August 28, 2023

Top of the Morning

Illustration: Tiffany Herring/Axios

In June I wrote that IPOs were back, after Cava and two other successful listings.

  • But no one else seemed to agree, judging by the dearth of subsequent filings, which caused me to waver.
  • Then came Friday, when three major IPO filings dropped — setting up a very busy September. And maybe, just maybe, a crowded Q4.

Driving the news: Instacart is the trio's biggest name, and the one we've been waiting on the longest.

  • The headline here is profitability. Not just for the company's growing advertising business (now around one-third of revenue), but also in its core grocery delivery activities. Plus, Instacart has nearly $2 billion of cash on-hand.
  • We also learned that PepsiCo will invest $175 million concurrent to the IPO, and that the company's largest outside shareholders are Sequoia Capital and D1 Capital Partners.
  • No IPO pricing info yet, but you may recall that Instacart was valued at $39 billion during its last private round in early 2021. Since then, however, it's repeatedly reset its share price, most recently to $13 billion.

By the numbers: There have been fewer IPOs in the 18 months beginning January 2022 than for any single year since 2016.

Also coming to market will be Klaviyo, a Boston-based marketing automation company most recently valued at $9.5 billion, and Neumora Therapeutics, a Watertown, Massachusetts-based biotech that was valued by VCs at $1.8 billion.

  • Klaviyo also reports profits for the first half of 2023, on revenue of $320 million, while Neumora in in Phase 3 clinical trials on a candidate aimed at treating major depressive disorder.
  • Plus, of course, the expected mega-IPO for British chip designer Arm.

The bottom line: Finally.

The BFD

Photo: Jerod Harris/ACMA2014/Getty Images for ACM

Hostess Brands (Nasdaq: TWNK) hired Morgan Stanley to explore a sale, after it received takeover interest from strategics like General Mills, PepsiCo and Mondelez, per Reuters.

Why it's the BFD: Hostess, like its iconic Twinkies, has an uncommonly long shelf life.

  • The 104-year-old company filed for bankruptcy in both 2004 and 2012.
  • The latter time it was acquired for $410 million by Apollo Global Management and Metropoulos & Co., which then took it public four years later via a Gores Group-sponsored SPAC.

Flashback: Axios Pro's Richard Collings suggested a Mondelez/Hostess tie-up in February, with Hostess CEO Andrew Callahan telling him that any such deal would need to be for a robust premium.

Investor reax: Hostess shares surged on the Friday afternoon reports, closing up 21.7% with a $3.55 billion market cap. Previously, the Kansas-based snacker's stock was down around 1% in 2023.

The bottom line: "Hostess became an acquisition target after it raised prices on some of its products to boost revenue, fueling investor concerns over its prospects." — Reuters

Venture Capital Deals

🚑 Moxie, a medspa operations platform, raised $15.7m co-led by SignalFire and Boulton & Watt. www.joinmoxie.com

• Aditude a Canadian provider of ad ops tech for online publishers, raised US$15m in Series A funding from Volition Capital. www.aditudemedia.com

• Qase, an Austin, Texas-based provider of software QA testing and reporting solutions, raised $7.2m in Series A funding. Chrome Capital led, and was joined by FinSight Ventures and S16VC. https://axios.link/3YV4uec

• Jitty, a British property search engine, raised $2m in pre-seed funding led by Gradient Ventures. www.jitty.com

• Databricks, an SF-based unified data analytics platform, is in talks to raise new funding at a $43b valuation, per Bloomberg. Its most recent venture valuation was $38b, and the company recently agreed to buy OpenAI rival MosaicML for $1.3b. https://axios.link/45nXWHy

Private Equity Deals

• Blue Torch Capital agreed to buy bankrupt pillow maker Pegasus Home Fashions, an Elizabeth, N.J.-based company bought two years ago by H.I.G. Capital. https://axios.link/3Pf4rXH

