Feb 2, 2021

Axios Pro Rata

🎧 Axios Re:Cap digs into the post-pandemic future of work with author and labor journalist Sarah Jaffe. Listen via Apple, Spotify or Axios.

🍹 Breaking: Uber agreed to buy alcohol delivery company Drizly for $1.1 billion.

Top of the Morning

Illustration: Sarah Grillo/Axios

Robinhood continues to come under pressure from power users and politicians, but its investors are doubling, tripling and maybe even quadrupling down.

Driving the news: The stock trading app yesterday announced $2.4 billion in new funding from existing backers, on top of the $1 billion it secured last Friday.

From the outside, Robinhood appeared to be on fire.

  • Days of sloppy messaging and stubborn reticence to explain that its West Coast executives were awakened at around 3am PT on Thursday morning with word that the company would need to put up around a $3 billion deposit to open full trading — an amount the company either couldn't afford, or that its compliance team wouldn't let it risk.

From the inside: Robinhood investors believe the company pulled off a miracle.

  • Things were indeed frantic, particularly in the early hours of negotiation with clearinghouse number-crunchers.
  • But investors argue: The app kept working under unprecedented usage. No data was lost. Trading did open, albeit without purchase ability on the handful of nostalgia stocks. And Robinhood quickly called down its credit lines and raised what it believes is enough money to avoid this sort of problem in the future — first tapping VC firms closest to the company (for the initial $1b) and then expanding the circle to all existing investors.
  • The $3.4 billion was structured as a convertible note, although terms haven’t been disclosed. Reuters also reports that Robinhood already is seeking to secure a new $1 billion credit line.
  • Robinhood has been at or near the top of the app store for days, likely replacing any departed users many times over.

“If you’d asked me a week ago if it was possible to do all of this stuff in 72 hours, I’d have told you no way,” one investor tells Axios. “It’s easy to shit on [CEO Vlad Tenev] for how he said things in a TV interview, but behind the scenes he and everyone else really delivered.”

  • Another investor adds: “I really believe everyone was trying to do the right thing under unprecedented circumstances… The question [for investors] was if they’d earned the right to be around the next day, and obviously we felt the answer was yes.”

Investors don't appear worried about legal or regulatory changes that would significantly harm Robinhood's business model. Not only via conversations with Axios, but as evidenced by the $3.4 billion in new disbursements.

  • Tenev is expected to testify at a House Financial Services Committee hearing on Feb. 18.
  • "Axios Re:Cap" today will speak with the ranking Republican on that committee, Rep. Patrick McHenry (R-N.C.). Subscribe.

The bottom line: From the perspective of its investors, this past week may go down as Robinhood's defining moment instead of as its deleterious one.

The BFD

Illustration: Rebecca Zisser/Axios

Surge Private Equity acquired RAC, a Germantown, Md.-based online retailer of supplies for backyard chicken owners.

  • Why it's the BFD: Because, in addition to selling items like coops and waterers, RAC literally rents out chickens and small hatcheries. It's the most Brooklyn thing that a Maryland company could possibly do.
  • The bottom line: "Amateur chicken-keeping has been growing in popularity in recent years as people seek environmental sustainability in the food they eat. The pandemic is accelerating those trends, some breeders and poultry groups say, prompting more people to make the leap into poultry parenthood." — Terence Chea, AP
Venture Capital Deals

Databricks, a San Francisco-based unified data analytics platform, raised $1 billion in Series G funding at a $28 billion post-money valuation. Franklin Templeton led, and was joined by Fidelity, Whale Rock, AWS, CapitalG, Microsoft and Salesforce Ventures. http://axios.link/mUUA

UiPath, a New York-based developer of robotic process automation software that recently filed confidential IPO papers, raised $750 million in Series F funding at a $35 billion post-money valuation. Alkeon Capital and Coatue co-led, and were joined by Altimeter Capital, Dragoneer, IVP, Sequoia, Tiger Global and T. Rowe Price. http://axios.link/43AP

Divvy Homes, a San Francisco-based developer of “flexible homeownership programs,” raised $110 million in Series C funding. Tiger Global led, and was joined by GGV Capital, Moore Specialty Credit and JAWS Ventures. http://axios.link/UhEA

🚀 Omnispace, a Tysons, Va.-based developer of satellite-based 5G connectivity solutions, raised $50 million. Fortress Investment Group led, and was joined by Columbia Capital, Greenspring Associates, TDF Ventures and Telcom Ventures. http://axios.link/WaRs

Valon (f.k.a. Peach Street), a New York-based residential mortgage servicer, raised $50 million in Series A funding. Andreessen Horowitz led, and was joined by return backers Jefferies, an affiliate of Fortress Investment Group and 166 2nd LLC. www.valon.com

• Weights and Biases, a San Francisco-based experiment tracking platform for machine learning, raised $45 million in Series B funding. Insight Partners led, and was joined by insiders Coatue, Trinity Ventures and Bloomberg Beta. www.wandb.ai

