May 27, 2020

Axios Pro Rata

By Dan Primack
Dan Primack

💻 You're invited: Today I'll moderate an Axios virtual live event on the state of small business, featuring interviews with chef Kwame Onwuachi, owner of Kith and Kin, and best-selling author Ann Patchett, co-owner of Parnassus Books. 12:30pm ET. Register here.

🎧 Pro Rata Podcast focuses on today's SpaceX launch, which could usher in a new era of U.S. space exploration and industry. Listen via Apple or via Axios.

Top of the Morning

Illustration: Sarah Grillo/Axios

Fiesta Shows isn't the sort of business I generally cover in this space. It's a third-generation family operator of tilt-a-whirls and carnival midways that has never sought or raised outside funding from venture capital or private equity. When it has financial issues, it talks to a local banker.

  • Fiesta normally pays the bills for hundreds of seasonal workers, and its events double as major fundraisers for churches, firefighters' associations, Boys & Girls Clubs, and other local nonprofits in New England.
  • Its pandemic travails aren't as widely consequential as those of Airbnb or airlines, but they still matter.

"We're at 100% hold," says E.J. Dean, whose grandfather founded what would become Fiesta Shows in 1935.

  • "The challenge we're seeing is the lack of guidance. In Massachusetts, for example, it looks like we're somewhere between Phase 3 and Phase 4 of reopening, but we don't really know when that will be — do we get to keep 20% of our 60 events? More? Less? There are no numbers to work from."

What's happening: The company has begun acquiring cleaning supplies and protective equipment for workers and customers, and discussing best practices with other show operators (some of which are being aped from theme parks).

  • "We're still trying to figure things out. For example, we maybe have three times as many basketballs for those games, or maybe a big tray of hundreds of darts so we can keep cleaning them. And different types of cleaning compounds, depending on what is and isn't a high-touch piece of equipment."
  • "A giant ferris wheel socially distances by design, so that at least works in our favor."

Fiesta Shows did get a PPP loan and believes it could probably survive into 2021 without a 2020 season, but it would be daunting at best.

As for employees, they're just waiting by their phones.

  • The exception is those who Fiesta hires via H-2B visas, as they may be unable to enter the country.
  • "The vast majority of our workers come back year after year. Right now, though, our staff is just the 10 people we keep year-round."

Confession: This one is personal. My father, uncle, and other family members worked for the Deans when they were younger. And E.J.'s father, Gene Dean, last fall “fixed” a water gun game at a county fair so that my daughter would win (shhhh … don’t tell her).

The bottom line: The carnival, a rite of New England summers, is closed until further notice, another victim of the coronavirus pandemic.

The BFD

Illustration: Sarah Grillo/Axios

Amazon (Nasdaq: AMZN) is in advanced talks to buy Zoox, a Foster City, Calif.-based robotaxi developer once valued north of $3 billion by venture capitalists, as first reported by the WSJ.

  • Why it's the BFD: Like with Facebook's recent deal for Giphy, it reflects how America's tech giants aren't letting federal antitrust investigations impede their acquisition activities.
  • Pricing: It won't be north of $3 billion.
  • Flashback: Why Zoox suddenly fired its CEO
  • The bottom line: "By all accounts, Zoox’s self-driving technology, developed on the complex streets of San Francisco, has been making strong progress. But in a crowded field, its plan to develop, build, and run a fleet of robotaxis is too ambitious, making it difficult to raise the necessary funding. Meanwhile, the pandemic has changed the game for automated vehicles. The smart play now is driverless delivery — right up Amazon’s alley." ⁠— Joann Muller, Axios

Pro Rata for Kids
Source: Giphy

Today's project is for your kid(s) to design a paper airplane contest. Make the airplanes and set up either distance markers or targets to hit. Compete against siblings or parents.

  • If they want to perfect their skills, here's a Nat Geo for Kids video on how to make the perfect paper airplane.
  • Per usual, please send in pics of what they create.
Venture Capital Deals

🚑 AbCellera, a Canadian developer of antibodies, raised US$105 million in Series B funding. OrbiMed led, and was joined by DCVC Bio, Founders Fund, the University of Minnesota, Presight Capital, and Viking Global Investors. Also investing is Eli Lilly, which is working with AbCellera on COVID-19 products. http://axios.link/tPfd

Aircall, developer of a cloud-based phone system, raised $65 million in Series C funding. DTCP led, and was joined by Adams Street and return backers eFounders, Draper Esprit, Balderton and NextWorld. http://axios.link/w2yj

DefinedCrowd, a Seattle-based startup that helps companies improve their AI services, raised $50.5 million in Series B funding. Semapa Next and Hermes GPE were joined by return backers Evolution Equity Partners, Kibo Ventures, Portugal Ventures, Bynd VC, EDP Ventures, IronFire Ventures, Amazon Alexa Fund, Sony Innovation Fund, and Mastercard. http://axios.link/BF0V

🚑 Monte Rosa Therapeutics, a developer of small molecule drugs to degrade disease-related proteins, raised $32.5 million in Series A funding from Versant Ventures and NEA. http://axios.link/Z6Yc

🎧 Luminary, a New York-based podcasting platform, raised around $32 million in Series D funding, per SEC filings. Existing backers include NEA. www.luminarypodcasts.com

🚑 Higi, a Chicago-based health kiosk operator, raised $30 million in Series B funding. Babylon Health led, and was joined by return backers 7Wire Ventures, Flare Capital Partners, Jumpstart Capital, Rush University Medical Center for Health and William Wrigley Jr. http://axios.link/gfPm

