Jun 18, 2019

Axios Pro Rata

By Dan Primack
Dan Primack

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Top of the Morning

Illustration: Aïda Amer/Axios

After nearly a year of speculation, Facebook has finally unveiled its plans to create a cryptocurrency, which will be called Libra and debut in 2020.

Why it matters: With more than two billion users, Facebook may be in a better position to roll out a global digital currency than any other company, government, or organization. But there's also plenty of concern over how much influence Facebook will hold over the new currency, given the company's history of amassing power and stirring up privacy controversies.

The details: While Facebook has spent the past year working in-house on Libra, the cryptocurrency will be managed by a Swiss-based foundation, the Libra Association, backed by Facebook and 27 other organizations.

  • These 28 are known as Founding Members, and Libra hopes to have about 100 of them by launch next year. They include Uber and Lyft, Visa, Mastercard and PayPal, and investors like Andreessen Horowitz and Union Square Ventures. Others are nonprofits and academic institutions, like Kiva and Women’s World Banking.
  • In exchange for investing at least $10 million in the foundation’s reserves (which back the Libra token’s value), these members will get to run validator nodes for the Libra blockchain — "a rack of servers that will run transactions," as the foundation's currency chief describes it.
  • They'll also receive special Libra "investment tokens," which are different from the basic form of the cryptocurrency, and get a vote as part of the foundation’s council.

Facebook’s connection to Libra will be as a member of the governing board and as the maker of a digital wallet, Calibra, for sending and receiving the currency. Calibra will initially be available inside Facebook’s Messenger app and its WhatsApp business, as well as in standalone iOS and Android apps. The company "will make no money off this for a long time," Calibra's Kevin Weil said.

Be smart: This is not Bitcoin. Unlike the pioneering cryptocurrency and many of the other digital-token experiments out there, the goal here is not to supplant the traditional financial system but rather to extend it to serve people without access to conventional banking or stable "fiat" (government-created) currency.

Go deeper:

Elsewhere on Axios: Check out my colleagues Dion Rabouin's argument that "Apple needs a next act" and Sara Fischer's look at ex-Snap exec Imran Khan's new e-commerce startup, Verishop.

🎙Podcast: Dan and Axios' Alayna Treene dig into Democrats' indecision on impeachment, including a large number of freshmen who are holding their fire. Listen here.


Illustration: Rebecca Zisser/Axios

Ripple, the startup behind the XRP cryptocurrency, has agreed to invest up to $50 million in MoneyGram, the giant money-transfer service. Ripple agreed to buy $30 million worth of shares and warrants to buy stock at $4.10 a share (for a 10% stake in the company), and additional warrants for up to $20 million worth of newly issued stock, also at $4.10 a share, over the next two years at MoneyGram’s discretion.

  • Why it's the BFD: The irony of the timing can't be understated.
  • Bottom line: "It is not the largest deal Ripple’s undertaken but is the largest company in which it has invested—and the first time it has invested in a publicly traded company." — Paul Vigna, WSJ.
Venture Capital Deals

Optimizely, a San Francisco-based provider of A/B testing tools, has raised $50 million in Series D funding led by Goldman Sachs Private Capital, with Accenture Ventures also participating, and $55 million line of credit from Bridge Bank. http://axios.link/kLpA

Tally, a San Francisco-based financial technology startup, has raised $50 million in new funding led by Andreessen Horowitz. http://axios.link/r9v7

Zego, a London-based insurance startup, has raised $42 million in new funding led by Target Global, with Taavet Hinrikus and existing backers Balderton Capital and Tom Stafford of DST Global also participating. http://axios.link/wkxV

🚑 Zava, a London-based telemedicine startup, has raised $32 million in Series A funding led by HPE Growth. http://axios.link/ggFr

Elevate, a Los Angeles-based law firm, has raised $25 million in new funding from Kayne Partners. www.elevateservices.com

Hazelcast, a Palo Alto, Calif.-based in-memory computing platform, has raised $21.5 million in new funding led by C5 Capital, with existing investors Bain Capital Ventures, Earlybird Venture Capital and Capital One Growth Ventures also participating. www.hazelcast.com

Token, a San Francisco-based blockchain-based payments software, has raised $16.5 million in new funding from BNP Paribas’ Opera Tech Ventures, Octopus Ventures and EQT Ventures. http://axios.link/qZJ2

Growth Street, a London-based banking tech company, has raised $12.5 million (£10 million) in new funding funding led by Merian Chrysalis Investment Company. www.growthstreet.co.uk

NewtonX, a New York-based real-time expert search engine, has raised $12 million in Series A funding led by Two Sigma Ventures, with Third Prime Capital and Xfund also participating. www.newtonx.com

Aptible, a San Francisco-based infrastructure hosting company, has raised $12 million in Series A funding led by Maverick Capital, with Thrive Capital and Western Technology Investment also participating. www.aptible.com

Livepeer, a New York-based Ethereum-based video encoding startup, has raised $8 million in Series A funding led by Northzone, with Houseparty founder Ben Rubin also participating. http://axios.link/3k04

