Dec 19, 2018

Axios Pro Rata

By Dan Primack
Dan Primack

Hello, readers! As Dan mentioned yesterday, he's off to a family vacation in Florida, so I'll be your cruise director for the rest of the week. As always, feel free to reach me at kia@axios.com for any tips, scoops, thoughts, ideas.

Top of the Morning

Illustration: Axios/Lazaro Gamio

Venture capital has certainly fueled some truly impactful companies over the years (Apple and Google, for instance) — but what if it's not the right funding mechanism for all companies?

Clearbanc, a San Francisco- and Toronto-based startup, just raised a fresh $50 million (in addition to $70 million it raised last month) to be an alternative to equity investing for certain companies, mostly e-commerce businesses. The idea is that these companies shouldn't be giving up precious equity just to fund their proven customer acquisition activities.

  • How it works: After Clearbanc's proprietary tools analyze a company's internal data, such as its Stripe transactions and Facebook advertising campaigns, Clearbanc disburses funds to the company, which then has to repay it back, plus about a 6% fee.
  • "Equity is ultimately risk capital" that should be used to research and develop new tech or businesses, Clearbanc co-founder and CEO Andrew D'Souza told me. And for e-commerce businesses that won't ever provide the type of returns that VCs expect, it's better they keep their equity and build their businesses.
  • Emergence Capital partner Santiago Subotovsky, who led the firm's investment in Clearbanc and sits on its board, agrees, which is why he doesn't see this as being competitive with his own industry.
  • On the other hand, Hustle Fund partner Elizabeth Yin wonders if eventually it'll mean that such alternatives will lead to adverse selection — early companies still searching for a business model or marketing strategy will be the ones asking for VC investments while their peers with cashflow avoid it.
  • This year, Clearbanc has doled out more than $100 million to over 500 companies, D'Souza says. Most of the funding it's raised went into two funds it manages to finance its customers, and a small portion has been invested into its own operations.

• SoftBank IP-no: SoftBank's mobile unit had the second largest IPO (after Alibaba's in 2014), but closed 15% below its initial offering price on its first day of trading in Tokyo on Wednesday.

• More PE PR: Gordon Goldstein, who's headed Silver Lake's external affairs since 2010, is leaving the firm at the end of the month, Axios has learned.

  • He plans to focus on his work as Senior Fellow at the Council on Foreign Relations, a new book and possibly even podcasting, we are hearing.

🎧 Podcast: CBS' Les Moonves is the subject of our latest Pro Rata podcast. CBS finally decided to deny him his $120 million golden parachute because of multiple allegations of sexual harassment. Listen here.

The BFD

Photo: Sven Hoppe/picture alliance via Getty Images

GlaxoSmithKline and Pfizer are combining their consumer health care businesses into a joint venture with sales of 9.8 billion pounds ($12.7 billion) for 2017. GlaxoSmithKline will own a 68% of the venture, and Pfizer will own the rest.

  • Why it's the BFD: It's a great deal for both companies: Glaxo's shareholders have been calling for the company to break up its divisions, while Pfizer recently failed to sell its consumer health care group.
  • The bottom line: "It will lead to the creation of a consumer health giant with a market share of 7.3 percent, well ahead of its nearest rivals Johnson & Johnson, Bayer and Sanofi, all on around 4 percent." — Ben Hirschler, Reuters
Venture Capital Deals

• BYJU’S, an India-based K-12 learning app developer, has raised $540 million in new funding led by Naspers Ventures, with the Canadian Pension Plan Investment Board (CPPIB) also participating. www.byjus.com

🚀SpaceX, Elon Musk's Hawthorne, California-based private space exploration company, is raising $500 million in new funding from Baillie Gifford and existing investors at a $30.5 billion valuation, according to the Wall Street Journal. http://axios.link/12K7

• Cambridge Mobile Telematics, a Cambridge, Massachusetts-based mobile telematics and analytics provider, has raised $500 million in new funding from SoftBank Vision Fund. www.cmtelematics.com

• Zwift, a Long Beach, California-based multiplayer online training and racing platform for cyclists and runners, has raised $120 million in funding led by Highland Europe. http://axios.link/xREo

• The Wing, a New York-based network of co-working offices for women, has raised $75 million in Series C funding led by Sequoia Capital, with Upfront Ventures, Airbnb, NEA, WeWork and individuals also participating. http://axios.link/nGhx

🚑 Entrada Therapeutics, a Boston-based biotechnology company, has raised $59 million in Series A financing led by 5AM Ventures and MPM Capital, with Roche Venture Fund, MRL Ventures Fund and Agent Capital also participating. http://axios.link/KH8X

🚑 Erasca, a San Diego-based creator of oncology drugs, has raised $42 million in Series A financing led by City Hill Ventures and Cormorant Asset Management. http://axios.link/oGII

• Rothy's, a San Francisco-based maker of women's shoes, has raised $35 million from Goldman Sachs. http://axios.link/8GiM

• Bellhops, a Chattanooga, Tennessee-based moving service, has raised $31.4 million in Series C funding led by Advance Venture Partners led the round, with Canaan, Initialized Capital, Lerer Hippeau Ventures and Nashville Capital Network also participating. http://axios.link/aVc6

• Price f(x), a Munich-based startup that offers cloud-based pricing software, has raised €25 million ($28.5 million) in Series B funding led by Digital + Partners and Bain & Company, with Credo Ventures and Talis Capital also participating. http://axios.link/cTGN

🤖 Temi, a New York-based maker of a personal robot, has raised $21 million in new funding led by ex-Alibaba CTO John Wu, with Generali Investments S.p.A and Ogawa also participating. www.robotemi.com

