Jan 17, 2017

Axios Pro Rata

Welcome back to Pro Rata, where we're less than a day away from the big Axios launch. Be sure to keep sending me scoop (via email or our anonymous tipline at axios.com/tips), and asking friends to subscribe via this link. Let's get to it...

Top of the Morning

• It'll be a spectacle: We don't know exactly when Snap plans to go public, but here's how the timeline would play out if it pushed its pedal to the metal and there were no speed-bumps. The company is holding its analyst day early this week, which means it's possible that a public S-1 will be filed next week. Then it's a minimum 21-day waiting period until the roadshow can kick off. Given the expected size of Snap's offering ($4 billion-$5 billion) and broad investor interest, one would expect nearly two weeks of marketing. That would put the actual pricing during the first couple of days in March. It's also worth noting that Snap has scheduled an all-hands employee Q&A for this Thursday, although it's being described more as a 2017 kick-off than being specifically about the IPO plans.

• Lobbying is taxing: Airbnb today will tell the U.S. Conference of Mayors that it generated around $132 million in hotel, tourist and occupancy tax revenue for local municipalities in 2016, per a preview provided to Axios. That's up from $43 million in a similar report last year. More importantly, it will say that the 2016 figure could have jumped to $250 million in the top 50 U.S. cities, had all of them opted into the company's tax collections system.

This is the second straight year that Airbnb has presented at the Conference, as part of the home-sharing company's continuing effort to be seen as more friend than foe by city officials. Specifically, sources say that Airbnb feels it needs to solidify its legal standing in both San Francisco (where litigation has led to compromise) and New York (where litigation is quite active) before it can actively pursue an IPO.

It's also worth noting that Airbnb continues to staff up its federal policy team (perhaps to protect Section 230 of the Communications Decency Act). We're told that new hires include: Casey Aden-Wansbury (former chief of staff to Sen. Al Franken) as head of a newly-created federal affairs team; Meagan McCanna (former chief of staff to Rep. John Kline) as senior manager of federal affairs; and Elizabeth Jarvis-Shean (former Obama research director and corp comms at Tesla) as head of public policy communications.

• Trumpland: There was some media speculation over the weekend that CKE restaurants CEO Andy Puzder was having "second thoughts" about his Labor Sec nomination, although he seemed to brush them aside with a subsequent tweet. Worth noting that Puzder is among the many Trump nominees with ties to private equity, as CKE was taken private in 2010 by Apollo Global Management, which then sold it in 2013 to Roark Capital Group. I've reached out to several members of Roark to discuss Puzder since his nomination, but there have been no takers. Also no formal word yet on who would take over at CKE, if he were to be confirmed.

• More Trumpland: Politico's Tony Romm reported yesterday that Balaji Srinivasan, a board partner with Andreessen Horowitz and CEO of bitcoin hardware startup 21 Co., actually isn't up for FDA (which we only thought because it's what Trump press sec Sean Spicer told everyone). Instead, it seems his talks with PEOTUS are about taking on a newly-created sort of tech/innovation role (a pitch Peter Thiel has been making to many in Silicon Valley).

It is worth noting, however, that Srinivasan deleted basically his entire Twitter history after news of his meeting was first reported (likely because of past FDA and Trump criticism, or perhaps because he recently embraced a debunked conspiracy theory about that Russia dossier). I know there's a big movement in some tech circles right now about no longer speaking publicly about controversial issues and that I'm paid to do this sort of thing for a living, but if you're thinking about being a public official, is it too much to ask that you own up to your past public statements? Erasing them seems... well, cowardly.

• Retail update: Sycamore Partners has put in a stalking horse bid for the intellectual property of bankrupt retailer The Limited, which already has closed its hundreds of physical locations. If successful, expect Sycamore to follow a similar playbook to what it did with Coldwater Creek, which continues to maintain an active e-commerce operation.

