It used to be almost impossible to raise venture capital for a "vice" product, due to specific restrictions in limited partnership agreements. And many of those anti-vice clauses persist, even with the mainstreaming of cannabis.
Now there's an entire fund devoted to the cause, Axios' Kia Kokalitcheva reports:
Dockery also told Kia a few other niche areas of interest:
Dockery's big pitch is that the relative lack of competition — and of federal legalization, in the case of cannabis — means that many of the valuations are artificially depressed.
The fund already has invested in a handful of startups, including Recess (CBD-infused drink), Indose (cannabis vaporizer), and Bev (canned rosé wine).
• Consolidation canary: Will Roper, head of tech and acquisition for the U.S. Air Force, yesterday said that defense sector mergers have become a national security concern.
• The morning's largest deal, by dollars, is a $7.5 billion take-private buyout of Merlin Entertainment (LSE: MERL), owner and operator of Madame Tussauds and Legoland. The buyers are Lego's founding family, The Blackstone Group and CPPIB.
• June farewell: Global private equity deal volume for the first half of 2019 was up 5% in terms of dollars and down 19% in terms of number of transactions, per preliminary Refinitiv data. Global M&A is down 13% and 18%, respectively.
🎧 Podcast: Our new episode focuses on cryptocurrencies, and includes my interview of Stephen Moore about a "decentralized central bank" startup he joined after that Fed nomination thing didn't work out. Listen here.
Commonwealth Fusion Systems, a Cambridge, Mass.-based startup focused on commercializing fusion energy, raised $115 million in Series A funding.
• TripActions, a Palo Alto-based corporate travel booking platform, raised $250 million in Series D funding at a $4 billion valuation from Andreessen Horowitz, Zeev Ventures, Lightspeed Venture Partners and Group 11. http://axios.link/6og2
• Fungible, a Santa Clara, Calif.-based provider of software solutions to cloud data centers, raised $200 million in Series C funding. SoftBank Vision Fund led, and was joined by Norwest Venture Partners and return backers Battery Ventures, Mayfield Fund, Redline Capital and Walden Riverwood Ventures. http://axios.link/hNb7
🚑 Surterra Wellness, an Atlanta-based medical cannabis company, raised $100 million in Series D funding from backers like the family office of Patrón Spirits CEO Ed Brown. http://axios.link/5kVS
• Restaurant365, an Irvine, Calif.-based provider of restaurant accounting software, raised $88 million in Series C funding. Iconiq Capital led, and was joined by Tiger Global Management and Bessemer Venture Partner. http://axios.link/8qJ8
• Degreed, a San Francisco-based workforce learning platform, raised $35 million in equity funding from AllianceBernstein and return backers Owl Ventures, Jump Capital, Signal Peak Ventures and GSV Accelerate. It also secured a $40 million debt facility from AllianceBernstein. http://axios.link/DkP6
• Ornikar, a French online marketplace for driving instruction, raised €35 million in Series B funding from Idinvest and Bpifrance. http://axios.link/76Qr
• Superhuman, a subscription-based email management startup, raised $33 million in Series B funding at a $260 million valuation led by Andreessen Horowitz. http://axios.link/TnZr
🚑 Ultivue, a Cambridge, Mass.-based developer of tissue biomarker identification and quantification assays, raised $22 million in Series C funding. Northpond Ventures led, and was joined by ARCH Venture Partners, 6 Dimensions Capital, Yonghua Capital and Applied Ventures. http://axios.link/nQTn
• Wondery, a Los Angeles-based podcast publisher, raised $10 million in Series B funding. Waverley Capital led, and was joined by Powerhouse Ventures and return backers Lerer Hippeau, Greycroft, BDMI, Advancit and Water Tower Ventures. http://axios.link/rs5T
• SV Academy, an online tech skills education and job placement platform, raised $9.5 million in Series A funding led by Owl Ventures. http://axios.link/pxmO
• Opendorse, a Lincoln, Neb.-based athlete marketing platform, raised $3.1 million co-led by Serra Ventures and Flyover Capital. http://axios.link/0X5q
• Equistone entered exclusive talks to buy Sateco, a French maker of metal formwork equipment for concrete forming and safety platforms on construction sites, from Naxicap Partners. www.sateco.fr
🚑 KPS Capital Partners completed its $490 million acquisition of Life Fitness, a Rosemont, Ill.-based maker of commercial fitness equipment and game tables, from Brunswick Corp. (NYSE: BC). www.lifefitness.com
• Lightyear Capital and Ontario Teachers’ confirmed reports that they will buy Lendmark Financial Services, a Lawrenceville, Ga.-based consumer finance company, from The Blackstone Group. No financial terms were disclosed, but Reuters previously put the price at around $600 million (excluding debt). http://axios.link/pxmO
• Starwood Capital has expressed takeover interest in London-based real estate developer Helical (LSE: HLCL), which has a market cap of £437 million, per Bloomberg. http://axios.link/gkw6
• Belle International, a Chinese women’s shoe retailer taken private in 2017 by Hillhouse Capital, filed to raise upwards of $1 billion in a Hong Kong IPO for its sportswear distribution unit. http://axios.link/ATLY
🚑 Health Catalyst, a Salt Lak City-based provider of healthcare data warehousing and analytics, filed for a $100 million IPO. It plans to trade on the Nasdaq (HCAT) with Goldman Sachs as lead underwriter, and reports a $62 million net loss on $112 million in revenue for 2018. The company has raised nearly $400 million from firms like Sequoia Capital (21.9% pre-IPO stake), Norwest Venture Partners (21%) and UPMC (6.3%). http://axios.link/s02f
• The RealReal, a San Francisco-based luxury consignment marketplace, raised $300 million in its IPO. The company priced 15 million shares at $20 (above $17-$19 range), for an initial market cap of $1.65 billion. It will list on the Nasdaq (REAL) with Credit Suisse as lead underwriter, and reports a $76 million net loss on $207 million in revenue for 2018. The company raised over $330 million, most recently at a post-money valuation just over $1 billion, from firms like Great Hill Partners (14.7% pre-IPO stake), Canaan Partners (13%), PWP Growth Equity (11%), InterWest Partners (9.9%), Greycroft (9%), E.ventures (8.1%) and Greenspring Associates (7.4%).
⛽ Sunnova Energy International, a Houston-based provider of residential solar energy solutions, filed for a $100 million IPO. It plans to trade on the NYE (NOVA) with BAML as lead underwriter, and reports a $68 million net loss on $104 million in revenue for 2018. Shareholders include Energy Capital Partners and Quantum Strategic Partners. http://axios.link/FAFT
• Apple (Nasdaq: AAPL) will invest $100 million into smartphone screen maker Japan Display (Tokyo: 6740) as part of a $500 million bailout led by China’s Harvest Group. http://axios.link/byln
• French Connection (LSE: FCCN), a clothing retailer, has extended its sale process deadline into mid-September. http://axios.link/wubE
• Howard Hughes (NYSE: HHC) shares spiked after the Dallas-based real estate developer said it hired Centerview Partners to explore strategic alternatives. http://axios.link/HSwC
• Temasek will pay $300 million for a 21.7% stake in the logistics unit of Li & Fung (HK: 0494), thus postponing a planned spinoff IPO. http://axios.link/AvAr
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