Sep 1, 2020

Axios Pro Rata

By Dan Primack
Dan Primack

🎧 Axios Re:Cap digs into the business of police reform, with someone who's given implicit bias trainings to thousands of officers. Listen at Apple Podcasts or at

Top of the Morning

Illustration: Sarah Grillo/Axios

Restaurant delivery company DoorDash is expected to be part of the post-Labor Day IPO rush, having filed confidential registration documents back in February. But it's also facing an existential threat to its business model, and needs to quickly come up with some better rhetorical defenses.

Driving the news: My interview with DoorDash co-founder and CEO Tony Xu was shown last night on "Axios on HBO," with a heavy focus on the employee vs. independent contractor debate.

  • At best, he held his cards close to his chest. At worst, he whistled past the graveyard.

Xu argued that flexibility — in terms of when "Dashers" work, which jobs they accept, etc. — is incompatible with being an employee. But he never quite settled on why that is, except that it's the dichotomy that companies like DoorDash have created. When pressed, he falls back on "what Dashers want," without lending much gravity to dissent from politicians, courts, or certain Dashers.

  • Watch this video clip of Xu explaining why his independent contractors can't negotiate their rates, and his thoughts on unionization.
  • See Xu talking about Joe Biden and Kamala Harris' opposition to gig economy company efforts to roll back a California law that would categorize their workers as employees.
  • He also said the average Dasher now makes $22 per hour, which includes when the app is on but a delivery is not in progress, but didn't know the cost of typical Dasher overhead (fuel, vehicle depreciation, etc.).

DoorDash was not party to the lawsuit that nearly led Lyft and Uber to suspend ride-hail operations in California, but is facing a similar complaint brought by the San Francisco district attorney. In an unaired portion of the interview, Xu declined to say what DoorDash would do were a preliminary injunction granted in that case, except to say the company is "working on all plans."

  • Xu also said he hasn't read a proposed "third way" to categorize gig economy workers that was recently laid out by Uber CEO Dara Khosrowshahi in a NY Times op-ed, but said DoorDash favors the idea of giving Dashers benefits like portable health plans.

The bottom line: DoorDash in the pandemic evolved from a casual luxury to an essential service. For IPO investors to buy in, though, Xu will need to give more compelling answers on how his company will manage its most glaring risk factor.

Source: Giphy

TPG is seeking a buyer for Astound, a U.S. cable conglomerate that includes RCN, Grande Communications, and Wave Broadband, per Reuters. A deal could fetch more than $8 billion.

  • Why it's the BFD: It reflects how many cable operators are thriving in spite of cord-cutters, as work-from-home and streaming video consumers demand faster broadband.
  • The bottom line: TPG is seeking a very strong return here, having paid $2.25 billion to buy RCN and Grande in 2016 and then $2.7 billion for Wave in 2017.
Venture Capital Deals

Bambuser, a Stockholm-based live video shopping app, raised $45 million from Consensus Asset Management, Handelsbanken, Harmony Partners, Lancelot Asset Management, Tenth Avenue Holdings, and TIN Fonder.

Sacros, a Salt Lake City-based robotic exoskeleton startup, raised $40 million in Series C funding led by Rotor Capital.

Fashionphile, a Carlsbad, Calif.-based online resale marketplace for luxury handbags and jewelry, raised $38.5 million in Series B funding led by NewSpring Growth.

🚑 Hazel Health, a San Francisco-based provider of telemedicine services to public school students, raised $33.5 million from Owl Ventures, Bain Capital Ventures, Uprising, UCSF Foundation Investment Co. and Centene Corp.

🚑 NeuroPace, a Mountain View, Calif.-based developer of a neurostimulator for the treatment of focal onset refractory epilepsy, raised $33 million in new equity funding. Accelmed Partners led, and was joined by Revelation Partners, Soleus Capital and return backers KCK Group and OrbiMed.

🚑 Pyramid Biosciences, a Waltham, Mass.-based developer of precision therapies focused on the modulation of cell surface receptors, raised $28 million from Adage Capital Management, Averill Master Fund, and J.W. Childs Associates.

🚑 Lumen Bioscience, a Seattle-based developer of biologic drugs for enteric diseases, raised $16 million in Series B funding. WestRiver Management and return backer Bioeconomy Capital co-led, and were joined by Avista Development and Columbia Pacific.

Cosmose, a New York-based data analytics platform for physical retail customer behavior, raised $15 million in Series A funding. Tiga Investments led, and was joined by return backers OTB Ventures and TDJ Pitango., a Palo Alto-based automated platform for hiring software engineers, raised $14 million in seed funding led by Foundation Capital.