The BFD: Tobacco mega-merger

• British American Tobacco (LSE: BATS) has agreed to acquire rival cigarette maker Reynolds American (NYSE: RAI) for approximately $49.4 billion in cash and stock (BAT already holds a 42% stake, which means the total Reynolds enterprise value becomes $86 billion). This is $2 billion more than an earlier takeover offer in October, and represents a 26% premium over where Reynolds was trading before that original bid.

• Why it's the BFD: Did you catch the part about $49 billion? More importantly, it means that BAT will become the world's largest tobacco company in terms of market cap and revenue.

• Bottom line: "The sheer scale of the enlarged BAT raises the pressure on the remaining players to bulk up too, and attention is likely to turn to Imperial Brands, who look more and more like a minnow swimming in a tank of big, hungry fish." -- Steve Clayton of Hargreaves Lansdown, to the BBC.

Venture Capital Deals

• LetGo, a New York-based mobile marketplace for buying and selling locally, has raised $175 million in Series B funding from Naspers, Accel, Insight Venture Partners, New Enterprise Associates. http://bit.ly/2j4pFWI

• Zoom Video Communications, a San Jose, Calif.-based provider of enterprise video and web communications solutions, has raised $100 million in Series D funding at a valuation north of $1 billion. Sequoia Capital led the round, and was joined by return backers Emergence Capital, AME Cloud Ventures and Qualcomm Ventures. The company had previously raised $45.5 million.

• Practo, an Indian platform for finding local doctors and healthcare information, has raised $55 million in Series D funding. Return backer Tencent led the round, and was joined by new investors Ru-Net, RSI Fund and Thrive Capital. Other existing shareholders that participated include Sequoia Capital, Matrix Partners, Capital G, Altimeter Capital and Sofina. http://tcrn.ch/2iwtHel

• HouseCanary, a San Francisco-based real estate analytics company, has raised $33 million in Series A funding from Hillspire, Alpha Edison, ECA Ventures and Raven Ventures. http://tcrn.ch/2jo47Vw

• Opaq Networks, a Herndon, Va.-based network security-as-a-service startup, has raised $21 million in Series A funding. Columbia Capital led the round, and was joined by Harmony Partners and Zero-G Inc. www.opaqnetworks.com

• OrderGroove, a New York-based, has raised $20 million in Series C funding. National Securities led the round, and was joined by return backers Lerer Hippeau Ventures, SWaN & Legend Ventures, Western Technology Investment, Silicon Valley Bank, FYRFLY Ventures and Scott Booth. http://tcrn.ch/2iCWQ2G

• Shiftgig, a Chicago-based mobile platform that connects businesses with hourly workers, has raised $20 million in Series C funding. DRW Venture Capital, FJ Labs, GGV Capital, KDWC Ventures and an affiliate of William Blair. http://trib.in/2iCvYjl

• Starship Technologies, an Estonian developer of autonomous robots for last-mile delivery, has raised $17.2 million in seed funding. Daimler AG led the round, and was joined by Shasta Ventures, Matrix Partners, ZX Ventures, Morpheus Ventures, Grishin Robotics and Playfair Capital. http://on.wsj.com/2iLiW3N

• Usound, an Australian maker of micro speakers, has raised €12 million in new equity funding led by eQventure. www.usound.com

• Zeotap, a German provider of telecom data onboarding for advertising targeting and measurement, has raised €12 million in Series B funding. New Science Ventures and HERE were joined by return backers Capnaic Ventures and Iris Capital. www.zeotap.com

• AMRA, a Swedish digital health startup that promises to "transform images from a 6-minute whole body MRI scan into precise fat and muscle measurements," has raised $9 million in new VC funding. Novo Seeds and Pfizer Venture Investments co-led the round, and were joined by Industrifonden. www.amra.se

• Spaces Inc., a Playa Vista, Calif.-based developer of VR and mixed reality "theme parks," has raised $6.5 million in new VC funding. China's Songcheng Performances Development Co. led the round, and was joined by return backer Comcast Ventures. http://on.wsj.com/2jgtzwE