Payveris, a Cromwell, Conn.-based open API-based payments platform, has raised $7 million in Series D funding led by Mosaik Partners, with Connecticut Innovations, Advantage Capital, Black Dragon Capital and others also participating. www.payveris.com

GuestReady, a London-based service that lets shared-economy hosts manage their business on Airbnb and other rental sites, has raised $6 million in Series A funding led by Impulse VC and VentureSouq, with Boost Heroes, Aria Group and 808 Tech Ventures also participating. http://axios.link/JMF9

Novi Money, a San Francisco-based financial literacy company, has raised $3 million in seed funding from Runa Capital, Lightspeed Venture Partners, Doberman Forward, Freedom Financial Network, M ventures, SGH Capital, Republic.co and Vectr. www.novimoney.com

NeedsList, a Durham, N.C.-based online platform that matches products and services to communities in need, has raised $1 million in funding from Amplio Ventures, Marigold Capital, Omidyar Network, Next Wave Impact, Silicon Valley Social Ventures and the Kuo Sharper Fund. www.needslist.co

PredictiveHR, a Boston-based company for employee analytics, has raised $1 million in financing from angel investors. www.predictivehr.com

Private Equity Deals

The Halifax Group has invested in StrataTech Education Group, a Phoenix-based provider of facility-based post-secondary education with a focus on welding and heating, ventilation, air conditioning and refrigeration (“HVACR”) trades. www.stratatech.com

ERP Power, backed by Angeles Equity Partners, has acquired Lumenetix, a Scotts Valley, Calif.-based maker of tunable lighting. www.lumenetix.com

Butterfly has acquired Bolthouse Farms, a Bakersfield and Santa Monica, Calif.-based maker of natural food and beverage company, from Campbell Soup Company for $510 million in cash. http://axios.link/Urch

🚑 Great Point Partners has recapitalized SteriPack, an Ireland-based contract manufacturing and services company for the medical device and pharmaceutical industries. www.steripackgroup.com

Public Offerings

Avaloq, a Switzerland-based banking software company, is considering an IPO in the next two to four years, its CEO told Reuters on Tuesday. A trade sale would be another option, he said. http://axios.link/2Xh1

Mostly, we're just waiting around for the Slack direct listing on Thursday.

More M&A

MeatEater has acquired First Lite, a Ketchum, Idaho-based hunting technical apparel and gear company. www.firstlite.com

🚑 Consolidated Container Company has acquired Tri State Distribution, a Sparta, Tenn.-based retail pharmaceutical packaging company. http://axios.link/hXVu

Intertrust has acquired Viteos, a Somerset, N.J.-based provider of fund back-end management software, for $330 million from PPC Enterprises LLC, FiveW Capital LLC and Viteos management. http://axios.link/U2SH

Tieto is acquiring Evry, a Norway-based IT company, for 13.2 billion crowns ($1.5 billion) to create a Nordic digital consultancy, giving Evry’s owners a 37.5% stake in the new company and a total cash consideration of approximately 200 million euros. http://axios.link/Ep7q

Infineon Technologies raised 1.545 billion euros ($1.74 billion) in an accelerated capital increase via private placement to help fund the cost of its planned acquisition of Cypress Semiconductor. http://axios.link/X0Zz

Prosperity Bancshares will acquire LegacyTexas Financial Group, a Plano, Texas-based regional bank, for $2.1 billion. LegacyTexas shareholders will receive 0.528 Prosperity shares, and $6.28 in cash for each share held, representing a deal value of $41.78 per share, a premium of 9.3% based on LegacyTexas’ closing price on Friday. http://axios.link/SQHl

⛽️ Saft has acquired Go Electric, an Anderson, Ind.-based developer of distributed energy resiliency solutions for microgrids. http://axios.link/9JvD


Adams Street Partners, a Chicago-based private markets investment management firm, has closed $1.05 billion for its Global Secondary Fund 6. www.adamsstreetpartners.com

Cathay Innovation has raised €320 million in a first close for its second venture capital fund, with a target of €500 million. http://axios.link/8lYF

Arboretum Ventures has raised $250 million for its newest fund. http://axios.link/XKmi

Valo Ventures has closed on $175 million for its debut venture capital fund. http://axios.link/wcLV

Bluebird Ventures has raised $103.5 million for a new fund according to an SEC filing.

Green Equity Investors is raising an unspecified amount of capital for its eight private equity fund, according to an SEC filing.

It's Personnel

Adna Pekmezovic and Zann Ali have joined 2048 Ventures as senior associates. Previously, Pekmezovic was at Bank of America Merrill Lynch and Ali was at Putnam Investments. http://axios.link/wkp4

Paul Lee and Kendrick Kho are joining Global Founders Capital as senior associates in the firm’s West Coast offices. Previously, they were Mithril Capital and Amazon, respectively. www.globalfounderscapital.com

Final Numbers
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Data: Baker McKenzie; Chart: Harry Stevens/Axios
Dan Primack