big tech companies like Facebook, Google, and Amazon won't be acquiring any big consumer companies for a while from fear of getting anti-trust scrutiny. (The small acquisitions will be fine, though, as will be large enterprise tech M&A—just look at Tableau and Looker's recent sales.)

🎙 Podcast: Guest host Felix Salmon, chief financial correspondent, discusses the decision by the Federal Reserve to not cut interest rates with Axios Markets reporter Courtenay Brown. In the "Final Two", Slack's direct listing and Facebook's new Libra coin. Listen here.

The BFD

Illustration: Lazaro Gamio/Axios

UnitedHealth Group has reportedly agreed to acquire Equian, an Indianapolis-based health-care payments firm, for about $3.2 billion from New Mountain Capital, according to the WSJ.

  • Why it's the BFD: UnitedHealth Group is the parent company of the largest U.S. health insurer, UnitedHealthcare, and is on an acquisition spree.
  • The bottom line: "It is likely that UnitedHealth would merge Equian into its Optum health-services arm, a rapidly growing part of its business that caters to insurers, hospitals and other health-care companies. Equian would add to its array of offerings and help Optum branch out beyond health care, since Equian has other types of insurers as clients as well." —Cara Lombardo, WSJ
Venture Capital Deals

Druva, a Sunnyvale, Ca.-based company that sells data protection software, backup and management solutions, has raised $130 million in new funding led by Viking Global Investors, with Neuberger Berman, Atreides Capital, Riverwood Capital, Tenaya Capital and Nexus Venture Partners also participating. http://axios.link/Z3NA

🚙 Swvl, an Egypt-based transportation startup that connects commuters with private buses, has raised $42 million in additional Series B funding led by Vostok Ventures and BECO Capital, with MSA, Endeavor Catalyst, OTF Jasoor Ventures, Sawari Ventures, Arzan VC, Blustone, Autotech, and Michael Lahyani also participating. http://axios.link/40tO

PsiKick, a Charlottesville, Va.-based developer of internet-of-things sensors, has raised $30 million in new funding led by Future Fund, with Blue Bear Capital, ABB Technology Ventures, New Enterprise Associates and Osage University Partners also participating. www.psikick.com

🚑 Vynca, a Palo Alto, Ca.-based provider of advance care planning tools, has raised $10.3 million in Series B funding from First Trust Capital Partners, OCA Ventures, Spectrum Health Ventures, Generator Ventures and the Ziegler LinkAge Longevity Fund. http://axios.link/Ekcd

ZeaKal, a San Diego, Calif.-based plant science company developing technology to vastly increase the yield and oil content of multiple crops, has raised $10 million in funding from Canopy Rivers. www.zeakal.com

MakerSights, a San Francisco-based provider of product decision engine for retail, has raised $8.5 million in Series A funding led by Forerunner Ventures, with Brett Hurt and Brant Barton, also participating. http://axios.link/kkjm

Private Equity Deals

LightBox’s acquisition of Digital Map Products, an Irvine, Calif.-based provider of location data tools, from Silversmith Capital Partners has closed. www.digmap.com

ClearCourse Partnership, backed by Aquiline Capital Partners, has acquired intelligentgolf, a UK-based provider of golf club and competition management software. www.intelligentgolf.co.uk

🚙 Hudson Hill Capital has acquired majority stakes in Global Transport Logistics and Am Trans Expedite to form Fusion Transport, a logistics holding company. www.gtli.net

Mayhoola has agreed to purchase a 43.91% share in Boyner Perakende, a Turkey-based fabric and apparel company owned by Boyner Holding and the Boyner Family, for $405 million per an agreement in May. http://axios.link/etbc

Falfurrias Capital Partners has agreed to acquire The C.F. Sauer Company, a Richmond, Va.-based manufacturer or condiments and spices. www.cfsauer.com/

Public Offerings

AMTD International, a Hong Kong-based financial services firm and investment bank, filed on Thursday to raise up to $200 million in an initial public offering. It plans to list on either the Nasdaq or the NYSE. AMTD Global Markets and Tiger Brokers are the joint bookrunners on the deal. No pricing terms were disclosed..http://axios.link/3Eh5

More M&A

Thomson Reuters has agreed to acquire Confirmation, a Nashville, Tenn.-based provider of digital audit confirmation tools. www.tr.com

Chevron Phillips Chemical Company has offered to acquire Nova Chemicals Corp, a Canada-based plastics company, for more than $15 billion including debt from Mubadala Investment Company, according to Reuters.

DataRobot has acquired ParallelM, a Santa Clara, Calif.-based provider of machine learning management software. http://axios.link/igq2

It's Personnel

Pitango Venture Capital has promoted Idit Muallem-Yedid and Yair Cassuto to general partner. http://axios.link/EyAf

Shannon Kennedy has joined BMO Family Office as its global head. Previously, Kennedy was president of U.S. markets-Southwest at BNY Mellon Wealth Management. www.wealth.bmoharris.com

Encore Consumer Capital has promoted Kate Wallman to director. www.EncoreConsumerCapital.com

Final Numbers

Courtesy of Menlo Ventures

Dan Primack