Sep 6, 2018

Axios Pro Rata

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Top of the Morning

Source: Giphy

Yesterday's congressional hearings with Sheryl Sandberg and Jack Dorsey were a bore, save for some impromptu auctioneering, but Silicon Valley was unexpectedly shook by Attorney General Jeff Sessions announcing that he will soon meet with state AGs "to discuss a growing concern that these companies may be hurting competition and intentionally stifling the free exchange of ideas on their platforms."

  • Why it matters: Antitrust. We've been talking about this possibility for more than a year, but have generally felt that there wouldn't be DoJ action unless Congress updated antiquated rules from the big railroad days (or there was some other sea change to how monopolies are evaluated). So this is likely a fishing expedition from Sessions, seeking legal workarounds. That said, fishing expeditions often, you know, find fish.
  • Go deeper: Sessions casts a shadow

In market: The Blackstone Group yesterday launched formal fundraising for its new global buyout fund, called Blackstone Capital Partners VIII, according to multiple sources. The target is $20 billion, with a first close slated for next March. Its current flagship fund closed on $18 billion in late 2015.

  • Also: Fourth Element Capital, a new healthcare tech VC firm based in Minnesota, is said to be raising $175 million for its debut fund. Its co-founders are Kathleen Tune (ex-Thomas McNerney) and John Deedrick (co-founder of Accutitive Medical Ventures).

• Breaking: Still no word on the CBS investigation into Les Moonves, but CNBC's David Faber reports this morning that the network is deep in settlement talks with Moonves that would result in his departure.

  • This comes as CBS and Shari Redstone are reported to be in talks to settle their differences before next month's scheduled trial, with the current discussions including a pledge by Redstone to at least table her push for a merger with Viacom.

• Lawyered up: Elon Musk has hired a pair of high-profile attorneys, as the SEC continues to probe his abandoned takeover interest in Tesla, according to Fox Business Network's Charlie Gasparino. They are: Roel Campos, a former SEC commissioner, and Steven Farina, a partner at Williams & Connolly.

  • Tesla shares closed yesterday at $280, its lowest point since May and juuuuussssst a bit below the $420 "funding secured" mark. But it is up nearly 2% in premarket trading, likely because Musk retweeted a positive sales report.

• Crypto crash: All the big cryptocurrencies saw prices plummet after Business Insider reported that Goldman Sachs has "retreated" from plans to launch a trading desk for Bitcoin and other cryptocurrencies.

  • Bitcoin fell around 8.5%, while ETH took a 9.5% hit (before recovering slightly) and Litecoin was off 7.8%.

🎧 Listen up: Yesterday's podcast focused on why the U.S. still has a major chip manufacturing base, and how to keep it here. (Listen) (Subscribe). And be sure to check out today's NFL kick-off episode, which posts around noon EST, featuring a chat with Steve Young.


Source: Giphy

Caffeine, a Redwood City, Calif.-based social broadcast startup, raised more than $100 million in new funding. 21st Century Fox led, and was joined by return backers Andreessen Horowitz and Greylock.

  • Why it's the BFD: Because while Caffeine is late to the game, its partnership with a big entertainment studio like 21st Century Fox — plus a separate deal with Live Nation — could cause both Twitch and YouTube to take a long, hard look over their shoulders.
  • Bottom line: "Caffeine, which was created by two former Apple execs and launched earlier this year, aims to nudge its way into a space already dominated by Twitch and YouTube by touting what they believe to be a simpler interface and a creator-first mentality. The former checks out, with the platform’s built-in tools to make live-streaming gameplay easier than having to download third-party software. The latter just seems like the Pollyanna-ish viewpoint every social platform likes to espouse." — KC Ifeanyi, Fast Company
Venture Capital Deals

MissFresh, a Chinese ecommerce platform for fresh produce, raised $450 million. Goldman Sachs and Tencent co-led, and were joined by Poly Capital Holdings, Jeneration Capital Management and Davis Selected Advisers.

AnchorFree, a Redwood City, Calif.-based mobile privacy company, raised $295 million. WndrCo led, and was joined by Accel, 8VC, SignalFire and Green Bay Ventures.

OneNorth, a British fintech startup primarily focused on business and property loans, raised $100 million at a $2.3 billion post-money valuation, from backers like EDBI, Coltrane Asset Management, Clermont Group and NIBC.

🚑 4DMT, an Emeryville, Calif.-based gene therapy company, raised $90 million in Series B funding. Viking Global Investors led, and was joined by ArrowMark Partners, Janus Henderson Investors, Biotechnology Value Fund, MiraeAsset Financial Group, Pappas Capital & Chiesi Ventures, Pfizer Ventures, Perceptive Advisors, Ridgeback Capital Investments, CureDuchenne Ventures and Berkeley Catalyst Fund.

