Jan 9, 2019

Axios Pro Rata

Hello, readers! Dan wasn't feeling great so I'm filling in today. As always, send me tips and scoops at kia@axios.com (Dan's coming back, but I want to hear from you too!)

Top of the Morning

Jerome Powell. Photo: Xinhua/Liu Jie via Getty Images

Jerome Powell's goal since he became chairman of the Federal Reserve has been to keep a low profile and rebuild trust and confidence in the U.S. central bank — among lawmakers and the public, writes Axios' Dion Rabouin.

He's sought to win friends on Capitol Hill, taking seemingly as many meetings with lawmakers in his first months on the job as former chairwoman Janet Yellen did in four years, and he's upped the number of Federal Reserve press conferences and made a point to speak more plainly.

  • Yes, but: Though his goal has been to make the public think that the economic data is steering the economy rather than the Fed, he's done just the opposite.
  • Thanks to his pronouncement on Friday that the Fed would be "patient" with future interest rate hikes and ready to change course "significantly if necessary" — a reversal of his previous stay-the-course message after the Fed raised U.S. interest rates in December — Powell has lost credibility in the eyes of many market watchers.
  • "The Fed is backing down as we expected. This is the policy mistake we awaited," said Yves Lamoureux, president of behavioral research firm Lamoureux & Co., who predicted both the February equity market peak and December swoon in 2018. "Stocks get hammered next week."
  • "I am flummoxed by this man I once had faith in," said Danielle DiMartino Booth, a former adviser to Dallas Fed President Richard Fisher and current CEO of Quill Intelligence.
  • Bottom line: Powell's attempts to please everyone predictably have gone awry. The market will be fully on edge and ready to dissect his every word as he speaks on Thursday at the Economic Club of Washington, which is exactly what he didn't want.
  • Read Dion's full story here.

Big VC bucks: This week, both PwC-CB Insights and CrunchBase released their reports for Q4 2018 VC investment activity, and the takeaway is that investors keep writing massive checks.

  • And while there were fewer U.S. deals last year, they got bigger and overall dollars hit record levels since 2000. This, of course, mirrors the trend we’ve been seeing across all stages of concentration of VC dollars into fewer and bigger deals (even seed deal count is at a 5-year low).
  • One more of these VC reports comes out tomorrow morning -- we’ll note any interesting nuggets.

Today in autonomous vehicle funding: Aurora Innovations, the autonomous driving startup co-founded by Chris Urmson (of Google self-driving car unit fame) and Sterling Anderson (who ran Tesla's Autopilot), is raising at least $500 million led by Sequoia Capital that could value it at more than $2 billion, as Recode reported yesterday. A source confirmed this to Axios but emphasized that the deal is not final so the numbers could change.

🎧 Pro Rata Podcast: Dan discusses America's $1.5 trillion of student debt, and a new model that eschews tuition in favor of repayments via a percentage of future salary. His guest is Austen Allred, co-founder and CEO of The Lambda School. Listen here.


Photo: Justin Sullivan/Getty Images

Chevron and Occidental are investing an undisclosed amount in Carbon Engineering, a Canadian company aiming to commercialize technology that captures carbon emissions directly from the atmosphere.

  • Why it's the BFD: "This ... highlights the first significant collaboration between a DAC developer and the energy industry, with two global energy leaders investing in DAC as a mechanism to reduce emissions from transportation and enable permanent capture of existing atmospheric CO2 that can be utilized both in oil production and in direct synthesis of fuels," the company said in its announcement. Its other investors include Bill Gates.
  • Bottom line: "It's a clear sign of increasing interest in the viability of direct air capture (DAC) technologies," writes Axios's Ben Geman.
Venture Capital Deals

Onit, a provider of enterprise workflow solutions, has secured $200 million in funding. The investor was K1 Investment Management. http://axios.link/Hp8M

