Feb 23, 2018

Axios Pro Rata

Kia Kokalitcheva

Happy Friday -- it’s almost the weekend! If you’ve missed him, Dan will be back on Monday from his warm ski trip in Vermont.

He’ll also be in NYC on Monday for our event — RSVP here for interviews with NBA star Draymond Green, BBG Ventures’ Susan Lyne, JPMorgan’s Jennifer Piepszak, and Equinox CEO Harvey Spevak.

Top of the Morning

Illustration: Rebecca Zisser / Axios

In January 2015, Chinese President Xi Jinping made a lofty declaration: China would trade $500 billion in goods with Latin America over the next five years, and provide $250 billion in direct investment. Not long ago those targets would have seemed ludicrous, but based on the current trends they're not out of the question, reports Axios's Erica Pandey.

  • The big picture: The Monroe Doctrine is running up against the Xi Reality in Latin America.
    • China has now surpassed the U.S. as the leading trading partner of several South American countries, including Brazil, and stepped up investments in the region dramatically at a time when U.S. engagement is on the wane.
    • China has dramatically increased its footprint as an international investor over the last three decades: from $450 million in 1986, to $2 billion in 1996, to $24 billion in 2006 to $217 billion in 2016, per the World Bank.
    • Compare that to the U.S.'s $311 billion in 2016 — China is catching up.
    • Despite its status as a developing nation, China is well on its way to becoming the world's largest investor, Brookings China expert David Dollar tells Axios.
  • Go deeper: You should really read the full story here.

More China: The Chinese government said it has seized control of Anbang Insurance Group, the troubled Chinese company that owns the Waldorf Astoria hotel, and has charged the company’s former chairman with economic crimes.

Crypto scoop: Andreessen Horowitz has recently invested in Anchor Labs, a stealthy startup planning to provide digital asset custody, according to multiple sources. I couldn’t get an exact number, but it raised funding after acquisition talks with Coinbase late last year didn't turn into a deal. In November, Coinbase unveiled its own plans to provide custody services to institutional investors.

  • Digital asset custody is becoming the next big topic on the investment side of digital tokens because it’s a critical requirement for institutional investors.

Telegram skeptics: In response to yesterday’s newsletter item on Telegram, several of you — along with other sources I’ve spoken with — expressed skepticism over the token network tech it plans to build. Given the reports that investors are already (illegally) flipping their allocations, it does question how much even they believe in it...

Legal chat: Yesterday I briefly spoke with Marco Santori, a Cooley lawyer who co-authored the SAFT, and is joining digital token wallet startup Blockchain. Key quotes:

  • “Step 1 is to realize that there is no risk free way of doing this,” he said when I asked him what should a company planning to sell tokens should do.
  • “We may have guidance from the courts before we have guidance from the regulators,” he said on the topic of clearer rules for digital tokens in the near future. There are already several ongoing private lawsuits over token sales.

Blue and Gold: SkyDeck, a startup accelerator program at U.C. Berkeley has just closed a $24 million fund, originally intended to be $10 million, it tells me. Its investors include Sequoia, Alibaba, and some alumni through various investment vehicles. (Disclaimer: I graduated from Cal.)

  • One interesting aspect of the fund is that half of the carry will be donated back to SkyDeck to invest back into the school.
  • Meanwhile, alumnus Jeremy Fiance is quietly raising up to $50 million for a second House Fund, according to an SEC filing from December (the first was $6 million). While not officially affiliated with the school, the House Fund invests at the earliest stages into startups founded by students, alumni, and faculty. Fiance declined to comment, but he appears to still be fundraising.

Thanks for hanging around this week, it was a pleasure to write for you all!

The BFD

Photo: Robyn Beck / AFP / Getty Images

Vision Esports LP, a Beverly Hills, Calif.-based eSports conglomerate, has raised $38 million in funding led by Evolution Media, with participation from Durant Company, Shamrock Holdings, the St. Louis Cardinals baseball team, and Odell Beckham Jr.

