Feb 24, 2021

Axios Pro Rata

🎧 Axios Re:Cap talks to Yale's Jeff Sonnenfeld about if CEOs will stick to their political donation bans. Listen via Apple, Spotify or Axios.

  • Today's episode will feature Heather Higginbottom, president of JPMorgan Chase PolicyCenter, about why the Wall Street giant is pushing for policy changes for the first time (as Axios Closer scooped yesterday. Subscribe.)

🚨 Golub Capital became the second firm to sue Dyal Capital Partners, in an effort to block its merger with Owl Rock Capital and go public via SPAC.

Top of the Morning

Illustration: AĂŻda Amer/Axios

Reid Hoffman knows he isn't the first person who comes to mind when you hear "flying taxis."

  • But the LinkedIn co-founder and venture capitalist insists that his latest deal is more than SPAC silliness, and that its success will be heavily reliant on the sorts of network effects that are in his historical wheelhouse.

Driving the news: Reinvent Technology Partners, a SPAC led by Hoffman and Zynga founder Mark Pincus, this morning agreed to buy Joby Aviation, which has been developing its electric flying vehicles since 2009.

  • The deal values Joby at $6.6 billion, compared to a $2.6 billion mark when Toyota led a Series C investment in January 2020.
  • It includes an $835 million PIPE and additional investment from Uber, which sold its Uber Elevate unit to Joby late last year. Joby spent most of its first decade working on hardware, and the Uber assets will form the basis of its consumer/pilot software network.

The plan: Joby, which agreed to a certification basis with the FAA last year, hopes for actual certification in 2023 and to begin commercial flights in 2024.

  • It hasn't yet picked its inaugural city, but has begun preliminary discussions with candidates.
  • Flights could be for between 5–150 miles, initially via both Joby's own "skyports" and existing infrastructure (helipads, etc).
  • Paul Sciarra, Joby's executive chair and co-founder of Pinterest, tells Axios: "At the beginning we think we'd start a little under Uber Black pricing."
  • Sciarra adds that Joby's decision to manage its own fleet is a bit reminiscent of how Boeing originally created and operated United Airlines.

Go ahead, be skeptical. It remains difficult to picture an urban skyline pockmarked by eVTOLs ("The Fifth Element" notwithstanding). But Hoffman sincerely believes that's just a failure of imagination, particularly given that Joby's engineers seem to have solved the "noise" problem (video here, go to 1:45).

The bottom line: This is another instance of a SPAC giving retail investors an opportunity to invest in a revolutionary, pre-revenue company. Very high risks, very high rewards.

The BFD

Illustration: AĂŻda Amer/Axios

L Brands (NYSE: LB) hired Goldman Sachs to find a buyer for retailer Victoria's Secret, per the N.Y. Times. Private equity is expected to dominate the call sheet.

  • Why it's the BFD: This comes less than one year after an agreed-upon sale to Sycamore Partners was scuttled by the pandemic, sparking a series of lawsuits that ultimately ended in a mutual whimper.
  • Pricing: Sycamore's deal would have valued VS at around $1.1 billion, although L Brands is likely to seek more this time around. L Brands' market cap has more than doubled since the start of 2020, and investors recently valued rival lingerie brand Savage x Fenty at $1 billion.
  • The bottom line: "Victoria’s Secret has embarked on a turnaround effort since the Sycamore sale collapsed. A priority has been overhauling its brand, as younger customers shunned its overtly sexy products for alternatives focused on comfort and criticized its marketing as exclusionary." — Lauren Hirsch, NYT
Venture Capital Deals

• Klarna, a Swedish online payment platform, is raising upwards of $1 billion in new funding at a $31 billion valuation, per Bloomberg. http://axios.link/hovR

• Yuanfudao, a Beijing-based online tutoring platform, is raising upwards of $1 billion at a valuation north of $20 billion, with both Boyu Capital and DCP Capital among possible investors, per Bloomberg. Existing backers include Hillhouse Capital and Tencent. http://axios.link/jiVg

đźš‘ Orna Therapeutics, a Cambridge, Mass.-based developer of engineered circular RNA therapeutics, raised $80 million in Series A funding from MPM Capital, Taiho Ventures, F2 Ventures, PAGS Group, Bristol Myers Squibb, Novartis, Astellas Venture Management and Kite Pharma. http://axios.link/bWPI

⚡ Malta, a Cambridge, Mass.-based developer of long-duration energy storage solutions, raised $50 million in Series B funding. Proman led, and was joined by Dustin Moskovitz and insiders Alfa Laval and Breakthrough Energy Ventures. www.maltainc.com

