Jan 24, 2019

Axios Pro Rata

By Dan Primack
Dan Primack
Top of the Morning

Illustration: Aïda Amer/Axios

We are now on Day 34 of the partial government shutdown, with no end in sight. Some updates:

Australian packaging company Amcor says it must delay the close of its $5.25 billion purchase of Wisconsin-based rival Bemis, as the shutdown has prevented it from receiving U.S. antitrust approval of SEC clearance related to the Bemis shareholder meeting. This had been our BFD on August 6, 2018.

The traditional IPO market remains in limbo due to the SEC closure, creating headaches for companies like Uber and fun GIF opportunities for me. But there may be some exceptions:

  • The first is Gossamer Bio, a San Diego-based company that's raised around $230 million from VCs. Per Renaissance Capital: "Gossamer plans to rely on Section 8(a) of the Securities Act, which allows a company to file with a fixed price and have its IPO registration become effective 20 calendar days later. Therefore, the biotech is expected to price on February 12, and begin trading the next day."
  • This is a high-risk move, as Gossamer acknowledges, but another IPO hopeful called New Fortress Energy(backed by Fortress Investment Group) is expected to follow a similar path. Reuters also reports that several blank-check acquisition companies, or SPACs, plan to rely on the same loophole.

U.S. Commerce Sec. Wilbur Ross appeared on CNBC this morning, ostensibly to warn Americans that trade talks with China are going poorly. But he also got asked about furloughed federal workers who have been lining up at food banks, to which the billionaire said: "I know they are, and I don’t really quite understand why."

  • Hi Wilbur. Long time no speak. IT'S BECAUSE THEY CAN'T AFFORD TO BUY FOOD. Even if some can get stopgap loans from credit unions, it's unclear that will continue into a second month, and it doesn't apply to contractors who have no promises of being repaid. Didn't they teach any of this at Yale or HBS?

Try, try again: Josh and Jon Viner last year left Wag, the dog-walking startup they co-founded, just as the company secured $300 million from SoftBank Vision Fund. They claimed timing coincidence — saying it was they, not SoftBank, who recruited new CEO Hilary Schneider (ex-LifeLock, Yahoo) — and that they had formed a new VC fund focused on consumer startups.

  • Fast forward one year, and the Viners have already quit the VC biz to launch a bike-sharing startup called Wheels, which today announced $37 million in funding from firms like Bullpen Capital and Tenaya Capital.
  • Josh Viner to TechCrunch: We started our fund, exclusively with our own capital. Wheels quickly became a massive opportunity, and we’re now entirely focused on this business. We still invest passively when great opportunities present themselves.”

Today in Theranos: Silicon Valley's most infamous biotech is the focus of our latest Pro Rata podcast. My guest is Rebecca Jarvis of ABC News, who hosts a new docu-series on Theranos, which includes never-before seen or heard depositions of Elizabeth Holmes and Sunny Balwani. Listen here.

The BFD
Source: Giphy

BridgeBio Pharma, a Palo Alto-based drug company focused on genetic diseases, raised $299 million in new funding. KKR and Viking Global co-led, and were joined by fellow return backers Perceptive Advisors, AIG, Aisling Capital, Cormorant Capital and Hercules Capital. New investor Sequoia Capital also participated.

  • Why it's the BFD: Because its primary product is other biotech companies, using a "hub-and-spoke" model that already has formed such subsidiaries as Eidos Therapeutics (IPO'd last year), QED Therapeutics (launched with $65m in funding to develop a Novartis drug) and PellePharma (signed $70m deal with LEO Pharma that could be worth another $700m).
  • Bottom line: "BridgeBio searches for promising drug research at universities, academic medical centers, and drug companies. After acquiring rights to a compound, BridgeBio forms a subsidiary company to develop it... these subsidiaries develop their respective drug candidates while sharing resources of the parent." — Frank Vinluan, Xconomy
Venture Capital Deals

🚑 BridgeBio Pharma, a Palo Alto-based drug company focused on genetic diseases, raised $299 million. KKR and Viking Global co-led, and were joined by fellow return backers Perceptive Advisors, AIG, Aisling Capital, Cormorant Capital and Hercules Capital. New investor Sequoia Capital also participated. http://axios.link/k8Qf