  • Why it's the BFD: Esports is a category that is showing no signs of slowing down, and is still largely underestimated.
  • Bottom line: "'I saw this with the Sharks—the relationship between the leagues, the teams, the broadcast rights, the sponsorships and advertisers, and the media rights licensing,' [Stratton Sclavos, a former San Jose Sharks co-owner], said. 'We believe esports is pro sports, and is going to do that exact same thing. So we want to touch all those economic drivers.'” — Bloomberg
Venture Capital Deals

SpinLaunch, a Sunnyvale, Calif.-based startup building a space catapult, is raising $30 million in Series A funding, according to TechCrunch. http://axios.link/SmQv

Work Well Win, a Greenwich, Conn.-based high-end coworking chain, has raised $22 million in seed funding from undisclosed investors. http://axios.link/34XT

Split, a Redwood City, Calif.-based maker of tools for testing software features, has raised $17 million in Series B funding led by Lightspeed Venture Partners, with participation from Accel Partners and Harmony Partners. http://axios.link/YsdD

Honcker, a New York-based aggregator and search engine for car leasing services, has raised about $15 million from IAC, according to TechCrunch. http://axios.link/l35p

Indigo Fair, a San Francisco-based wholesale marketplace, has raised $12 million in Series A funding co-led by Forerunner and Khosla Ventures, with participation from Sequoia Capital. http://axios.link/EiiR

Agent IQ, a San Francisco-based maker of customer support software, has raised a $6.3 million in Series A funding led by Sierra Ventures, with participation from CRCM Ventures and Rubicon Ventures. www.agentiq.com

Ordermark, a Santa Monica, Calif.-based startup that simplifies online order management for restaurants, has raised $2.35 million from TenOneTen, Act One, and Mucker. www.ordermark.com

Private Equity Deals

🚑Amulet Capital Partners has invested in Peloton Advantage, a Parsippany, N.J.-based provider of publication services to medical companies. www.pelotonadvantage.com

Marlin Equity Partners has acquired Propelics, a San Jose, Calif.-based provides mobile strategy and mobile application development solutions for enterprise clients. www.propelics.com

Baird Capital has invested in Nirvana Asia, an Asia-based funeral and bereavement care provider. www.nirvana-asia-ltd.com

Loyal Companies has acquired LinkTrust, a Provo, Utah-bavsed provider of Saas-based affiliate and performance marketing software. www.linktrust.com

Tiger Infrastructure Partners has co-founded Modern Aviation, a company focused on developing and acquiring fixed base operators. Tiger and Modern Aviation have acquired Air Wilmington, owner and operator of the sole FBO at the Wilmington International Airport in Wilmington, N.C. www.modern-aviation.com

Public Offerings

ConvergeOne, which merges with blank check company Forum Merger Corporation, will begin trading on the Nasdaq under the symbol "CVON" and the warrants of ConvergeOne will trade on the Nasdaq under the symbol "CVONW." www.convergeone.com

More M&A

Momo, a Chinese location-based social networking app, has acquired Tantan, a Chinese dating app, for $600.9 million in an all-cash deal. http://axios.link/NS9e

🚑The Stepping Stones Group, a portfolio company of Five Arrows Capital Partners, has acquired and recapitalized Cobb Pediatric Therapy Services, a Georgia-based provider of speech language pathology, occupational therapy, physical therapy and school psychology services. www.cobbpediatric.com

Fundraising

The Alaska Permanent Fund Corporation, the Public Institution for Social Security of Kuwait, RPMI Railpen and Wafra have established Capital Constellation, and committed an initial $700 million to invest in private equity and alternatives managers. https://capitalconstellation.com/

EQT has closed an equities-focused fund at €10.75 billion. www.eqtpartners.com

It's Personnel

Elizabeth Cain has been promoted to partner at OpenView, where she was previously VP of Go-To-Market. www.openviewpartners.com

Daniel Leland has joined B. Riley FBR as head of fixed income capital markets. Previously, he was at Southwest Securities. www.brileyfbr.com

Final Numbers
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Data: Energy Information Administration; Chart: Axios Visuals
Kia Kokalitcheva