Dec 8, 2017

Axios Pro Rata

By Dan Primack
Dan Primack

You're invited on Monday morning to an Axios event at the Newseum in Washington D.C. The topic will be energy policies and priorities under President Trump. More info here. Okay, here we go...

Top of the Morning

There were two major developments yesterday, when it comes to sexual harassment claims against well-known investors:

  • Laura Fitton, a Boston entrepreneur known to many early Twitter users as the co-author of Twitter for Dummies, has become the sixth woman to accuse venture capitalist Shervin Pishevar of sexual misconduct, and the first to do so on the record. She tells Axios that Pishevar forcibly kissed her and engaged in other inappropriate behavior after a charity event six years ago. Pishevar "unequivocally and categorically" denies the allegations. You can read our full report here.
  • Sam Isaly last night stepped down as managing partner of OrbiMed, the $14 billion investment firm he founded in 1998, just days after a STAT report that Isaly had allegedly harassed and demeaned female employees. OrbiMed — which runs hedge, private equity and VC funds — said that Isaly was leaving "pursuant to years-long succession planning discussions," and declined to comment further. Isaly had denied the harassment charges to STAT, also saying at the time that "there is no planned date" for his retirement.

• Related: Venture firm First Round Capital recently surveyed over 850 startup founders, including on the issue of sexual harassment. Some findings:

  • 78% of female founders vs. 48% of male founders said they've been harassed or know someone who's been sexually harassed.
  • 70% of female founders vs. 35% of male founders said sexual harassment in the industry is still underreported.
  • Men were 4 times more likely than women to say that the media has overblown the issue (22% vs. 5%).

• One political takeaway from the First Round survey:

"26% of founders said someone's perceived or known political affiliation would influence whether or not they'd offer them a job. 30% said an investor's politics would affect whether they'd take the money. And 37% said they'd be swayed in choosing a board member based on the person's political views."

• November jobs report: Non-farm payrolls +228k in December (vs. +200k estimates). Unemployment rate unchanged at 4.1%. Annualized hourly wages +2.5% (vs. +2.7% estimates).

• March 19, 2018. That's when a court will begin deciding whether or not AT&T is allowed to buy Time Warner. But Judge Richard Leon told the parties not to expect a final decision before the April 22 merger termination date.

• Not my fault: Retail-focused buyout firm Sycamore Partners is in the midst of raising at least $4 billion for its third fund, but peHUB reports that the fund terms prevent limited partners to remove the GP without cause until 10 years after the final close. That sounds a bit worrisome at first blush -- particularly given that such clauses are very rarely triggered — but is mitigated by Sycamore still allowing LPs to terminate the entire fund without cause. In other words, Sycamore's partners don't want someone else running their money.

• Breaking: Just got a press release about Tencent Music Entertainment Group and Spotify acquiring equity stakes in one another, with TMEG parent company Tencent also taking an equity stake in Spotify. More on this soon on the site.

• Have a great weekend...

The BFD

Elliott Management has amassed an undisclosed stake in $24 billion biotech Alexion Pharmaceuticals (Nasdaq: ALXN), according to The NY Times: "If Alexion's management does not take action — from offering more aggressive financial performance guidance to considering strategic alternatives such as selling itself — Elliott could end up taking actions like beginning a proxy fight."

  • Why it's the BFD: Because this comes less than 24 hours after Fortune published a profile of Ellliott Management, including some very disturbing claims about how the activist investor has tried to gather dirt on target company executives. For example, it reports that executives' children have been pulled into the fray (Elliott would not reply on-the-record, but seems to have denied on background).
  • Bottom line: "The pressure from Elliott to juice profits comes almost a year after Alexion admitted executives pressured employees to sell its flagship blood disorder drug, Soliris, to meet financial projections. Present day, meet history. It's also worth noting Paul Singer has aggressively targeted other healthcare companies this year (e..g, Athenahealth and Mednax)." — Bob Herman, Axios
Venture Capital Deals

• Modsy, a San Francisco-based provider of 3D imaging for home design, has raised $23 million in Series B funding. Advance Venture Partners led, and was joined by NBCUniversal, Comcast Ventures and return backers Birchmere Ventures, AME Cloud Ventures, Norwest Venture Partners, BBG Ventures and GV. http://axios.link/ufkd

• Mswipe, an Indian provider of point-of-sale payment solutions, has raised $10 million in new Series D funding (round total now $40m). B Capital led the new tranche, and was joined by DSG Consumer Partners. http://axios.link/C4tj

• Cedar, a New York-based provider of healthcare patient billing software, has raised $13 million in Series A funding from Founders Fund, Thrive Capital, Martin Ventures and SV Angel. http://axios.link/a9ei

• Graduway, a London-based provider of alumni software, has raised $12.7 million in new funding. Susquehanna Growth Equity led, and was joined by return backers SaaS Capital, Massa Innovations and Gigi Levy. www.graduway.com

• ForceManager, a Barcelona-based AI conversational assistant app for field sales teams, has raised $12 million in Series B funding. AXA Strategic Ventures led, and was joined by return backers Nauta Capital, Sabadell, SIE and Histemi. http://axios.link/v1lP

