Oct 30, 2020

Axios Pro Rata

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Top of the Morning

Illustration: Sarah Grillo/Axios

Stock market volatility is supposed to be IPO's kryptonite, causing issuers to hide out in their private market caves. But this is 2020, when nothing matters.

Driving the news: Lufax, a Chinese online lender, last night raised $2.4 billion in the year's second-largest U.S. IPO.

  • This capped off a week that also saw large floats from Root Insurance ($724 million), Leslie's Pools ($680 million) Allegro MicroSystems ($350 million),and Atea Pharma ($300 million). Each priced either at or above the top of its estimated pricing range.
  • And then there's what's happening in China with Ant Group, which reportedly has a record $3 trillion in retail investor bids for its IPO, slated to hit next week.

Between the lines: Each of the U.S. issuers intentionally planned to price into a presidential election whose outcome is uncertain — not just the victor, but even the process around determining the victor. And they kept marching forward as COVID-19 cases, hospitalizations, and deaths spiked and hopes for economic stimulus slumped.

  • Some of this can be explained by the old maxim about the strongest issuers being able to go public in any market, but that can't account for all 16 U.S. IPOs since the beginning of last week, let alone the successful SPACs.
  • One possibility is that the divergence of IPO performance and public benchmark performance has led some investors to believe IPOs are lower risk and higher reward. For example, Renaissance Capital's U.S. IPO index is up nearly 70% for the year, whereas the S&P 500 is up less than 3%.

But, but, but: There are some signs of mild softening. Three companies — AmeriHome, Caliber Home Loans, and Mavenir — each postponed expected U.S. listings this week.

The bottom line: IPOs show no signs of abating, no matter what happens in the broader markets or real economy, which should set up Airbnb and Doordash to list between Thanksgiving and Christmas.

The BFD

Illustration: Rebecca Zisser/Axios

Ares Management is in early talks to buy listed Australian wealth management and investment firm AMP. AMP shares jumped around 20% on the news, bringing its market cap to nearly A$5.3 billion.

  • Why it's the BFD: This would be an ignominious end to the 171-year firm's independence, as a series of scandals has cut its stock price by more than 70% since mid-2018 (yes, including today's bounce). AMP's bad behavior has included lying to regulators, charging customers for services not rendered, mishandling sexual harassment claims, and even deducting life insurance premiums from the accounts of dead clients.
  • The bottom line: "Suppose the retail-focused wealth management business and bank turn out to be duds. Ares is still picking up a global infrastructure investor (AMP Capital) on the cheap, at a time when the prospects for such businesses look rosy." — David Fickling, Bloomberg
Venture Capital Deals

Benson Hill, a St. Louis-based crop design company, raised $150 million in Series D funding. Wheatsheaf Group and GV co-led, and was joined by Argonautic Ventures, Caisse de dépôt et placement du Québec, Emart, GS Group, Louis Dreyfus Company, iSelect Fund, Fall Line Capital, Mercury Fund, Prelude Ventures, Prolog Ventures, and S2G Ventures. http://axios.link/0t0y

Conductor, a Brazilian payments processor, raised $150 million. Viking Global and Sunley House co-led, and were joined by return backers Riverwood Capital and Visa Ventures. http://axios.link/GZD3

Tomo Networks, a Stamford, Conn.-based home mortgage platform, raised $40 million in seed funding from Ribbit Capital, NFX, and Zigg Capital. http://axios.link/D7Vp

WiTricity, a Watertown, Mass.-based wireless power transfer company, raised $34 million. Stage 1 Ventures led, and was joined by Mitsubishi. www.witricity.com

Hermeus, developer of a Mach 5 aircraft, raised $16 million in Series A funding. Canaan Partners led, and was joined by Khosla Ventures, Bling Capital, and Rise of the Rest. http://axios.link/JQ7M

Onfleet, a San Francisco-based provider of last mile delivery management software, raised $14 million in Series A funding led by Kennet Partners. www.onfleet.com

