February 21, 2024

Top of the Morning

Illustration: Gabriella Turrisi/Axios

To quote Dan, "the column didn't come together in time," so let's catch up some ongoing dealmaking sagas.

🌎 Climate no-action: A handful of the largest asset managers β€” including JPMorgan, State Street, and PIMCO β€” have left the Climate Action 100+ coalition. Some are citing the group's next phase of its efforts, which would entail pressing portfolio companies to adopt pro-climate policies.

  • Between the lines: It's clear that political pressure and concerns over litigation are getting to folks. Notably, the exodus is among American firms β€” BlackRock's Europe-based subsidiary is staying while its U.S. parent is leaving.
  • What we're watching: Whether U.S. regulators and lawmakers do anything that could give investors better legal standing.

😯 Palace intrigue: Yesterday, Sequoia Capital withdrew its days-old request that Klarna chairman and independent director (and former Sequoia partner) Mike Moritz depart from the board. Instead, Sequoia partner Matt Miller will leave and be replaced by a different colleague.

  • Driving the news: According to a letter obtained by The Information, the venture firm had some more conversations and learned more information and effectively changed its mind.
  • Context: Clearly there was some sort of disagreement between Miller and Moritz, though the details are unclear. According to a source close to Sequoia, the initial concerns related to making sure the company has the right board at it heads into getting ready for an IPO. (If you have more details about this, let me know!)
  • The bottom line: As the famous saying goes: "Come at the king, you best not miss."

πŸ› Proxy fight: Arkhouse Management has nominated nine directors to Macy's board.

  • Catch up quick: Macy's previously rejected the activist investors' unsolicited $5.8 billion takeover offer, so it's now going direct to investors.
  • Be smart: Macy's feedback that it needs committed financing has some logic. "Debt financing at reasonable terms is difficult to come by, hence Macy's desire for committed financing versus a 'highly confident letter' from Jefferies, which is providing the bidders with financial advice," my Axios Pro colleagues Richard Collings and Kimberly Chin note.
  • What's next: In addition to evaluating Arkhouse's nominees, Macy's says it plans to share more about its "value-creating strategy" during its Q4 earnings on Feb. 27.

The BFD

Illustration: AΓ―da Amer/Axios

Reddit plans to reserve IPO shares for 75,000 of its most prolific users, per the Wall Street Journal.

Why it's the BFD: We're still in an IPO drought and Reddit's bet is that die-hard fans can help it ride a smooth public listing wave.

Flashback: Uber and Lyft did something similar during their own IPOs a few years ago (with mixed results) as did Robinhood in 2021.

The bottom line: "Ideally for the company and its underwriters, Reddit shares will rise in their stock-market debut, bestowing big gains on those who buy in at the IPO price. If the stock falls, however, it could anger those members of Reddit's community β€” a group that, broadly speaking, hasn't shied away from boycotts in the past." β€” Corrie Driebusch, WSJ

Venture Capital Deals

β€’ Monzo, a U.K.-based digital bank, is raising up to Β£350m at a Β£4b valuation, in a round led by CapitalG, with Tencent, Ribbit Capital and HongShan, per the Financial Times. https://axios.link/3SOgaNu

β€’ Magic.dev, a San Francisco-based startup building an AI software engineer, raised $117m in funding led by Nat Friedman and Daniel Gross, with CapitalG and Elad Gil also participating. www.magic.dev

β€’ Clumio, a Santa Clara, Calif.-based cloud data backup and recovery company, raised $75m in Series D funding led by Sutter Hill Ventures, with Index Ventures, Altimeter Capital, and NewView Capital also participating. www.clumio.com

β€’ Simetrik, a Colombian financial records automation startup, raised $55m in Series B funding led by Goldman Sachs, with FinTech Collective, Cometa, Falabella Ventures, Endeavor Catalyst, Actyus, Moore Strategic Ventures, Mercado Libre Fund and the co-founders of Vtex also participating. https://axios.link/48ozB5d

πŸš‘ Bioptimus, a French biotech AI startup, raised $35m in seed fund led by Sofinnova Partners, with Bpifrance, Frst, Cathay Innovation, Headline, Hummingbird, NJF Capital, Owkin, and Top Harvest Capital also participating. https://axios.link/49mdQEt

πŸš‘ Oula, a New York-based maternity care clinic, raised $28m in Series B funding led by Revolution Ventures and Maverick Ventures, with GV, Female Founders Fund, 8VC, Alumni Ventures, and Great Oaks also participating. https://axios.link/49p3SCc

β€’ Qloo, a New York-based culture trends analytics startup, raised $25m in Series C funding led by AI Ventures, with AXA Venture Partners, Eldridge and Moderne Ventures also participating. https://axios.link/3I3KGxU

β€’ Astrotalk, an Indian on-demand astrology startup, raised $20m in Series A funding from Left Lane Capital. www.astrotalk.com

πŸš‘ AZMed, a French medtech AI startup, raised €15m in Series A funding from Maison Worms, Techstars, Tempact Ventures and others. www.azmed.co

β€’ Insamo, a Berkeley, Calif.-based biotech company, raised $12m in seed funding from Playground Global, venBio, and MRL Ventures Fund. www.insamo.com

β€’ Trace Genomics, an Ames, Iowa-based soil analytics startup, raised $10.5m in Series B funding led by S2G Ventures and Ajax Strategies, with Rabo Ventures also participating. https://axios.link/48us0SC

β€’ Novity, a San Carlos, Calif.-based maintenance prediction AI company, raised $7.8m in funding led by WERU Investment, with Myriad Venture Partners, and Metawater Co. also participating. www.novity.us