• BrightView (NYE: BV), a Blue Bell, Pa.-based commercial landscaper, secured a $500m convertible preferred investment from OneRock Capital Partners. www.brightview.com

🚑 FFL Partners invested in Johnson County Clin-Trials, a Lenexa, Kan.-based clinical research site platform. www.jcct.com

• Grovecourt Capital Partners acquired Traffic & Mobility Consultants, a Florida-focused transportation planning and traffic engineering consultancy. www.trafficmobility.com

• KSL Capital Partners agreed to buy luxury hotel owner Hersha Hospitality Trust (NYSE: HT) for around $1.4b, or $10 per share. https://axios.link/3sq6Dm1

• Peak Technologies, a Linthicum Heights, Md.-based portfolio company of Sole Source Capital, acquired North Coast Technical, a Chesterland, Ohio-based provider of machine vision hardware and image processing software. www.peaktech.com

• Veritas Capital offered to buy BlackBerry (NYSE: BB), per Reuters. https://axios.link/47QST43

• WestView Capital Partners invested in Hubstaff, a Fishers, Ind.-based provider of workforce management SaaS. www.hubstaff.com

Public Offerings

• Siam Cement, a listed Thai industrial conglomerate, is postponing a $2b domestic IPO of its chemicals unit. https://axios.link/44tcOTJ

Liquidity Events

• Wiz, a Palo Alto, Calif.-based cybersecurity startup valued by VCs at $10.3b, is considering a takeover bid for SentinelOne (NYSE: S), a Mountain View, Calif.-based cybersecurity company with nearly a $5b market cap, per Bloomberg. Wiz backers include Insight Partners and Sequoia Capital, while SentinelOne shareholders include Insight (11.86%) and Redpoint Ventures (5.98%). https://axios.link/45ro4Bu

🚑 Tower Capital Asia is seeking a buyer for Eu Yan Sang International, a Singaporean seller of traditional Chinese medicines, per Bloomberg. https://axios.link/45rTU10

More M&A

• BYD, a Shenzhen-listed automaker, agreed to buy the mobility business of St. Petersburg, Fla.-based Jabil (NYSE: JBL) for around $2.2b. https://axios.link/3OS0nLp

• Didi agreed to sell its electric vehicle development assets to Chinese EV maker Xpeng (HK: 9868) for $744m. https://axios.link/47NsZOH

🚑 The FTC suspended its legal challenge to Amgen's (Nasdaq: AMGN) $27.8b takeover offer for Horizon Therapeutics (Nasdaq: HZNP).

🚑 Gruppo San Donato of Italy agreed to buy a majority stake in American Heart of Poland, a Polish cardiovascular care company, for more than €500m. https://axios.link/3QXXSKq

• Pluralis boosted its stake in listed Polish newspaper publisher Gremi Media to 57% from 37%. https://axios.link/3Pf3iPJ

• Standard Chartered (LSE: STAN) agreed to sell its aviation finance leasing unit for $700m to Riyadh-based AviLease, owned by Saudi Arabia's Public Investment Fund. https://axios.link/45s7xNI

🚑 Theken, an Ohio-based medical implants maker, acquired VisionAir Solutions, a Cleveland Clinic spinout that makes 3D-printed airway stents. https://axios.link/3sxHaaA

Fundraising

🐘 Elephant Partners, a Boston-based VC firm, raised nearly $800m for its sixth fund, per an SEC filing.

• Geek Ventures, a New York-based firm focused on immigrant founders, raised $23m for its debut fund. https://axios.link/3QTDtGl

• FinTech Collective of New York is raising up to $300m for its sixth fund, per an SEC filing.

It's Personnel

• Anne Gifford joined IRL Ventures as an operating partner. She previously led product for Culdesac and, before that, was with Tusk Venture Partners. www.irlventures.com

Final Numbers

IPO performance chart
Source: Renaissance Capital. Data through Aug 25, 2023.

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