MasterClass, a San Francisco-based online education company, raised $80 million in Series D funding. IVP led, and was joined by fellow return backers NEA, Javelin Ventures, and Advancit Capital. New investors include Atomico and Evolution Media.

Monese, a European provider of mobile-only bank accounts, raised $60 million in Series B funding. Kinnevik led, and was joined by PayPal, Augmentum Fintech, Avios Group and return backer Investec.

iQiyi Sports, the sports unit of Chinese online video platform iQiyi (Nasdaq: IQ), raised $51 million in new Series A funding from China Sports Capital (an affiliate of Sequoia China) and Yao Capital.

🚢 ShipBob, a Chicago-based shipping fulfillment startup for ecommerce companies raised $40 million in Series C funding. Menlo Ventures led, and was joined by return backers Bain Capital Ventures, Hyde Park Venture Partners, Hyde Park Angels and YC., a Chinese startup focused on data transmission and access security, raised $30 million in first-round funding from Bertelsmann Asia Investments and IDG Capital.

Uberall, a Berlin-based location marketing startup, raised $25 million in new Series B funding (round total now $50m) from return backers HPE Growth Capital, Project A and United Internet. Uberall also acquired local rival Navads.

Fave, a Groupon-like service in Southeast Asia, raised $20 million in Series B funding from return backers Sequoia India, SIG Asia Investment and Ventura Capital.

🚑 Notable Health, a San Mateo, Calif.-based startup that automates and digitizes physician-patient interactions, raised $13.5 million in Series A funding. F-Prime Capital Partners and Oak HC/FT co-led, and were joined by Greylock and Maverick Ventures.

Miso, a South Korean home-cleaning startup, raised $8 million in Series A funding. AddVenture led, and was joined by Social Capital and return backers YC, FundersClub and Strong Ventures.

Palmetto, a Charleston, S.C.-based provider of sales software for solar energy companies, raised $6 million. Greycroft led, and was joined by Lerer Hippeau, Box Group and David Stern.

Alaia Capital, a Darrien, Conn.-based provider of defined outcome investment solutions, raised $5.5 million from Centana Growth Partners.

DyeMansion, a Munich-based provider of post processing and coloring of 3D-printed laser sinter parts, raised $5 million in Series A funding led by Unternehmertum VC Partners.

Tappp, a New York-based pre-paid platform for live sports content, raised $5 million in Series A funding. Advantage Sports Tech Fund led, and was joined by Accomplice, Elysian Park, Go4it, Courtside VC and

Uppercase, a startup that helps e-commerce companies expand into physical retail, raised $3.5 million. Lerer Hippeau led, and was joined by CRV and SV Angel.

Vapor IO, an Austin, Texas-based provider of edge computing software and hardware, raised an undisclosed amount of Series C funding led by Berkshire Partners, with return backer Crown Castle also participating.

Private Equity Deals

American Tire Distributors , a Huntersville, N.C.-based replacement tire company owned by TPG and Ares Management, said that it’s considering a bankruptcy filing, in order to restructure its $2.4 billion debt load.

Core Industrial Partners acquired Midwest Composite Technologies, a Hartland, Wis.-based maker of prototype and low-volume production components.

CVC Capital Partners offered £275 million to buy English rugby team Premiership Rugby.

Dalian Wanda Group is seeking a convertible debt deal to cut its stake in movie theater operator AMC Entertainment, and had held talks with both Apollo Global Management and Silver Lake, per Reuters.

Francisco Partners invested in ByBox, a UK-based developer of smart locker technology and field service solutions, at a £221 million valuation.

GameStop (NYSE: GME), a Grapevine, Texas-based video game retailer, hired Perella Weinberg Partners to find a buyer, per DealReporter. Suitors reportedly include Sycamore Partners and Apollo Global Management.

H.I.G. Capital acquired Recochem, a Montreal-based maker of aftermarket transportation and household fluids, from Swander Pace.

Insight Venture Partners agreed to acquire Episerver, a digital content management company, from Accel-KKR at an enterprise value of $1.16 billion.

Solace Capital has acquired a majority stake in Fabcon, a Savage, Minn.-based maker of precast and pre-stressed concrete wall panels, from Platinum Equity.

Wynnchurch Capital acquired select assets of Uponor, in order to form a new Canadian company (IPS) that will make large diameter, high density polyethylene pipes.

Public Offerings

Duiba Group, a Chinese provider of user management SaaS, filed for a Hong Kong IPO. Backers include Orchid Asia and TPG Capital.

🚑 Elanco, a Greenfield, Ind.-based animal vaccines business being spun out of Eli Lilly (NYSE: LLY), set IPO terms to 62.9 million shares at $20-$23. It would have an initial market cap of $7.66 billion, were it to price in the middle, and plans to trade on the NYSE (ELAN) with Goldman Sachs as lead underwriter. The company reports $10 million of net income on $1.5 billion in revenue for the first half of 2018.