β€’ Pulsate, an Irish community bank customer engagement startup, raised $7.75m in Series A funding led by TruStage Ventures and Curql Collective. https://axios.link/3OO9Tjq

β€’ EngineEars, an LA-based music engineering and studio marketplace, raised $7.5m in seed funding led by Drive Capital, with Slauson & Co., 645 Ventures, FLUS Investment Group, Kendrick Lamar, Ghazi, AlexDaKid, Roddy Ricch, Mustard, YG, DJ Khaled, Russ, Tunde Balogun, and Sean Famoso also participating. www.engineears.com

🌎 Eli Technologies, a Philadelphia-based startup helping with home electrification financing, raised $6.8m in seed funding led by Lowercarbon Capital and Spero Ventures, with New System Ventures, Looking Glass Capital, Leap Forward Ventures, Untapped Capital, and RallyCap VC also participating. www.eli.build

β€’ Monite, a German SMB billing automation startup, raised $6m in additional seed funding led by Valar Ventures and Third Prime. https://axios.link/3SIXTBb

πŸš‘ WIVI Vision, a Spanish vision health startup, raised $4.3m in Series A funding led by Adara Ventures, with Hearstlab, AvanΓ§sa, Caixabank DayOne, BBVA Spark, and Banco Santander also participating. https://axios.link/49EMg4Y

β€’ Device Authority, an enterprise identity and access management company, raised $2m in additional Series A funding from Mercato Partners' Prelude. www.deviceauthority.com

πŸš‘ Juniper, a U.K.-based reproductive healthcare insurance provider, raised Β£1.5m ($1.9m) in pre-seed funding led by Insurtech Gateway, with 2100 Ventures, Exceptional Ventures, and Heartfelt, Vera Baker, Charles Delingpole, Matt Cooper, Tara Reeves, and others also participating. www.getjuniper.co.uk

β€’ SigScalr, a Boston-based data observability startup, raised $1.76m in pre-seed funding led by Scribble Ventures, with WestWave Capital and Forward Slash Capital also participating. www.sigscalr.io

Private Equity Deals

πŸš‘ Advent, Blackstone, Bain Capital, CVC, EQT and KKR and others are interested in Sanofi's $20b consumer health division of Sanofi, per Bloomberg. https://axios.link/3OOnes0

β€’ Cloyes Gear & Products, backed by MidOcean Partners, acquired Automotive Tensioners, a Denton, Texas-based front-end accessory drive pulley and tensioner supplier to the automotive aftermarket. www.atinc-usa.com

β€’ Mubadala Investment Co. is considering investing in Heathrow Airport, per Bloomberg. https://axios.link/3wwLGb3

β€’ S.i. Systems, backed by Cornell Capital and TorQuest Partners, acquired HVN Solutions, a Canadian IT consulting firm. www.sisystems.com

β€’ Thoma Bravo is exploring a sale of JD Power for $8b, per Bloomberg. https://axios.link/3T5c58K

β€’ Universal Music Group will acquire a 25.8% stake in Chord Music Partners, a music IP company backed by Dundee Partners, for $240 million (€223 million) from KKR, valuing the company at $1.85 billion. https://axios.link/3OMvpVS

Public Offerings

β€’ Astera Labs, a Santa Clara, Calif.-based cloud and AI infrastructure company, filed for an IPO. It plans to list on the Nasdaq but has not selected a ticker symbol. Morgan Stanley, JPMorgan, Barclays, Deutsche Bank, Evercore ISI, and Jefferies are the joint bookrunners on the deal. https://axios.link/3T3gtVQ

More M&A

β€’ Apica acquired Circonus, a Malvern, Pa.-based telemetry data company, alongside and undisclosed amount of funding led by Riverside Acceleration Capital, with Industrifonden, SEB Foundation, Oxx, and Leo Capital also participating. www.apica.io

β€’ Apryse acquired LeadTools, a Charlotte, N.C.-based provider of AI-powered software development tools. www.leadtools.com

β€’ Havenly acquired The Citizenry, a Dallas-based artisan home decor startup. https://axios.link/3OOkZVC

⛽️ Occidental Petroleum is exploring a sale of Western Midstream Partners, which has a market value of about $20b, including debt, per Reuters. https://axios.link/4a0sb9F

Fundraising

β€’ CVC, a Luxembourg-based private equity firm, raised $6.8b for its sixth Asia fund. www.cvc.com/private-equity/asia

🌎 Overture Ventures, an LA-based early-stage venture firm, raised $60m for its debut fund. https://axios.link/3wlrPvz

It's Personnel

β€’ CRV, a Palo Alto, Calif.-based venture firm, promoted Brittany Walker to general partner. www.crv.com

β€’ Ironspring Ventures hired Max Adelman as an investment associate. He was previously an equity research analyst at Morgan Stanley. www.ironspring.com

β€’ Revelstoke Capital Partners has promoted Blake Bennett to partner, chief financial officer and chief compliance officer, Samantha Gordon-Webb to partner, Ashley McNamee to partner, and Greg Pupo to partner. www.revelstokecapital.com

Final Numbers

Data: McKinsey; Chart: Axios Visuals
Data: McKinsey; Chart: Axios Visuals

M&A activity in the financial services sector continued to decline in 2023, with both the number of deals and total transaction value down by more than 50% off 2021 highs, according to McKinsey's annual M&A report.

Why it matters: M&A activity in 2023 was driven by a desire among financial services companies to either scale up or acquire troubled assets at a discount, reports Axios Pro's Ryan Lawler.

πŸ™ Thanks for reading Axios Pro Rata, and to editors Javier David and Bryan McBournie! Please ask your friends, colleagues, and Redditors to sign up.