Jan 10, 2019

Axios Pro Rata

By Dan Primack
Dan Primack

Big thanks for Kia for filling in yesterday, after I learned an important lesson about eating "fresh food" from a highway gas station. Okay, here we go...

Top of the Morning

Famed hedge fund manager Jeff Vinik is back. Again.

  • Vinik rose to prominence by succeeding Peter Lynch as head of Fidelity's Magellen Fund, before leaving in 1996 to launch his own shop. He closed that fund in 2000 (returning $4.2 billion to investors), reopened it in 2005 and then closed it again in 2013 (returning $6b). He also bought the NHL's Tampa Bay Lightning in 2010.
  • Now he's opening a new platform, with WSJ citing a $3 billion target.
  • He tells me that there's no particular reason he's relaunching now instead of a year or two ago ("Why not now?"), except that he still loves the markets and it's been nearly 10 years since he bought the Lightning ("looking for another change").

More from my conversation with Vinik:

"More money has gone from active to passive, some of the capital has flattened out or declined and there's been less coverage on Wall Street of small and mid-cap stocks. All of that, I think, sets up an opportunity for good old-fashioned stock pickers like me. I think what's happened to managers over the past 5 to 10 years, and they have woefully under-performed, is that there's been too much of a herd instinct and too much focus on things like the FAANG stocks...
Not enough roll up your sleeves, call a ton of companies, analyze industries, put together earnings models, look at valuations and make determinations based on that. Stock-picking has become a lost art."

🛴 Scooter wars: Kia yesterday scooped that Fidelity is leading a new $300 million investment in Bird. The pre-money remains at $2 billion, as this is an extension of the Sequoia-led round from last summer.

  • This also means I was wrong earlier this week, in reporting that Bird's new infusion would be insider-led. Apologies for passing on bad intel.

Supersonic: Boom Technology, a Colorado-based developer of supersonic jets, last week raised $100 million in new funding. It also said that it plans test flights for late 2019.

  • We first wrote about Boom in early 2017, the plan was for those first test flights to occur in 2018.
  • Eli Dourado, Boom's head of policy and comms, tells me: "We were just too ambitious and frankly a bit naive. We’ve solved a lot of hard problems over the last year, including designing a high-performance variable geometry inlet and nailing down low-speed handling qualities. We are now receiving parts and building the airplane, and we look forward to flying at the end of this year."
  • Or, as Boom investor Sam Altman puts it: "Building airplanes is hard."

🎧 Pro Rata Podcast: Kim Hart filled in for me yesterday, with an interesting episode on how the polar vortex has split, and what that means for the rest of our winter. Listen here.

The BFD

Photo by Sergen Sezgin/Anadolu Agency/Getty Images

Pear Therapeutics, a Boston-based developer of prescription software to help treat opioid addiction, raised $64 million in Series C funding.

  • Why it's the BFD: Because opioid addictions and overdoses are surging, including among children and teenagers, with novel solutions desperately needed.
  • Investors: Temasek led, and was joined by Blue Water Life Sciences Fund, Trustbridge Partners and return backers Novartis, 5AM Ventures, Arboretum Ventures and Jazz Venture Partners.
  • Go deeper: Opioids are the border's most dangerous threat.
  • Bottom line: "The prescription digital therapeutic for opioid use disorder consists of a 12-week cognitive behavioral therapy program intended to be used alongside outpatient treatment. It includes buprenorphine, a standard medication for opioid addiction, while helping to reinforce positive behaviors through interactive therapy lessons. But Pear is keen to develop, test and validate its apps as something akin to a stand-alone intervention, or software-as-a-drug—by using single-variable studies and the same traditional, gold-standard endpoint measures used in pharma-based trials." -- Conor Hale, FierceBiotech
Venture Capital Deals

N26, a Berlin-based mobile bank, raised $300 million in Series D funding at a $2.7 billion valuation. Insight Venture Partners led, and was joined by GIC and some existing backers. http://axios.link/iFqL

Vena Solutions, an Toronto-based provider of financial planning and analysis software, raised C$115 million. JMI Equity led, and was joined by return backer Centana Growth Partners. http://axios.link/eKmB

🚑 Black Diamond Therapeutics, a Swiss cancer precision medicine startup, raised $85 million in Series B funding. NEA and RA Capital Management co-led, and were joined by NexTech Invest, The Invus Group and Perceptive Advisors and return backer Versant Ventures. http://axios.link/rjsM

Talentsoft, a Paris-based provider of learning and human capital management software, raised $50 million. Francisco Partners led, and was joined by return backers Bpifrance and Goldman Sachs. http://axios.link/ayUV