Apna, an Indian reskilling and job-finding app, raised $8 million in Series A funding. Lightspeed India and Sequoia Capital India co-led, and were joined by Greenoaks Capital and Rocketship VC.

Klassroom, a French parent-teacher communication platform, raised $3 million in seed funding led by Bpifrance.

Capchase, a Boston-based startup that helps SaaS companies get cash from accounts receivable, raised $4.6 million in seed funding from Caffeinated Capital, Bling Capital, SciFi VC, BoxGroup, and OneVC.

Dorian, a game-creation platform for fiction writers, raised $3.25 million in seed funding led by March Capital Partners.

Private Equity Deals

Circle Graphics, a Longmont, Colo.-based portfolio company of H.I.G. Capital, acquired Bay Photo, a provider of photographic wall décor, albums and specialty prints.

🚑 EQT entered exclusive talks to buy European nursing home operator Colisée Group from IK Investment Partners.

GIC and Brookfield Infrastructure Partners paid $3.4 billion to buy an Indian telecom tower company from Reliance Industries.

Roark Capital invested in US Sports Camps, a San Rafael, Calif.-based operator of over 1,200 youth sports camps across the U.S.

Service Champions, a Brea, Calif.-based portfolio company of CenterOak Partners, acquired ASI Hastings, a San Diego-based provider of residential HVAC and plumbing services.

Public Offerings

• ChinData Group, a Chinese data center operator owned by Bain Capital, is prepping a New York IPO that could raise upwards of $400 million, per Reuters.

• Geely (HK: 0175), a Chinese automaker, is prepping a share sale on the Shanghai STAR Market.

Hygo Energy Transition, a provider of downstream LNG solutions in Brazil, filed for a $100 million IPO. It plans to list on the Nasdaq (HYGO) with Morgan Stanley as lead underwriter, and reports a $52 million net loss on $23 million in revenue for the first half of 2020. Backers include Stonepeak Infrastructure Fund.

• Laird Superfood, a plant-based beverages maker co-founded by surfers Laird Hamilton and Paul Hodge, filed for a $40 million IPO. The Sisters, Ore.-based company plans to list on the NYSE American (LSF) with Canaccord Genuity and Craig Hallum Capital Group as underwriters, and reports a $5 million net loss on $11 million in revenue for the first half of 2020. Backers include Danone Manifesto Ventures (13.4% pre-IPO stake).

SPAC Stuff

• ACON S2 Acquisition, a sustainable business-focused SPAC formed by ACON Investments, filed for a $250 million IPO.

• Oaktree Acquisition II, the second SPAC formed by Oaktree Capital, filed for a $225 million IPO.

Liquidity Events

🚑 Bayer agreed to buy Care/of, a New York-based online retailer of vitamins and health supplements, for $225 million. Care/of had raised around $87 million in VC funding from backers like Goodwater Capital, Tusk Ventures, RRE Ventures, and Goldman Sachs.

🦞 Golden Gate Capital sold its control stake in restaurant chain Red Lobster to existing Red Lobster shareholder Thai Union Group, and and group of restauranteurs and company execs.

More M&A

• Gogo (Nasdaq: GOGO) agreed to sell its commercial aviation unit to Intelsat for $400 million in cash.

• Gong, a San Francisco-based revenue intelligence platform that recently raised $200 million in Series D funding, bought Vayo, an Israeli sales insights platform.

• RealPage (Nasdaq: RP) acquired Stratis IoT, a Philadelphia-based provider of real estate IoT solutions like energy management and access tools.

Schlumberger (NYSE: SLB) agreed to sell its North American fracking unit to Liberty Oilfield Services (NYSE: LBTR) for a 37% stake in the combined company, which will have an initial market cap of $1.2 billion.


🦉 Owl Ventures raised $415 million for its fourth early stage fund and $170 million for its first opportunity fund.

• Patria, a Brazilian investment firm 40% owned by The Blackstone Group, raised $2 billion for a Latin America-focused infrastructure fund.

It's Personnel

• Benjamin Bold (ex-Morgan Stanley) and Daniel Gold (JPMorgan) rejoined TA Associates as Boston-based vice presidents, while Harry Mahadevan (Credit Suisse) rejoined as a London-based VP.

Final Numbers
Source: Refinitiv Deals Intelligence. Data through August 27, 2020.
Dan Primack

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