• Blueshift, a San Francisco-based customer data platform, raised $30 million in Series C funding. Fort Ross Ventures led, and was joined by Avatar Growth Capital and insiders Softbank Ventures Asia, Storm Ventures, Conductive Ventures and Nexus Venture Partners. www.blueshift.com

• Katana Graph, an Austin, Texas-based graph processing company, raised $28.5 million in Series A funding. Intel Capital led, and was joined by WRVI Capital, Nepenthe Capital, Dell Technologies Capital, and Redline Capital. www.katanagraph.com

• EarnUp, a San Francisco-based platform for financially challenged homeowners, raised $25 million in Series B funding. Bain Capital Ventures led, and was joined by SignalFire, Blumberg Capital and Flourish Ventures. www.earnup.com

• Parkside, a San Francisco-based stock trading and clearing platform for brokerages and digital banks, raised $24 million in Series A funding from Mubadala Capital, Peak6, FinTech Collective and Enlight Growth Partners. www.parkside.app

• Hubilo, a San Francisco-based virtual and hybrid events platform, raised $23.5 million in Series A funding co-led by Lightspeed Venture Partners and Balderton Capital. www.hubilo.com

• Saltmine, a San Francisco-based provider of office real estate optimization software, raised $20 million in Series A funding. JLL Spark led, and was joined by Jungle Ventures and Xplorer Capital. http://axios.link/3nV0

• Wisetack, a San Francisco-based provider of buy-now-pay-later services for business transactions, raised $19 million. Greylock led, and was joined by Bain Capital Ventures. http://axios.link/96rm

• Everdrop, a Munich-based maker of dissolvable cleaning tablets, raised €18 million in Series A funding. Felix Capital led, and was joined by HV Capital and Vorwerk Ventures. http://axios.link/hKKO

• Contra, a professional network for freeelancers, raised $14.5 million. Unusual Ventures led, and was joined by Cowboy Ventures and Atelier Ventures. www.contra.com

• Zelros, a French insurance distribution startup, raised $11 million in Series A funding led by BGV. www.zelros.com

• Koffie Labs, a Brooklyn-based insure-tech startup focused on the trucking market, raised $4.5 million from Anthemis Group, Lerer Hippeau, 2048 Ventures, Plug and Play Ventures and C2 Ventures. http://axios.link/pZER

• FloorFound, an Austin, Texas-based retail returns management system, raised $4 million in seed funding. LiveOak Ventures Partners led, and was joined by Flybridge Capital, Next Coast Ventures, 8VC and Schematic Ventures. http://axios.link/2Hza

Private Equity Deals

• Belk, a Charlotte-based department store operator owned by Sycamore Partners, filed for prepackaged Chapter 11 bankruptcy, which would include $225 million in new funding from Sycamore. http://axios.link/qeec

• Buildertrend, an Omaha-based portfolio company of Bain Capital and HGGC, acquired CoConstruct, a Charlottesville, Va.-based provider of residential construction project management software. www.buildertrend.com

🚑 CVC Capital Partners agreed to buy a majority stake in MedRisk, a King of Prussia, Penn.-based provider of managed physical medicine services for the U.S. workers’ comp industry, from The Carlyle Group. www.medrisknet.com

• CVC Capital Partners is circling Synthomer (LSE: SYNT), a British chemicals maker valued at around £2 billion, per Bloomberg. http://axios.link/635Y

• DFL, Germany’s top soccer org, will invite private equity firms to bid for a minority ownership stake in its overseas media rights, per Bloomberg. http://axios.link/0pai

⚡ Exxon Mobil (NYSE: XOM) agreed to sell the non-operating interests in its UK and North Sea exploration and production assets to HitecVision for more than $1 billion. http://axios.link/ZDOL

• RevenueWell, a Bannockburn, Ill.-based portfolio company of Marlin Equity Partners, acquired a majority stake in PBHS, a Santa Rosa, Calif.-based provider of digital marketing solutions for dental offices and other health care organizations. www.revenuewell.com

🦶 Yellow Wood Partners agreed to buy the Scholl footcare products brand from Reckitt Benckiser Group (LSE: RB). http://axios.link/aWUQ

Public Offerings

Source: GIPHY

• The Duckhorn Portfolio, a Napa Valley luxury wine producer backed by TSG Consumer Partners, filed for an IPO that Renaissance Capital estimates could raise $300 million. It plans to list on the NYSE (NAPA), and reports $32 million of net income on $270 million in revenue for its fiscal year ending last July. http://axios.link/NpPb

SPAC Stuff

• Berkshire Grey, a Bedford, Mass.-based developer of pick-and-place robots for commerce, agreed to go public at a $2.7 billion valuation via reverse merger with Revolution Acceleration (Nasdaq: RAAC), a SPAC formed by VC firm Revolution and led by former presidential candidate John Delaney. Berkshire Grey had raised over $325 million from firms like SoftBank, Canaan Partners, NEA and Khosla Ventures. http://axios.link/PTyr