• D.light, a San Francisco-based provider of solar lighting and power products households in remote locations like, has raised $5 million in fifth-round funding from Norfund. The company also secured $5.5 million in grant funding from Beyond the Grid and Shell Foundation. http://bit.ly/2jg5iGV

• Cytora, a London-based AI startup focused on "capturing hidden economic insights that exist in online data," has raised raised £2.4 million in Series A funding. Parkwalk led the round, and was joined by Cambridge Enterprise and iLexIR. http://bit.ly/2iDsBvL

• Bringhub, a Los Angeles-based contextual commerce platform, has raised an undisclosed amount of equity funding from Integrated Asset Management (Asia). http://tcrn.ch/2jUE3Ra

• Firepoint, a Denver-based automation platform for residential real estate agents, has raised an undisclosed amount of Series A funding led by Sopris Capital. www.firepoint.net

Private Equity Deals

• BC Partners has left the auction process for Polish retailer Zabka, which is being sold by Mid Europa Partners for upwards of €1.5 billion, according to Reuters. Remaining bidders include CVC Capital Partners, Hellman & Friedman, TPG Capital and Thai convenience store operator CP All. http://reut.rs/2iCrut1

• Bradford Equities Management has acquired United Brass Works, a Randleman, N.C.-based manufacturer of bronze, ductile iron and carbon steel valves, from Generational Equity. No financial terms were disclosed. www.ubw.com

• The Carlyle Group has agreed to become the largest shareholder in Global Credit Ratings, a pan-African credit ratings agency. No financial terms were disclosed. http://reut.rs/2juZueF

• The Jordan Co. has completed its previously-announced acquisition of Borchers, a German maker of additives for printing inks and colorants, from Vectra Co. No financial terms were disclosed. www.borchers.com

• InTandem Capital Partners has acquired Cano Health and Comfort Health, a pair of primary care clinics in South Florida. No financial terms were disclosed. www.intandemcapital.com

• L Catterton and GIC have agreed to acquire Leslie's, a Phoenix-based retailer of swimming pool supplies, from CVC Capital Partners. No financial terms were disclosed. www.lesliespool.com

• Palamon Capital Partners has acquired a majority stake in Happy Socks, a Sweden-based sock-maker valued at approximately $81 million. Palamon also plans to invest an additional $4.5 million in growth capital. http://bit.ly/2itzDV9

• PrideSports, a Brentwood, Tenn.-based golf accessories maker owned by Centre Partners, has merged with MacNeill Engineering, a Marlborough, Mass.-based maker of metal and plastic traction components for sports shoes. No financial terms were disclosed. www.pridesports.com

• Providence Equity Partners has acquired a 70% stake in Sziget, a Hungarian festivals operator. No financial terms were disclosed. http://reut.rs/2iDoH5U

• Ridgemont Equity Partners has agreed to acquire Worldwide Express, a Dallas-based truckload brokerage and licensed reseller of UPS light parcel services, from Quad-C Management (which will merge Worldwide Express with existing portfolio company Unishippers). No financial terms were disclosed. www.wwex.com

Public Offerings

• Foundation Building Materials, a Tustin, Calif.-based distributor of wallboard and suspended ceiling systems, has filed for a $100 million IPO. It plans to trade on the NYSE under ticker symbol FBM, with Deutsche Bank listed as left lead underwriter. The company is owned by Lone Star Funds. http://bit.ly/2ix374v

• Viventia Bio Inc., a Canadian developer of targeted protein therapeutics for cancer, has withdrawn its IPO registration. The move is a formality, after Eleven Biotherapeutics (Nasdaq: EBIO) acquired Viventia last September. http://bit.ly/2j4jFgK

Liquidity Events

• Intrawest Resorts Holdings (NYSE: SNOW), a North American ski resort operator backed by Fortress Investment Group, is working with banks on a possible sale, according to Reuters. The company has a current market cap of around $750 million. http://reut.rs/2jo4Icu