🚙 ClearMotion, a Boston-based company developing a “digital chassis” for cars, has raised $115 million in Series D funding led by Franklin Templeton, with Microsoft, Bridgestone, Qualcomm, World Innovation Lab, NewView Capital, Eileses Capital, and “clients advised by J.P. Morgan Asset Management” also participating. http://axios.link/1Aid

🚑 BrightGene Bio-Medical Technology Co., a China-based biopharmaceutical company, has raised about $80 million in later-stage funding led by Sequoia China and HighLight Capital, with GF Qianhe Investment also participating. http://axios.link/TGGA

TaxJar, a company that provides businesses with software to automate their sales tax calculations and filing, has raised $60 million in new funding from Insight Venture Partners. http://axios.link/1AGg

🚑 GreenLight Biosciences, a Boston-based developer of RNA-based solutions for agriculture and pharmaceutical applications, has raised $50 million in new funding led by S2G Ventures, Baird Capital and Blue I/O, with Continental Grain Company, Tao Capital Partners, and Alexandria Venture Investments also participating. http://axios.link/hibW

🚑 Cabaletta Bio, a Radnor, Pa.-based biotech startup working on T-cell therapies for B certain autoimmune diseases, has raised $50 million in Series B funding from Deerfield Management Company, Boxer Capital of Tavistock Group, Redmile Group, Cormorant Capital, Adage Capital Management, and 5AM Ventures, among others. http://axios.link/wtqi

RainFocus, a Lehi, Utah.-based online event marketing platform, has raised $40 million in new funding from JMI Equity. www.rainfocus.com

Managed By Q, a New York-based startup that provides office management and cleaning services, has added $25 million to its Series C round led by RRE and GV, with DivCo West,Oxford Properties and others also participating. http://axios.link/55gZ

Olo, a New York-based mobile and online ordering platform for 250 restaurant chains, has raised $18 million in new funding from Tiger Global. http://axios.link/IB90

Nreal, a China-based company developing augmented reality headsets, has raised $15 million in total funding, including a Series A round from Shunwei, the venture fund that Xiaomi’s founder set up, Baidu’s video streaming unit iQiyi, China Growth Capital and others. http://axios.link/tyOF

GAN Integrity, a New York-based cloud-based compliance management software, raised $15 million in Series B funding. Aquiline Technology Growth and Edison Partners co-led the round. www.ganintegrity.com

GeoSpock, a U.K.-based extreme-scale spatial big data integration company, raised £10 million ($12.7 million) in funding from Cambridge Innovation Capital, Parkwalk Advisors, Global Brain,31Ventures, and KDDI Supership among others. www.geospock.com

Bowery Valuation, a New York-based company building real estate appraisal tools, has raised $12 million in Series A funding from Corigin Ventures, Camber Creek, Navitas Capital, Fika Ventures and Builders. http://axios.link/4W1K

Yallacompare, a Middle East-based comparison site for financial products, has raised $8 million in funding led by STC Ventures, Wamda Capital and Argo Ventures. http://axios.link/DAjq

Scape Technologies, a U.K.-based provider of visual positioning services, raised $8 million in seed funding from LocalGlobe, Mosaic Ventures, Fly Ventures and Entrepreneur First. www.scape.io

LendingFront, a New York-based maker of small business lending software, raised $4 million in Series A funding led by Information Venture Partners, with Newark Venture Partners, Revel Partners,Contour Venture Partners, Struck Capital, ValueStream Ventures and Las Olas VC also participating. www.lendingfront.com

Carson, a New York-based real estate tech startup for managing unstaffed residential buildings, has raised $3 million in seed funding led by BuildingLink. http://axios.link/DUYI

Totle, a Detroit-based startup providing an aggregator of so-called “decentralized exchanges” for digital tokens, has raised $1 million in funding led by Arrington XRP, NEO Global Capital (NGC), and Goren Helm Ventures. www.totle.com

Private Equity Deals

Shorehill Capital LLC has acquired a majority ownership stake in Functional Devices, a Sharpsville, Ind.-based maker of relays, power supplies, transformers, sensors, enclosures and wireless devices. www.functionaldevices.com

