Dec 1, 2017

Axios Pro Rata

By Dan Primack
Dan Primack
Top of the Morning

Venture capitalist and entrepreneur Shervin Pishevar is being accused of sexual harassment by multiple women, according to a new report from Bloomberg. The allegations range from inappropriate touching in a public setting to forcible kissing and groping. Key line:

"In each case, the women accused Pishevar of exploiting a professional connection, and using the prospect of a job, mentorship or investment to make an unwanted sexual advance."

Pishevar, co-founder of Sherpa Capital and co-founder and co-executive chairman of Virgin Hyperloop One, is denying the charges, calling himself the "victim of an organized smear campaign."

  • Pishevar made headlines last month after it was revealed that he had been arrested in London for sexual assault over the summer, although charges were never filed. He also sued a GOP-affiliated political research group for defamation, claiming that it had intentionally spread misinformation about both the London incident and other alleged transgressions.
  • Axios and at least three other news organizations also have been working on their own stories about Pishevar.

• 500 discount: Startup accelerator 500 Startups, whose founder Dave McClure left in July following multiple allegations of sexual harassment and assault, has not fully paid the companies that graduated most recently from its program, Axios has learned from multiple sources. Kia has more.

• Tax talk: The trigger is dead. Long live... well, something. Maybe. Caitlin Owens with the latest.

• Supermarket sweep: When Amazon agreed to buy Whole Foods back in June, some viewed it as a death knell for grocery delivery unicorn Instacart (whose best known customer, at the time, was Whole Foods). We offered both a bull and a bear case — the former basically being that fear of the Bezos Borg would drive other grocers into Instacart's arms.

It seems the bull case was correct, as Instacart has been on a big customer acquisition spree. Two weeks ago it was Canadian chain Loblaw. Earlier this week it was U.S. giant Albertsons, which means Instacart is now partnered with five of North America's top six grocers. The only hold-out continues to be market leader Walmart, which seemingly would have the most to gain by taking some wind out of Amazon's sails.

  • Instacart doesn't disclose detailed financials, but CEO Apporva Mehta tells Axios that gross revenue has climbed 150% year-over-year.
  • Albertsons' Safeway unit already has a home delivery service, but it's more about next-day than next-hour. Expect Safeway to maintain its existing service for the time being (likely due to sunk costs and some customer familiarity), but Instacart doesn't plan to leverage any of that infrastructure (software, vehicles or people).
  • Amazon's deal for Whole Foods also seemed to take a toll on recipe kit delivery company Blue Apron, which priced its IPO the same month. Yesterday Blue Apron announced that founder Matt Salzberg was stepping down as CEO, to be replaced by CFO Brad Dickerson (Salzberg will become exec chairman). Dickerson told Axios that it was Salzberg's call. I also asked if he had any frustrations with Goldman Sachs leading its IPO into the Amazon/Whole Foods buzzsaw, given that GS also managed that transaction and had to know the timing would coincide. He said he did not, adding he was "very pleased" with Goldman's work for Blue Apron.

• Math problem: Roark Capital is committing $783 million in equity to the Arby's purchase of Buffalo Wild Wings, per LevFin Insights. I'd assume that must include some major co-invest, given that Roark currently is investing out of a $2.5 billion fund and currently is targeting only $5 billion for its new fund. Not to mention Roark's existing equity exposure to Arby's, via its 2011 buyout. The Atlanta-based firm did not return a request for comment.

• All hail breaks loose: Okay, we're back. Multiple sources say that current Uber employees eligible for the SoftBank deal are only allowed to tender up to 50% of their holdings, while there are no such restrictions on outside investors or former employees. Eligible shareholders have until Dec. 28 to tender. More:

  • Uber founder and chairman Garrett Camp hasn't publicly said if he'll participate in the tender, but on Thursday night he tweeted that he's "looking to buy a significant amount of digital currency for the first time... I'm not going to trade, just buy and hold." He later deleted the tweet.
  • "Investor slogging," is a term that was used by Uber's former C-suiters to describe how they'd work to get big investors on their side, so they don't end up backing the competition. Wine 'em. Dine 'em. This is how the original conversations with SoftBank began, while both Travis Kalanick and Emil Michael were still in charge.
The BFD

Farmers Business Network, a San Carlos, Calif.-based farmer-to-farmer network for crowd-sourcing information on things like seed prices, has raised $110 million in Series D funding. T. Rowe Piece and Temasek co-led, and were joined by return backers Acre Venture Partners, Kleiner Perkins, GV and DBL Partners.