• Securly, a San Jose, California-based maker of software for kids’ online safety, has raised $16 million of Series B funding led by Defy Partners, with participation from Owl Ventures. http://axios.link/HAML

🚑 Aristea Therapeutics, a San Diego-based drug developer, has secured $15 million in Series A funding from Novo Holdings A/S. http://axios.link/R5BO

• Import.io, a Los Gatos, California-based provider of web data integration tools, has raised $15.5 million in Series B funding led by Talis Capital, with IP Group, OpenOcean, Oxford Capital and Wellington Partners also participating. www.import.io

🚑 Tridiuum, a Philadelphia-based digital health company, has raised $9.5 million in Series B funding led by Sopris Capital, with Fresenius Medical Care Ventures, Ben Franklin Technology Partners of Southeastern Pennsylvania and Martinson Ventures also participating. http://axios.link/J2WH

🤖 Formant, a San Francisco-based maker of robot data management software, has raised $6 million in seed funding from SignalFire. http://axios.link/Vmz1

• ExecVision, an Arlington, Virginia-based maker of customer conversation management software, has raised $5.4 million in funding led by Edison Partners, with existing investors also participating. www.execvision.io

• AvantStay, a Los Angeles-based service for booking group travel, has raised $5 million in new funding led by Bullpen Capital, with F-Prime Capital, Zeno Ventures, and Convivialité Ventures, Abstract Ventures and Presidio Bay Ventures also participating. avantstay.com

• Morressier, a Berlin-based research discovery platform, has raised $4.5 million in funding led by Cherry Ventures. http://axios.link/XJ2q

🤖 Elementary Robotics, a Pasadena, California-based robotics company, has raised $3.6 million in new funding led by Fika Ventures and Fathom Capital, with Toyota AI Ventures, Ubiquity Ventures, Riot.vc, Osage University Partners, and Stage Venture Partners also participating. http://axios.link/dDMd

• Nomics, a Boston- and Minneapolis-based cryptocurrency data company, has raised $3 million in Series A funding led by Arthur Ventures. http://axios.link/sXkf

• Cybeats, a Toronto-based cybersecurity company, has raised $3 million in funding led by Ripple Ventures, with GreenSoil Building Innovation Fund, MaRS IAF, MLA48, ScaleX and Inovia Capital also participating. www.cybeats.com

• Blade, a Mountain View, California-based cloud-based gaming company, has raised an undisclosed amount of funding from Charter Communications. http://axios.link/ZsdH

Private Equity Deals

• DataCamp, a New York-based maker of software to learn data analytics, has raised new funding led by Spectrum Equity, with Accomplice and Arthur Partners also participating. http://axios.link/wPPe

🚑 Pike Street Capital has acquired US BioTek, a Shoreline, Washington-based Clinical Laboratory Improvement Amendments (CLIA) accredited testing facility that provides a variety of immunology and chemistry profiles to clinicians. http://axios.link/NPxP

• Pamplona Capital Management has acquired a controlling stake in Latham Pool Products, a Latham, New York-based maker of pool components and accessories, valuing the company at $375 million. Wynnchurch Capital, the seller, will retain a stake. lathampool.com

• Strattam Capital has made an majority investment in Acendre, a Australian-based maker of talent management software. www.acendre.com/

• Northleaf Capital Partners has made an investment in PPRO, a U.K.-based provider of cross-border e-payment software backed by HPE Growth Capital. www.ppro.com

🚙 Flash Equity has acquired The Drive, an automotive media company. www.thedrive.com

🚑 Madryn is investing $35 million via credit facility in Veran Medical Technologies, a St. Louis-based medical device company. www.veranmedical.com

Public Offerings

🚑General Electric has filed confidentially for an IPO of its health care unit, according to Bloomberg. It’s working with Goldman Sachs, Bank of America, Citigroup, JPMorgan and Morgan Stanley on the planned offering. http://axios.link/qciH

• Futu Securities International, a Hong Kong-based online brokerage firm backed by Tencent Holdings, has filed confidentially for an IPO in the U.S. of up to $500 million, according to Reuters. http://axios.link/xCJM

Liquidity Events

🚑 McKesson’s Change Healthcare has acquired intellectual property and other assets from PokitDok, a San Mateo, California-based maker of blockchain-based software for health care. http://axios.link/rXQ3

• Cisco is acquiring Luxtera, a Carlsbad, California-based semiconductor company, for $660 million in cash and assumed stock options. http://axios.link/DlU7

• Unilever has agreed to buy The Vegetarian Butcher, a Dutch producer of plant-based meat replacements. http://axios.link/f6uR

More M&A

• Civitas Solutions has entered into a definitive merger agreement to be acquired by Centerbridge Partners for $17.75 in cash per share, resulting in an enterprise value of approximately $1.4 billion. http://axios.link/56PO

• GreenOak Real Estate, backed by Tetragon Financial Group, is merging with Sun Life’s Bentall Kennedy, a North American real estate and property management firm, in a deal worth about $1 billion. The combined entity will be named Bentall GreenOak and will be part of Sun Life Investment Management. http://axios.link/xHAC

⛽️ Shell has agreed to acquire a 49% stake in Asia-focused firm Cleantech Solar. http://axios.link/dEnt

Fundraising

• Adams Street Partners has raised $824 million for its 2018 Global Fund. www.adamsstreetpartners.com

It's Personnel

• Pantheon has promoted principals Imogen Richards and Kevin Dunwoodie to partner, and named partner Robin Bailey as its new chief operating officer. www.pantheon.com

Final Numbers
Expand chart
Reproduced from Federal Reserve Bank of St. Louis; Note: Labor market tightness is the ratio of job vacancies to the level of unemployment. A number above 1 indicates a very tight labor market; Chart: Axios Visuals
Dan Primack