🚑 Alma, membership-based network for mental health care providers, raised $28 million in Series B funding. Insight Partners led, and was joined by Optum Ventures and insiders Tusk Venture Partners, Primary Venture Partners, Sound Ventures, BoxGroup and Rainfall Ventures. www.helloalma.com

🚑 Folx Health, a Boston-based provider of clinical care products and services for the LGBTQ community, raised $25 million in Series A funding led by Bessemer Venture Partners. http://axios.link/6FLt

🚑 Sword Health, a New York-based maker of physical therapy hardware, raised $25 million. Transformation Capital led, and was joined by return backers Khosla Ventures, Founders Fund, Green Innovations, Vesalius Biocapital and Faber. http://axios.link/4Fsp

Quantifind, a Menlo Park-based provider of financial crime investigation automation software, raised $22 million from S&P Global, In-Q-Tel and Snowflake Ventures. http://axios.link/7mkc

Honeycomb, a San Francisco-based provider of observability for distributed systems, raised $20 million in Series B funding. E.ventures led, and was joined by Industry Ventures and insiders Storm Ventures, Scale Ventures Partners, NextWorld Capital, and Merian Ventures. www.honeycomb.io

Oyster, a Wilmington, Del.-based HR platform for distributed workforces, raised $20 million in Series A funding. Emergence Capital led, and was joined by Slack and Connect Ventures. http://axios.link/5unU

🚑 Cellino, a Cambridge, Mass.-based cell therapies developer, raised $16 million in Series A funding. The Engine and Khosla Ventures co-led, and were joined by Humboldt Fund and 8VC. http://axios.link/g0K3 http://axios.link/8sAB

Brightloom, a Seattle-based customer growth platform for restaurants, raised $15 million from backers like Valor Siren Ventures and Tao Capital Partners. www.brightloom.com

Soda, a Brussels-based data monitoring platform, raised €11.5 million in Series A funding. Singular led, and was joined by Point Nine Capital, Hummingbird Ventures and DCF. http://axios.link/LrGR

Limitless, a London-based gig customer experience platform, raised $10 million in Series B funding. Redline Capital led, and was joined by Genesys, AlbionVC and Unilever Ventures. http://axios.link/Jdtp

🚑 Telemedico, a Polish B2B telehealth startup, raised €5.5 million in Series A funding from Flashpoint VC, Uniqa Ventures, PKO VC, Black Pearls VC and Adamed. http://axios.link/WJbQ

Private Equity Deals

🚑 Abry Partners bought CloudWave, a Marlborough, Mass.-based provider of cloud services and IT infrastructure to hospitals, from WestView Capital Partners. www.gocloudwave.com

The Blackstone Group agreed to buy Interior Logic Group, an Irvine, Calif.-based provider of interior designing products and services, from Littlejohn & Co. and Platinum Equity. www.interiorlogicgroup.com

DuPont (NYSE: DD) agreed to sell its cleantech unit for $510 million to an investor group that includes BroadPeak Global, Asia Green Fund, Tensile Capital Management and Saudi Arabia's Dussur. http://axios.link/cZg1

J.C. Flowers agreed to acquire a majority stake in iLendingDirect, an Englewood, Colo.-based auto refinance marketing company. www.ilendingdirect.com

🍺 Marston's (LSE: MAR), a British pub operator, rebuffed a £666 million takeover approach from Platinum Equity. http://axios.link/2q8j

Motive Partners and Clearlake Capital Group agreed to buy an 80% stake in InvestCloud, a Los Angeles-based provider of wealth and investment management software. Co-investors include Accenture, Citi Ventures and Fiserv, while sellers include FTV Capital. www.investcloud.com

Priority Power Management, a Texas-based portfolio company of Ara Partners, acquired Satori Energy Solutions, a Chicago-based energy services firm. www.prioritypower.net

Wynnchurch Capital acquired The Wheel Group, an Ontario, Calif.-based designer and distributor of aftermarket wheels, tires and related accessories. Sellers include Seidler Equity Partners. www.thewheelgroup.com

Public Offerings

🐝 Bumble, an Austin, Texas-based dating app, set IPO terms to 34.5 million shares at $28–$30. It would have a fully diluted market value of $5.8 billion, were it to price in the middle, compared to its $3 billion valuation when The Blackstone Group acquired a majority stake in late 2019. http://axios.link/0t3F

🚑 Bolt Biotherapeutics, a Redwood City, Calif.-based immuno-oncology company, set IPO terms to 8.8 million shares at $16–$18. It would have a fully diluted value of $596 million, were it to price in the middle, plans to list on the Nasdaq (BOLT) and raised $158 million from Novo Holdings (17.9% pre-IPO stake), Vivo Capital (15%), Sofinnova Ventures (10%), Citadel (7.5%), RA Capital (7.5%), Pivotal BioVenture (7.1%) and Rock Springs Capital (6.8%). http://axios.link/MZZ6