Wise, a San Mateo, Calif.-based provider of embedded banking solutions, raised $12 million in Series A funding. E.ventures led, and was joined by Grishin Robotics, Base10 Partners, and Techstars. http://axios.link/zjrZ

StackHawk, a Denver-based application security startup, raised $10 million in Series A funding. Sapphire Ventures led, and was joined by return backers Foundry Group, Costanoa Ventures, Flybridge Capital, and Matchstick Ventures. www.stackhawk.com

• Transcend, a NJ-based provider of optimization software for financial firms, raised $10 million in Series A funding led by Nyca Partners.  www.transcendstreet.com

Goodcover, a San Francisco-based provider of online insurance services, raised $7.5 million in Series A funding. Goodwater Capital led, and was joined by Fuel Capital, Broadhaven Ventures, Global Founders Capital, Liquid 2 and TransRe. http://axios.link/WZFU

Advanced Chemotherapy Technologies, a Raleigh, N.C.-based drug startup focused on pancreatic cancer, raised $5.5 million in Series A funding led by Khosla Ventures. www.advancedchemotech.com

🚑 Nutrium, a Portugal-based app for linking dietitians and patients, raised €4.25 million in seed funding led by Indico Capital Partners. http://axios.link/DtBe

Atmost, a San Francisco-based homebuilding startup, raised $4 million from backers like Khosla Ventures and JLL Spark. www.buildatmos.com

Lucidum, a San Jose, Calif.-based cloud asset discovery startup, raised $4 million in seed funding from GGV Capital and SVCI. www.lucidum.io

🚑 CoreConnect, a provider of revenue management services for health care companies, raised $3 million from Primetime Partners, Goat Capital, Funders Club, and Liquid2 Ventures. http://axios.link/Pe4O

Steadily, an Austin, Texas-based insurance startup focused on landlords, raised $3.8 million in seed funding led by Matrix Partners. www.steadily.com

Portl Hologram, a Los Angeles-based developer of hologram machines, raised $3 million from individuals like Tim Draper. http://axios.link/W23n

Raycast, a London-based developer tool access app, raised $2.7 million in seed funding. Accel led, and was joined by YC and Chapter One. www.raycast.com

Private Equity Deals

AnaCap Financial Partners agreed to buy a 60% stake of Carrefour’s (Paris: PA) payments processing business, at a €300 million enterprise value. http://axios.link/UsRo

The Carlyle Group agreed to buy Flender, the mechanical drive unit of Siemens, for just over €2 billion. http://axios.link/BcTQ

FullSpeed, a Greenwood Village, Colo.-based portfolio company of CenterOak Partners, acquired Uncle Ed’s, an operator of quick lube and cash wash services in Michigan. www.fullspeedautomotive.com

Francisco Partners agreed to buy fitness app MyFitnessPal for $345 million from Under Armour (NYSE: UAA). http://axios.link/FC8P

Granicus, a Denver-based portfolio company of Vista Equity Partners, acquired Calytera, an Austin, Texas-based provider of permitting, compliance and licensing automation, from BuildGroup. www.granicus.com

🚑 Morgan Stanley Capital Partners invested in US HealthConnect, a provider of pharma-sponsored continuing medical education and promotional education to health care providers. www.ushealthconnect.com

Public Offerings

🚑 Atea Pharma, a Boston-based biotech focused on viral infections like COVID-19, raised $300 million in its IPO. The company priced 12.5 million shares at $24, versus plans to offer 11 million at $22-$24, for an initial market cap of $1.9 billion. The pre-revenue company will list on the Nasdaq (AVIR) and had raised over $280 million from firms like Morningside Ventures (9.5% pre-IPO stake), Cormorant (9.4%), Bain Capital Life Sciences (7.9%), RA Capital Management, Perceptive Advisors, Rock Springs Capital, Adage Capital Management, T. Rowe Price, Redmile Group, Omega Funds, Ally Bridge Group, and Sectoral Asset Management. http://axios.link/NLER