Kentik, a San Francisco-based network intelligence platform, raised $23.5 million. Vistara Capital Partners led, and was joined by August Capital, Third Point Ventures, DCVC, and Tahoma Ventures. www.kentik.com

Treasury Intelligence Solutions, a German cloud platform for managing corporate payments and cashflows, raised $20 million. Aquiline Technology Growth led, and was joined by return backer 83North. www.tis.biz

GoBear, a Singapore-based consumer financial services platform, raised $17 million from return backers Walvis Participaties and Aegon. http://axios.link/ZsWO

D-ID, an Israeli developer of de-identification technologies for digital images and videos, raised $13.5 million. AXA Ventures led, and was joined by Pitango VC, YC, AI Alliance, Maverick Ventures, Omron, Hyundai, and Mindset. http://axios.link/vLbw

Cinchy, a Toronto-based data collaboration startup, raised C$10 million in Series A funding. IVP led, and was joined by BDC, ScaleUp Ventures, Techstars, and Manulife Investment Management. http://axios.link/ddVP

Baton, a developer of post-sales implementation software, raised $10 million in Series A funding. Activant Capital led, and was joined by Global Founders Capital and Carsten Thoma. http://axios.link/eBzm

🚑 Cariloop, a Dallas-based caregivers’ app, raised $6 million in Series A funding from KCRise Fund, Revolution Rise of the Rest, and Patterson Thoma. http://axios.link/U2DW

Census, a startup focused on data distribution from cloud data warehouses, raised $4.3 million in seed funding. Andreessen Horowitz led, and was joined by SV Angel. http://axios.link/j37H

Spectrm, a Germany-based conversational marketing platform, raised $3 million in Series A funding from Runa Capital. http://axios.link/jTN9

Private Equity Deals

KKR committed $1 billion to form Global Technical Realty, an acquisition platform for European data centers. It will be led by Franek Sodzawiczny, founder of Zenium Data Centers and co-founder of Sentrum. http://axios.link/UKso

🚑 Mediterrania Capital Partners acquired MetaMed, an Egyptian diagnostic imaging company, from Gulf Capital for over €100 million. http://axios.link/Oald

• NordStar Capital agreed to buy Torstar Corp., parent company of the Toronto Star newspaper, for C$52 million. http://axios.link/cFEZ

• Quebec’s government agreed to provide $200 million in financial aid to Cirque du Soleil, a portfolio company of TPG Capital, Fosun Group, and Caisse de depot et placement du Quebec. http://axios.link/Qtvv

Public Offerings

🚑 Generation Bio, a Cambridge, Mass.-based gene therapy company initially focused on hemophilia and phenylketonuria, filed for a $125 million IPO. It plans to trade on the Nasdaq (GBIO) with JPMorgan as lead underwriter. The pre-revenue company 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

JDE Peet’s, the world’s second-largest packaged coffee maker, secured more than its desired €2.25 billion of subscriptions for an Amsterdam IPO, per Bloomberg. http://axios.link/Oe8o

Liquidity Events

Keysight Technologies (NYSE: KEYS) agreed to buy Eggplant Software, a London-based provider of automated software testing tools, from The Carlyle Group, per PE Hub. http://axios.link/0efF

SoftBank Vision Fund is seeking to sell its minority stake in OSIsoft, a San Leandro, Calif.-based operational intelligence software provider, for upwards of $1.5 billion, per Bloomberg. http://axios.link/aFJG

More M&A

Barry Callebaut, a listed Swiss chocolatier, agreed to buy Australian chocolate, coatings, and fillings maker GKC Foods. http://axios.link/9HZ1

The French government said it’s seeking a buyer to rescue clothing company Camaieu. http://axios.link/r34E

LEG Immobilien and TAG Immobilien, both listed German property groups, ended merger talks after failing to agree on valuation, per Reuters. http://axios.link/4wdK

Ola, the Indian ride-hail giant, agreed to buy Amsterdam-based e-scooter company Etergo, which had raised around $20 million from undisclosed investors. http://axios.link/tysy

🚑 Sanofi (Paris: SAN) disclosed plans to sell its 20.6% stake in U.S. biotech Regeneron (Nasdaq: REGN), which could net upwards of $13 billion. http://axios.link/trAA

Texas Capital Bancshares (Nasdaq: TCBI) and Independent Bank Group (Nasdaq: IBTX) called off their all-stock “merger of equals.” In related news, Texas Capital president and CEO Keith Cargill resigned. http://axios.link/sg2B

Tuesday Morning (Nasdaq: TUES), a discount home goods retailer, filed for Chapter 11 bankruptcy protection. http://axios.link/UsCe

Fundraising

Ares Management agreed to pay the SEC a $1 million civil fine related to compliance failures. http://axios.link/YFwI

CVC Capital Partners held advanced discussions to launch a private equity secondaries practice, but tabled the idea once the pandemic hit, per Secondaries Investor. http://axios.link/2h5x

It's Personnel

Jonathan Costello, who recently stepped down as head of secondaries advisory with PJT’s Park Hill Group, is launching a secondaries business backed by Stone Point Capital. http://axios.link/Qq6A

Cat Lee quietly stepped down as a partner with VC firm Maveron, which she joined in early 2019 after six years with Pinterest.

Final Numbers
Data: U.S. Small Business Administration; Chart: Naema Ahmed/Axios
Dan Primack

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