AInnovation, a Beijing-based B2B commercialization platform for AI, raised around $60 million in Series A funding. CICC Alpha led, and was joined by Sinovation Ventures and Chengwei Capital. http://axios.link/c7dw

GeoPhy, a Dutch real estate valuation platform, raised $33 million in Series B funding. Index Ventures led, and was joined by return backers Inkef Capital and Hearst Ventures. www.geophy.com

Credit Culture, a Singapore-based digital lending startup, raised $29.5 million in structured equity funding from Malaysia’s RCE Capital Berhad. http://axios.link/dAQO

🚑 Attune Pharmaceuticals, a New York-based developer of orally-administered drugs for rare diseases like hereditary angioedema, raised $23 million in Series B funding. Venrock led, and was joined by LifeSci Venture Partners and return backers RTW Investments, RA Capital, Boxer Capital and Tang Capital. http://axios.link/bZOT

Sherpa.ai, a Spanish voice assistant startup, raised $7.5 million in Series A funding from Mundi Ventures and British Airways CEO Alex Cruz. http://axios.link/9LmP

🚑 Modulated Imaging, an Irvine, Calif.-based provider of optical imaging solutions for assessing tissue health, raised $7 million in Series B funding. Pangaea Ventures led, and was joined by Fresenius Medical Care Ventures, Grey Sky Venture Partners, Mitsubishi UFJ Capital Co. and Fouse KK. www.modulatedimaging.com

Teach on Mars, a France-based mobile platform for professional learning, raised €7 million in third-round funding co-led by Omnes and Région Sud Investissement. http://axios.link/0nKh

ThingTech, an Atlanta-based industrial IoT platform, raised $4 million in Series A funding. BIP Capital led, and was joined by Engage Ventures. www.thingtech.com

Allvision, a Pittsburgh-based geospatial analytics startup, raised $3.2 million in seed funding led by Lavrock Ventures. www.allvision.io

PowerShare, a Chinese electric vehicle charging startup, raised an undisclosed amount of funding from BP (LSE: BP). http://axios.link/jDUG

Private Equity Deals

🚑 Pritzker Private Capital acquired KabaFusion, a Cerritos, Calif.-based provider of acute and specialty home infusion services, from Brown Brothers Harriman Capital Partners. www.kabafusion.com

Vistex, a Chicago-based provider of go-to-market software, raised up to $105 million in minority equity funding from Accel-KKR ($65m upfront). www.vistex.com

Wind Point Partners agreed to buy and merger Clock Spring Co. (Houston) and Neptune Research (Florida), both providers of repair and rehabilitation products for critical infrastructure. www.cs-nri.com

Public Offerings
Source: Giphy

Easyhome, a Chinese home improvement chain backed by Alibaba, will list its new retail arm on the Shenzhen bourse via a $5.65 billion reverse merger. http://axios.link/dPV9

Liquidity Events

Cision (NYSE: CISN) agreed to buy Austin, Texas-based PR analytics startup TrendKite for $225 million. TrendKite had raised around $50 million from firms like Harmony Partners, Mercury Fund, Adams Street Partners, Battery Ventures and Noro-Moseley Partners. http://axios.link/wjeP

More M&A

Bombardier (TSX: BBD) agreed to buy a wing manufacturing unit of Triumph Group (NYSE: TGI). http://axios.link/oe3Q

Hydro One (TSX: H) called off its $5.3 billion purchase of Avista Corp. (NYSE: AVA), a Spokane, Wash.-based electric and natural gas utility, after failing to gain Washington State regulatory approval. http://axios.link/rxzo

Fundraising

Owl Ventures, a VC firm focused on ed-tech companies, raised $315 million for its third fund. www.owlvc.com

Sequoia India is launching a startup accelerator program focused on India and Southeast Asia. It’s called Surge. http://axios.link/Utm0

It's Personnel

Bank of America named Mike Joo as chief operating officer of its corporate and investment bank, once David Glaser retires in March, per Reuters. Joo currently runs the bank’s global rates and currencies origination business. http://axios.link/kAWe

• Alejandro Capote joined Lazard as head of its Mexico financial advisory unit. He previously focused on private equity investments for Credit Suisse Asset Management. www.lazard.com

Final Numbers
Source: Renaissance Capital
Dan Primack