Lufax, a Chinese online lender, raised $2.4 billion in the year's second-largest U.S. IPO. The company priced at $13.50 per share (high end of range), and will list on the NYSE (LU) with Goldman Sachs (Asia) as lead underwriter. Lufax reports over $1 billion of net income on more than $3 billion in revenue for the first half of 2020. Ping An holds a 42.3% pre-IPO stake, while other backers include Primavera Capital, Qatar Investment Authority, All-Star Investors and SBI Holdings. http://axios.link/M1bK

🚑 Maravai LifeSciences, a San Diego-based provider of acid production, safety testing, and protein detection products for biotech, filed for a $100 million IPO. It plans to list on the Nasdaq (MRVI) with Morgan Stanley as lead underwriter, and reports $64 million of net income on $186 million of revenue for the first nine months of 2020. The company is backed by GTCR. http://axios.link/vNAj

🚑 SQZ Biotech, a Watertown, Mass.-based developer of cell therapies for solid tumors, raised $71 million in its IPO. The company priced at $16 (low end of range), for an initial market cap of $384 million, and will list on the NYSE (SQZ) with BofA and Stifel as lead underwriters. SQZ raised $167 million in VC funding from firms like Polaris Partners (14.1% pre-IPO stake) and Temasek (9.7%). http://axios.link/E6QL

SPAC Stuff

Bull Horn Holdings, a sports and entertainment-focused SPAC, raised $75 million in its IPO. http://axios.link/DPOR

New Beginnings Acquisition, a SPAC led by insurance and real estate development execs, raised $100 million in its IPO. http://axios.link/xo2T

Periphas Capital Partnering, a SPAC formed by Periphas Capital, filed for a $300 million IPO. http://axios.link/jzcJ

Liquidity Events

Illustration: Aïda Amer/Axios

Alliance Data Systems (NYSE: ADS) agreed to buy Bread, a New York-based provider of customized financing solutions for brands, for $450 million in cash and stock. Bread had raised around $74 million from Kinnevik, Bessemer Venture Partners, Menlo Ventures, RRE Ventures, Colle Capital Partners, and Cue Ball. http://axios.link/G3bd

Intel (Nasdaq: INTC) acquired SigOpt, a San Francisco-based optimization platform for model development that had raised nearly $20 million from firms like In-Q-Tel, SGH Capital, Andreessen Horowitz, DCVC, and Blumberg Capital. http://axios.link/USi7

More M&A

AT&T (NYSE: T) is in talks to sell its Crunchyroll anime video unit to Sony (Tokyo: 6758) for more than $950 million, per Nikkei. It reportedly put Crunchyroll on the auction block over a year ago with a $1.5 billion asking price. http://axios.link/gohJ

The Bank of Montreal (NYSE: BMO) is exploring strategic options for its asset management unit, per Bloomberg. http://axios.link/wtEA

Corsair Gaming (Nasdaq: CRSR) acquired EpocCam, a webcam app for iPhones. http://axios.link/EOjd

Insider Inc., the Axel Springer-owned parent company of Business Insider, agreed to buy a majority stake in Morning Brew, a media startup that focuses on business newsletters and podcasts, at a $75 million valuation. http://axios.link/sw6K

Ipsy, a San Mateo, Calif.-based cosmetics subscription service backed by TPG Growth and Sherpa Capital, agreed to buy rival BoxyCharm. http://axios.link/iGHh

Fundraising

Air Street Capital, a London-based VC firm, raised $17 million for its debut fund. www.airstreet.com

GGV Capital is raising $2.5 billion for a series of new funds, including its eighth flagship VC fund, per SEC filings. www.ggvc.com

Oceans Ventures, a New York-based seed firm, raised $11 million for its debut fund. www.oceans.ventures

It's Personnel

Betty Liu stepped down as chief experience officer at Intercontinental Exchange and executive vice chair of NYSE Group. Per an email she sent to colleagues, Liu plans to focus “on investing in or acquiring companies in the media industry.”

Scott Rubin (ex-Tanium, Andreessen Horowitz) joined Lux Capital as its first-ever chief marketing officer. Lux also promoted Alex Nguyen to principal. www.luxcapital.com

Final Numbers
Data: Yahoo Finance; Chart: Axios Visuals

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