🚑 Lucira Health, an Emeryville, Calif.-based developer of infectious disease test kits (including for COVID-19), set IPO terms to 7.8 million shares at $15–$17. The pre-revenue company would have a fully-diluted value of $644 million, were it to price in the middle, plans to list on the Nasdaq (LHDX) and raised over $100 million from firms like EPIQ Capital (33.4% pre-IPO stake), Eclipse Ventures (21.5%), Seraph Group (8.1%), DCVC and YC. http://axios.link/sD73

🚑 Pharvaris, a Dutch developer of alternatives to injected therapies for treating hereditary angioedema, set IPO terms to 7 million shares at $17–$19. It would have an fully diluted value of $576 million, were it to price in the middle, plans to list on the Nasdaq (PHVC) and raised around $185 million from firms like LSVP, Foresite Capital, Bain Capital Life Sciences, VenBio Partners, Viking Global, General Atlantic and Venrock. http://axios.link/XOiB

Viant Technology, an Irvine, Calif.-based provider of programmatic ad software, set IPO terms to 7.5 million shares at $17–$19. It would have a fully-diluted market value of $1.3 billion, were it to price in the middle, plans to list on the Nasdaq (DSP) and reports $8 million of net income on $109 million in revenue for the first nine months of 2020. http://axios.link/fqOd

SPAC Stuff

🚀 Astra, an Alameda, Calif.-based orbital launch company, agreed to be acquired at around a $2.1 billion valuation by Holicity (Nasdaq: HOL), a TMT-focused SPAC led by Craig McCaw. Astra had raised around $100 million from firms like Artis Ventures, Evolution VC Partners, Canaan Partners, Airbus, Acme Capital and Correlation Ventures.

🚑 ABG Acquisition I, a healthcare SPAC formed by Ally Bridge Group, filed for a $120 million IPO. http://axios.link/CkR2

Advanced Merger Partners, a SPAC formed by Houlihan Lokey and Saddle Point Management, filed for a $250 million IPO. http://axios.link/8RtX

Ares Acquisition Corp., a SPAC formed by Ares Management, raised $870 million in an upsized IPO. http://axios.link/W1G6

🚑 CM Life Sciences II, the second life sciences SPAC formed by Casdin Capital and Corvex Management, filed for a $200 million IPO. http://axios.link/NdZo

Jaws Mustang Acquisition Corp, Barry Sternlicht's second SPAC, raised $900 million in an upsized IPO. http://axios.link/lTWP

Moringa Acquisition, an Israeli tech SPAC led by former Stratasys CEO Ilan Levin, filed for a $100 million IPO. http://axios.link/8v10

New Vista Acquisition, a SPAC led by former Boeing CEO Dennis Muilenburg, filed for a $200 million IPO. http://axios.link/jdwc

Noble Rock Acquisition, software and tech-enabled services-focused SPAC, raised $210 million in an upsized IPO. http://axios.link/CWP3

Thimble Point Acquisition, a tech-focused SPAC led by Elon Boms, raised $240 million in its IPO. http://axios.link/Qe90

Liquidity Events

Cairn Capital, the credit unit of Italy's Mediobanca, agreed to buy Bybrook Capital, a Blackstone Group-backed distressed debt investor with around $2.5 billion in AUM. http://axios.link/skF1

More M&A

Atos (Paris: ATO), a French IT consulting group, ended talks about a possible $10 billion acquisition of U.S. rival DXC Technology (NYSE: DXC). http://axios.link/ZKFs

Fundraising

Blue Sea Capital, a West Palm Beach, Fla.-based lower middle market private equity firm, raised $430 million for its second fund. www.blueseacapital.com

Kindred Ventures, a San Francisco-based seed investor, raised $100 million for its second fund. http://axios.link/E306

Kohlberg & Co. raised $3.4 billion for its ninth buyout fund. www.kohlberg.com

Providence Strategic Growth raised €1.25 billion for its first Europe-focused fund. http://axios.link/yfYl

It's Personnel

Sriram Krishnan, a former product exec at Twitter and Facebook, joined Andreessen Horowitz as a general partner. www.a16z.com

David Lee joined Samsung as a Los Angeles-based executive VP and head of its Samsung Next investment group. He previously co-founded Refactor Capital and, before that, was managing partner of SV Angel. www.samsungnext.com

David Morley, who spent three decades with law firm Allen & Overy, joined Caisse de dépôt et placement du Québec as a managing director and head of Europe. www.cdpq.com

Bill Murnighan joined Chicago-based Loch Alainn Capital as director of private markets. He previously was with CUNA Mutual Group.

Jake Stuiver joined M2O Private Fund Advisors as a vice president. He previously was with Evercore’s private capital advisory group. www.m2ollc.com

Final Numbers: U.S. IPO performance
Source: Renaissance Capital. Data through 2/2/21.

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