TZP Group has acquired Quest Events, a Frisco, Texas-based provider of rental, service, and logistics solutions for drapery and other products for the events industry, from Goldner Hawn and Tonka Bay Equity Partners LLC. www.questevents.com

Investcorp Technology Partners has acquired Ubisense’s SmartSpace business unit for 35 million pounds ($44.5 million). SmartSpace is an enterprise software and sensor platform that generates and interprets location data. www.ubisense.net

Improving, backed byTrinity Hunt Partners, has acquired Atlanta-based Innovative Architects, a provider of application development and engineering services and solutions. www.innovativearchitects.com

NBG Home, backed by Sycamore Partners, has acquired Quoizel, a Charleston, S.C.-based provider of decorative lighting. www.quoizel.com

Public Offerings

Acamar Partners Acquisition, a Miami-based blank check company led by the Executive Chairman of travel retailer Dufry, filed on Tuesday with the SEC for an IPO. It plans to raise $300 million by offering 30 million units at a price of $10 and would command a market value of $375 million. Units consist of one share of common stock and one-third of one warrant; whole warrants are redeemable at $11.50 per share. It plans to list on the Nasdaq under the symbol ACAMU. Goldman Sachs and Deutsche Bank are joint bookrunners.

Exeter Finance, an Irving, Texas-based full-service subprime auto lender backed by Blackstone, filed on Tuesday with the SEC for a $100 million IPO. It plans to list on the NYSE under the symbol XTF. Citi and Wells Fargo Securities are joint bookrunners on the deal.

More M&A

Amazon has reportedly acquired CloudEndure, an Israel-based disaster recovery startup. Outlets report the deal was worth between $200 million and $250 million. http://axios.link/gSja

Plaid has acquired Quovo, a New York-based startup and competitor that links bank accounts to financial apps, for reportedly just under $200 million. http://axios.link/uxNZ

🚑 Healthgrades has acquired Influence Health, a Birmingham, Ala.-based developer of customer relationship management for hospitals. www.healthgrades.com

Trigo Group, a portfolio company of Ardian, has acquired Supplier Management Solutions, a provider of supplier management services to manufacturers in the aerospace and defense supply chain. www.smssolutionsinc.com

Alibaba Group Holding has reportedly acquired Data Artisans, a Germany-based data analysis startup for about 90 million euros ($103.1 million), per German business daily Handelsblatt. http://axios.link/ZQzp

⛽ Faroe Petroleum’s board told shareholders to accept the offer from Norway’s DNO of 160 pence per share in a hostile takeover bid. http://axios.link/a0sh


🚑 Providence Ventures, the Seattle-based venture capital arm of Providence St. Joseph Health, has raised $150 million for its second fund. www.providenceventures.org

Matrix Partners has closed $300 million for its third India-focused venture capital fund. \http://axios.link/x6fZ

It's Personnel

Iconiq Capital has hired Nugi Jakobishvili, global head of alternative solutions at BlackRock, as its chief investment officer in January, reports ActiveLPs. http://axios.link/73z7

CIP Capital has promoted Kevin Formica to vice president and hired Michael Grady as a principal for its senior investment team. www.cip-capital.com

Principle Capital, a Shanghai-based private equity firm, has named Raymond Lau as a vice president. He was previously managing director of Lau Equity, a family investment office. www.princapital.com

Tailwater Capital, a Dallas-based energy-focused private equity firm, has promoted Joel Fry to partner, Scott Peters to vice president/E&P portfolio manager, and Clark Hudnall and Tanner Newton to senior associates. www.tailwatercapital.com

EQT Ventures has added Johan Svanström and Lyle Fong as investors in its London office. www.eqtventures.com

East Ventures, an early stage venture capital firm focused on Southeast Asia and Japan, has promoted Melisa Irene as its first female partner. She joined the firm as an associate in 2015 and was promoted to principal last year. www.east.vc

Final Numbers
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Data: Analysis of Wall Street outlooks; Chart: Andrew Witherspoon/Axios