• Burrow, a New York-based modular sofa startup, has raised $4.3 million in seed funding. Red & Blue Ventures led, and was joined by Interplay Ventures, Justin Kan, Michael Seibel and Ken Pilot. http://axios.link/EoSB

• Clora, a Boston-based on-demand labor marketplace for biotech and pharma, has raised $3.3 million in seed funding. Spark Capital led, and was joined by Social Capital, Ludlow Ventures, Notation Capital, iSeed Ventures, v1 VC and KohFounders. http://axios.link/ORex

• Maxwell Financial Labs, a Denver-based provider of B2B digital mortgage cloud software, has raised $3 million in new funding. Anthemis Group led, and was joined by Route66 Ventures and Assurant. www.himaxwell.com

• PullRequest, a code review as-a-service startup, has raised $2.3 million in seed funding. Gradient Ventures led, and was joined by The Slack Fund, Fika Ventures, Defy Ventures, Lynett Capital, FundersClub and Liquid2 Ventures. http://axios.link/AaBg

• Avora, a London-based data intelligence startup, has raised £1.5 million in funding led by Crane Venture Partners. www.avora.io

• PhoneWagon, a New York-based provider of call-tracking software, has raised $1.2 million in seed funding. Birchmere Ventures led, and was joined by Active Capital. http://axios.link/T1AF

Private Equity Deals

⛽ LOGOS Resources II, a portfolio company of ArcLight Capital Partners, has agreed to acquire WPX Energy's (NYSE: WPX) legacy gas properties and undeveloped Mancos acreage located in the San Juan Basin, which includes around 900 producing wells. www.logosresourcesllc.com

• Riskonnect, a Kennesaw, Ga.-based portfolio company of Thoma Bravo, has agreed to acquire Aruvio, a Santa Clara, Calif.-based provider of governance, risk and compliance solutions. www.riskonnect.com

⛽ Valorem Energy, an Oklahoma City-based portfolio company of Kayne Anderson, has acquired LINN Energy's Williston Basin interests for $285 million. www.valorem-energy.com

Public Offerings

🚑 Denali Therapeutics, a South San Francisco-based biotech focused on neurodegenerative diseases, raised $250 million in its IPO (making it the year's largest biotech IPO). The pre-revenue company priced 13.9 million shares at $18 (middle of range), for a fully diluted market value of around $1.7 billion. It will trade on the Nasdaq under ticker DNLI, while Goldman Sachs served as lead manager. Denali had raised around $350 million in VC funding, from the Alaska Permanent Fund (28.1% pre-IPO stake), Arch Venture Partners (15.3%), Flagship Ventures (12.3%), F-Prime Capital Partners (6.8%) and Fidelity Biosciences (5.8%). www.denalitherapeutics.com

🚑 Odonate Therapeutics, a San Diego-based developer of chemotherapy drugs, raised $150 million in its IPO. The company priced 6.3 million shares at $24 (low end of range), and will trade on the Nasdaq under ticker ODT. Goldman Sachs and Jefferies served as lead managers. Shareholders in the pre-revenue company include Janus Capital (4.3% pre-IPO stake), Arcus Ventures (1.5%) and Samsara BioCapital (1.3%). www.ordonate.com

🍕 PT Sriboga Raturaya, Indonesia's largest franchisee of Pizza Hut and Marugame Udon restaurants, is prepping for a $150 million domestic IPO, per DealStreetAsia. http://axios.link/ibkL

Liquidity Events

🚑 Gilead Sciences (Nasdaq: GILD) has agreed to acquire Cell Design Labs, a San Francisco-based cancer immunotherapy company, for $567 million. Cell Design Labs had raised around $35 million in VC funding from Kleiner Perkins, Osage University Partners, Mission Bay Capital and Kite Pharma (which was since acquired by Gilead). http://axios.link/4UZB

• Platinum Equity has sold Keen Transport, an Oslo-based provider of heavy-haul logistics and transportation services for the construction, mining and agriculture equipment markets, to Wallenius Wilhelmsen Logistics. http://axios.link/QfL2

• Uber has agreed to sell a majority stake in its Singapore-based car rental business to the country's largest taxi company, ComfortDelGro, for SG$295 million. The combined venture will be valued at SG$642 million (US$474 million). http://axios.link/YJBH

  • All hail breaks loose: Didi Chuxing reportedly plans to expand to Mexico next year as its first location outside of China, which would put it in direct competition with Uber.
More M&A

• Honeywell (NYSE: HON) has agreed to acquire a 25% stake in Flux IT, a Chinese provider of warehouse management and supply chain software. http://axios.link/8IBv

• United Grinding Group, a Swiss machine tool-maker owned by Germany's Körber, is expecting takeover bids by Christmas, per Reuters. It also is running a dual-track process, having hired banks for a Zurich IPO. http://axios.link/SNr3

Fundraising

• Apollo Global Management is working on a long-term fund that would combine both credit and equity, according to comments Leon Black made this week at a Goldman Sachs conference. http://axios.link/jhgP

• Northleaf Capital Partners of Toronto has closed its first global private credit fund with more than US$670 million in capital commitments. www.northleafcapital.com

It's Personnel

• Ron Kundich, a co-founder of Square 1 Bank who led its Bay Area tech banking group, has joined Trinity Capital Investment as a managing director, per his LinkedIn profile. www.trincapinvestment.com

Dan Primack