Emeritus, a U.S.-Indian startup that partners with physical universities to offer digital courses, raised $40 million in Series C funding. Sequoia India led, and was joined by return backer Bertelsmann India. http://axios.link/y9Zb

Private Equity Deals

Gallant Capital Partners invested in Aero Turbine, a Stockton, Calif.-based aerospace maintenance, repair and overhaul service provider. www.aeroturbine.aero

Kriya Capital acquired Receivable Solutions Specialist, a Natchez, Miss.-based provider of revenue cycle management services to healthcare organizations. www.recspecinc.com

Platte River Equity acquire a control stake in Sherrill, a Greensboro, N.C.-based distributor of arborist tools and equipment. www.sherrilltree.com

Warren Equity Partners bought StormTrap, a Romeoville, Ill.-based provider of stormwater solutions for residential, municipal, commercial and industrial markets. http://axios.link/S4Jz

Public Offerings

No IPO news this morning, as the government shutdown continues to keep new issuers in a holding pattern.

Liquidity Events

Adobe (Nasdaq: ADBE) completed its purchase of marketing automation software company Marketo from Vista Equity Partners for $4.75 billion.

Amazon (Nasdaq: AMZN) acquired CloudEndure, an Israeli provider of cloud migration and disaster recovery services that had raised around $18 million from firms like Infosys, Magma Venture Partners, Dell Technologies Capital, VMware, Mitsui & Co. and EG Capital Advisors. http://axios.link/JOsB

Meniga, a London-based digital banking platform that has raised $37 million, acquired Swedish rewards platform Wrapp, which had raised around $30 million from Qualcomm Ventures, Nordea, NFT Ventures, Amex, Atomico, SEB Private Equity and Creandum. http://axios.link/gl0H

Quadrant Private Equity is prepping a sale process for Australian gym chain Fitness and Lifestyle Group, which could garner A$2 billion, per the Australian Financial Review. http://axios.link/QPLs

More M&A

Amazon (Nasdaq: AMZN) invested in Balyo (Paris: BALYO), a French maker of technology for self-driving forklifts, via a deal that could ultimately give it up to a 29% stake. http://axios.link/7o2y

BDO USA acquired the assets of Global Trade Strategies, an Atlanta-based customs and international trade regulation consultant. www.bdo.com

Fundraising

Elevation Equity Partners has been formed by the former Korea investment team of New York’s Rohatyn Group, per PE International. It comes less than three years after Rohatyn formed the Seoul-based group. http://axios.link/6xL7

Penfund, a Canadian mid-market private equity firm, raised C$1.15 billion for its sixth fund. www.penfund.com

Triton Partners raised €5 billion for its fifth European buyout fund. http://axios.link/OmCf

It's Personnel

Robert Berstein joined Piper Jaffray as a Boston-based managing director of investment banking, focused on Internet and digital media. He previously was with DCS Advisory (fka Signal Hill). www.pjc.com

• Gordon Brown, the former UK Prime Minister, joined Partners Group to advise on "impact investments." http://axios.link/qeQS

Cinven promoted New York-based Phil Cathcart to principal. www.cinven.com

David Luboff joined KKR as head of Asia-Pacific infrastructure investing. He previously led Macquarie Group’s Asia infrastructure funds. www.kkr.com

Wes Mendenhall joined Fireman Capital Partners as a Seattle-based principal focused on biz dev and IR. He previously was with BAML. www.firemancapital.com

Ted O’Byrne joined Carlyle Aviation Partners as a managing director and co-head of aviation. He previously was chief investment officer at AerCap. www.carlyle.aero

Pritzker Group VC promoted Sonia Nagar to partner, Ty Findley to VP and Eric Duboe to senior associate. www.pritzkergroup.com

John Robertshaw, co-founder of iCapital and former Credit Suisse vice chairman, joined Star Mountain Capital as a senior advisor. www.starmountaincapital.com

Patrick Salyer joined VC firm Mayfield as a partner. He is former CEO of Gigya, a Mayfield portfolio company bought in 2017 for $350 million by SAP.

Final Numbers
Expand chart
Data: FactSet; Chart: Chris Canipe/Axios

Eddie Lampert has upped his bid to save Sears, from $4.4 billion to $5 billion.

  • It's now up to Sears to decide if the new offer is financially viable. If so, then Sears would compete in a January 14 bankruptcy court auction (the outcome of which remains subject to judicial approval).
  • Lampert's is currently the only bid that would keep Sears operational, thus saving around 50,000 jobs.
Dan Primack