• Microsoft (Nasdaq: MSFT) has acquired Maluuba, a Montreal-based AI startup focused on natural language processing. No financial terms were disclosed. Maluuba had raised around $10 million in VC funding from firms like Emerillon Capital, Nautilus Venture Partners and Samsung Ventures. https://tgam.ca/2iA4gqu

• Resilience Capital has sold The PendaForm Co., a New Concord, Ohio-based maker of heavy-gauge thermoformer, to TriEnda Holdings LLC. No financial terms were disclosed. The combined company will be known as Kruger Brown Holdings. http://bit.ly/2i8EEkL

More M&A

• Fairfax India, a Canadian holding company, has agreed to acquire a 51% stake in Indian logistics company Saurashtra Freight. http://reut.rs/2j4j4eI

• Synthesio, a New York-based social media listening and analysis platform, has acquired Bunkr, a French SaaS company focused on business presentation creation (i.e., PowerPoint rival). No financial terms were disclosed. Synthesio has raised around $30 million in VC funding from firms like Entrepreneur Venture and Idinvest Partners (which also invested a small amount in Bunkr. http://tcrn.ch/2iIhyRO

• Vitanas, a German nursing home operator that could be valued at between €500 million and €550 million, has been put up for sale by its family owners, per Reuters. Acxit and Equinet are managing the process. http://reut.rs/2iIg61X


• DB Private Equity has acquired the remaining assets of Swiss private equity firm Zurmont Madison's only fund, a 2007-vintage vehicle whose LPs had been demanding liquidity. As part of the transaction, Zurmont Madison's team has joined a newly-formed private equity platform at Swiss asset manager Patrimonium. http://bit.ly/2jjLxy8

• Goldman Sachs and Kuwait's Wafra Investment Advisory Group each acquired a minority stake in the management company of ArcLight Capital Partners, a Boston-based private equity firm focused on the energy sector. No financial terms were disclosed. http://bit.ly/2jQkiKu

• L Catterton, a Connecticut-based private equity firm focused on the consumer sector, is targeting €500 million for a new European fund, according to Dow Jones. http://on.wsj.com/2jogcN6

• Rock Hill, a Houston-based private equity firm, has closed its third fund with $151 million in capital commitments. www.rockhillcap.com

• Veritable LP and Moelis Asset Management have jointly formed Archean Capital Partners, a platform that will seek commitments for SPVs that will invest in newly-launched private market funds. www.veritablelp.com

• Waterous Energy has raised C$400 million for its debut fund, per Bloomberg. The Canadian firm will focus on investments in the oil and gas sector, and is led by Adam Waterous (Scotiabank's former global energy head). http://bloom.bg/2jFZKof

• Waterland Private Equity, a Dutch mid-market private equity firm, is planning to open its first UK office. According to Financial News, the firm is "betting that Brexit will create investment opportunities." http://bit.ly/2jjCvkP

It's Personnel

• Initialized Capital has added three new partners: Eric Woersching (general partner), a former Clarium Capital trader who most recently was a portfolio manager for Thiel Macro; Vincent Chu (engineering partner), former director of engineering at Posterous (acquired by Twitter) and an early employee at Clara Lending; and Jen Wolf (operating partner, product and design), former chief product officer at Reserve. www.initialized.com

• Kai Bond has joined Comcast Ventures Catalyst Fund as a principal. He previously was general manager of the Samsung Accelerator and founder of PixieTV. www.cvcatalyst.com

• Altamont Capital Partners, a San Francisco-based private equity firm, has made the following promotions: Kristin Johnson and Alex Rolfe to managing director; Melissa Francis, Sam Gaynor and Kevin Mason to principal and Greg Corkran to VP.

• The Chernin Group has promoted Jason Bergsman to executive vice president.

• Institutional Venture Partners has promoted Tom Loverro to principal. He currently sits on the board of IVP portfolio company NerdWallet. www.ivp.com

• Prospect Partners, a Chicago-based private equity firm focused on the lower middle-markets, has promoted Brett Holcomb and Brad O'Dell to principal. www.prospect-partners.com

Final Numbers