  • Why it's the BFD: Because independent farmers seem to be under siege on all sides, whether it be by their suppliers, mega-rivals or customers. This is an attempt to help even the playing field via both older Internet technology (a version of social networking) and newer technology (data analytics that can incorporate such things drone data and correct pricing for modified seed types). Plus, I really wanted to use that gif.
  • Bottom line: "More than 170,000 people make their business by farming major crops, yet they have among the lowest return on their assets because they're so fragmented, leading to information asymmetry and a lack of bargaining power." — Connie Loizos, TechCrunch
Venture Capital Deals

• H2O.ai, a Mountain View, Calif.-based open source AI platform for the enterprise, has raised $40 million in Series C funding. Wells Fargo and NVIDIA co-led, and were joined by New York Life, Crane Venture Partners, Nexus Venture Partners and Transamerica Ventures. http://axios.link/GTB8

🚑 12 Sigma Technologies, a San Diego-based medical imaging startup, has raised $30 million in Series B funding. SBCVC led, and was joined by CDBI Partners, Delian Capital and return backers Zhen Fund and Matrix Partners China. http://axios.link/DwlI

• Mojio, a Vancouver-based developer of a cloud-based connected car platform, has raised C$30 million in Series B funding. Kensington Capital led, and was joined by Trend Forward Capital, Innogy Ventures and return backers Amazon Alexa Fund, BDC IT Venture Fund, Deutsche Telekom Capital Partners and Relay Ventures. http://axios.link/mZGq

• ReversingLabs, a Cambridge, Mass.-based cybersecurity startup focused on file analysis and classification solutions, has raised $25 million in Series A funding co-led by Trident Capital Cybersecurity and JPMorgan Chase. http://axios.link/6649

🚑 NanoCellect Biomedical, a San Diego-based developer of microfluidic cell sorting technologies for cell-based assays, has raised $10 million in Series B funding. Illumina Ventures, Anzu Partners, Vertical Venture Partners and 5 Prime Ventures were joined by return backers FusionX Ventures and Agilent Technologies. http://axios.link/cgsH

• Affinio, a Nova Scotia-based interest analytics platform, has raised US$9 million in Series B funding from Round13 Capital, Whitecap Venture Partners and Build Ventures. http://axios.link/8nRU

• Graphic India, an India-based comic studio (i.e., it wants to be the next Marvel), has raised $5 million from return backers Start Media and Julian Farrior. http://axios.link/WkTP

Private Equity Deals

• DPA Microphones, a Danish maker of high-end microphones owned by The Riverside Company, has acquired Sound Network, its UK professional audio distributor. www.dpamicrophones.com

• EagleTree Capital has led the acquisition of a majority stake in WaterFleet, a San Antonio, Texas-based provider of mobile water and wastewater treatment solutions. www.waterfleet.com

⛽ Greylock Energy, a portfolio company of ArcLight Capital Partners, has acquired substantially all of the gas production and midstream assets of Denver-based Energy Corp. of America. It also has agreed to acquire membership interests in First ECA Midstream, owner of several gathering and transmission pipeline systems via a joint venture with ECA. www.arclightcapital.com

🚑 Permira has dropped out of the auction for A$1.4 billion Australian radiology company I-Med Radiology Network, leaving only Chinese strategics left, according to The Australian. www.i-med.com.au

• Time Inc. (NYSE: TIME) has sold Sunset, a lifestyle publication "of the modern American West," to Los Angeles-based private equity firm Regent LP. http://axios.link/NWWF

• Togetherwork, a Columbus, Ga.-based portfolio company of Aquiline Capital Partners, has acquired Capturepoint, a Ridgewood, N.J.-based provider of recreation management software. www.togetherwork.com

🚑 Webster Capital has acquired Bristol Hospice, a Salt Lake City-based hospice operator with 11 locations in seven states, from Avalon Health Care Group. www.bristolhospice.com

Liquidity Events

• H.I.G. Capital has sold ARBOC Specialty Vehicles, a Midddlebury, Ind.-based maker of buses for small transit and private operators to New Flyer Industries (TSX: NFI). www.allamericansv.com

• Nippon Life Insurance has agreed to buy a 24.75% stake in Los Angeles-based asset manager TCW Group from The Carlyle Group, which will retain a 31.18% position. Bloomberg values the deal at around $490 million. http://axios.link/L5ZA

⛽ Terra Firma next month will launch a sale process for Italian solar power group RTR Rete Rinnovabile, which could be worth around $1.2 billion, according to Reuters. http://axios.link/wDDk

More M&A

• AJ Networks of South Korea said that it was considering a sale of its 40% stake in listed rental car company AJ Rent A Car. http://axios.link/tR3M

🚑 CVS (NYSE: CVS) is inching closer to a $66 billion agreement to acquire Aetna (NYSE: AET), with a deal to be announced as soon as Monday, per the WSJ. http://axios.link/YvNF

Fundraising

• Fortino Capital Partners, a Belgian growth equity firm, has held a €125 million first close on its €200 million-targeted second fund. www.fortino.be

• John Vrionis is stepping down as a partner with Lightspeed Venture Partners, which he joined in 2006, with sources saying he plans to seek around $150 million for a new seed-stage fund. He will remain a venture partner with Lightspeed, where his investments have included AppDynamics, Docker, MuleSoft, Nicira and Nimble Storage. http://axios.link/tuwL

It's Personnel

Erica Berthou and Jordan Murray are joining the investment funds practice of Kirkland & Ellis, after previously having been with Debevoise & Plimpton, per the NY Times.

• Cowen (Nasdaq: COWN) announced that president Jeffrey Solomon will become that company's next CEO, while current CEO Peter Cohen will remain as chairman. www.cowen.com

• Anthony Lubiano has joined Lateral Investment Management as chief financial officer and chief compliance officer. He previously was a vice president with KKR. www.lateralim.com

🚑 Tom Zajac, former CEO of Population Health for Koninklijke Philips, has become an executive-in-residence with both Summit Partners and Noro-Moseley Partners. www.summitpartners.com

Final Numbers
Dan Primack