Elastic, a provider of subscription-based data search software, filed for a $100 million IPO. It plans to trade on the NYSE (ESTC) with Goldman Sachs as lead underwriter. The company reports a $19 million net loss on $57 million in revenue for H1 2018, and raised over $100 million in VC funding from firms like Benchmark (17.8% pre-IPO stake), Hexavest (10.5%), NEA (10.2%) and Future Fund (8.2%).

Farfetch, a London-based e-commerce marketplace for independent boutiques, set IPO terms to 37.5 million shares at $15-$17. It would have a fully-diluted market value of around $4.9 billion, were it to price in the middle, and plans to trade on the NYSE (FTCH) with Goldman Sachs as lead underwriter. The company reports a $68 million net loss on $268 million in revenue for the first half of 2018, and has raised over $700 million in VC funding from firms like Advent International, Index Ventures and DST.

🚑 Guardant Health, a Redwood City, Calif.-based liquid biopsy company, filed for a $100 million IPO. It plans to trade on the Nasdaq (GH), with JPMorgan as lead underwriter. The company reports a $35 million net loss on $36 million in revenue for H1 2018, and raised around $540 million in VC funding from firms like SoftBank Vision Fund (39.3% pre-IPO stake), Sequoia Capital (11%), Khosla Ventures (10.1%) and Lightspeed Venture Partners (5.4%).

Qutoutiao, a Chinese mobile content aggregator, set IPO terms to 16 million shares at $7-$9. It would have a fully-diluted market value of around $2.4 billion, were it to price in the middle, and plans to trade on the Nasdaq (QTT) with Citigroup as lead underwriter. The company reports a $78 million net loss on $108 million in revenue for the first half of 2018, while shareholders include Tencent.

Upwork, a Mountain View, Calif.-based online marketplace for freelancers, filed for a $100 million IPO. It plans to trade on the Nasdaq (UPWK) with Citigroup as lead underwriter. The company reports a $7 million net loss on $122 million in revenue for H1 2018, and lists shareholders like Benchmark (15% pre-IPO stake), Sigma Partners (14.2%), Globespan Capital Partners (12.9%), T. Rowe price (10.6%), FirstMark Capita,l (5.7%) and SG Growth Partners (5.5%).

Yunji Weidian, a Chinese e-commerce platform, hired Morgan Stanley, Credit Suisse and JPMorgan to manage a U.S. IPO that’s expected to come in early 2019, per Reuters. The company is hoping for a valuation of between $7 billion and $10 billion.

Liquidity Events

Court Square Capital Partners is again seeking a buyer for Rocket Software, a Waltham, Mass.-based IT management software provider that could fetch upwards of $2 billion, per Bloomberg.

SS&C Technologies (Nasdaq: SSNC) agreed to buy data room company Intralinks from Siris Capital Group for $1.5 billion.

More M&A

Anbang of China picked JPMorgan to find a buyer for its Dutch insurance business (Vivat), which could fetch upwards of $2 billion, per Reuters.

Coupa Software (Nasdaq: COUP) has acquired the tech assets of DCR Workforce, a Boca Raton, Fla.-based provider of contingent workforce management and services.

Delta Air Lines (NYSE: DAL) is seeking buyers for a stake in its Monroe Energy refining unit, per Reuters.

JM Holding of Germany is seeking to sell around half of the business that owns plastics companies Renolit Group and RKW Group, per Bloomberg.

🚑 Novartis (Swiss: NOVN) agreed to sell its U.S. dermatology and generic pill assets to India’s Aurobindo Pharma for upwards of $1 billion.

Schroders (LSE: SDR) recently expressed interest in buying CarVal Investors, a hedge fund owne d by Cargill, but was rebuffed, per Reuters.


Center Rock Capital Partners, a private equity firm focused on industrial businesses in North America, raised $580 million for its debut fund.

KKR closed its third global infrastructure fund with $7.7 billion.

Pomona Capital closed its ninth private equity secondaries fund with $1.8 billion.

It's Personnel

Battery Ventures promoted Paul Morrissey (London) to principal, Dan Nguyen-Huu (SF) and Dallin Bills (Boston) to vice presidents and Viraj Parmar (Boston) to associate.

Angela Tran Kingyens joined Version One Ventures as its second general partner. She previously co-founded YC-backed startup Insight Data Science.

Joe Mattinaas joined Canada’s Penfund as a partner and head of originations. He previously led credit origination for Apollo Global Management.

Hilton Romanski is stepping down as chief strategy officer and SVP for Cisco Systems, in order to join Siris Capital Group as a partner and senior managing director.

Yann de Vries stepped down as a partner with European VC firm Atomico in order to become VP of corp dev at flying taxi startup Lilium.

Final Numbers
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Data: Council of Economic Advisers; Note: "CEA" is after tax and adjusts for demographics of workforce, work benefits and a different measure of inflation. "CPI adj." is only adjusted by CPI-U; Chart: Andrew Witherspoon/Axios

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