⚡ ReNew Power, India’s largest renewable energy firm, agreed to go public at an $8 billion valuation via reverse merger with RMG Acquisition Corp. (Nasdaq: RMGB), a SPAC led by former Carlyle Group energy investor Robert Mancini. The deal includes an $855 million PIPE, while existing ReNew backers include Goldman Sachs and CPPIB. http://axios.link/T9Fm

• BOA Acquisition, a real estate tech SPAC led by Scott Seligman, raised $200 million in an upsized IPO. http://axios.link/gf9f

• Fintech Acquisition Corp VI, a fintech SPAC chaired by Betsy Cohen, filed for a $220 million IPO. http://axios.link/17Q4

• James Graf filed for his third and fourth SPACs, seeking to raise $300 million and $150 million, respectively. An earlier Graf SPAC acquired Velodyne Lidar. http://axios.link/sOEw

• GX Acquisition II, a SPAC formed by Trimaran Capital Partners, filed for a $300 million IPO. http://axios.link/2Jfg

đźš‘ Healthwell Acquisition I, tech-enabled health care SPAC, filed for a $250 million IPO. http://axios.link/vty1

• Hudson Executive Investment III, a SPAC formed by Hudson Executive Capital, raised $525 million in an upsized IPO. http://axios.link/Vh2a

• Leo Holdings IV, a consumer SPAC formed by Lion Capital, filed for a $300 million IPO. http://axios.link/dSLc

• Soaring Eagle Acquisition (fka Spinning Eagle), the seventh SPAC from Jeff Sagansky and Harry Sloan, raised $1.5 billion in its IPO. If it uses only a portion of its proceeds for its initial acquisition, it can spin off the rest into a new SPAC that can then search out a different target. http://axios.link/6wgq

• True Wind Capital filed for its fourth and fifth tech SPACs, seeking to raise $250 million and $150 million, respectively. http://axios.link/hI9I

Liquidity Events

đźš‘ Beam Therapeutics (Nasdaq: BEAM) acquired GuideTx, a Tucker, Ga.-based developer of DNA barcoding technology that had raised around $14 million from firms like Biomatics Capital and GreatPoint Ventures. The deal is valued at up to $450 million, including $120 million upfront. http://axios.link/KCax

• TPG agreed to sell Gelson’s, an Encino, Calif.-based supermarket chain, to Pan Pacific International Holdings (Tokyo: 7532). http://axios.link/m01g

More M&A

🚑 Icon (Nasdaq: ICLR) of Ireland agreed to buy rival contract research org PRA Health Sciences (Nasdaq: PRAH), based in Raleigh, N.C., for around $12 billion in cash and stock, or $166 per PRA share (30% premium to yesterday’s closing price). http://axios.link/NYaw

• Kaseya, a Miami-based IT management and security company valued by VCs at $2 billion, acquired RocketCyber, a Dallas-based managed SOC platform. www.kaseya.com

• Kahoot, a listed Norwegian gamified e-learning company, acquired Whiteboard.fi, a Finnish online whiteboard tool for classrooms. www.kahoot.com

Fundraising

• The Blackstone Group is raising up to $13 billion for its ninth flagship private equity secondaries fund, plus $2 billion for GP-led secondaries, per Bloomberg. http://axios.link/AcvG

• Hellman & Friedman is targeting $20 billion for its tenth flagship buyout fund, which would include a $1 billion general partner commitment. http://axios.link/ZIAO

đźš‘ Oak HC/FT, a venture capital firm focused on health care and fintech, raised $1.4 billion for its latest flagship fund. www.oakhcft.com

• Peterson Private Equity, a Salt Laker City-based firm focused on small and mid-cap businesses, raised $225 million for its ninth fund. www.petersonpartners.com

It's Personnel

• Flourish Ventures promoted D.C.-based Sarah Morgenstern to and London-based Ameya Upadhyay to venture partner. www.flourishventures.com

• Seth Pearson joined York Capital Management as a managing director. He previously was a partner with Wellspring Capital. www.yorkcapital.com

Final Numbers

The latest: FDA staff endorsed Johnson & Johnson's one-shot vaccine as safe and effective, setting the stage for approval on Friday. Existing inventory, however, is limited.

Reminder: J&J's vaccine would not be approved for pediatric use, which also remains true for vaccines from Pfizer and Moderna. And while severe infections in kids remain rare, children's hospitals across the country keep seeing kids suffering from a serious illness following the coronavirus infection. Go deeper.

✔️ Thanks for reading Axios Pro Rata! Please ask your friends, colleagues and underwear models to sign up.