Axios Pro Rata

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June 16, 2021

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Top of the Morning

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Illustration: Sarah Grillo/Axios

Lordstown Motors is the quintessential business fiasco. Equal parts hubris, political pandering and regulatory failure.

Why it matters: There's no indication that anyone will learn their lesson, except perhaps for some random retail investors who didn't diversify.

Catch up: General Motors in early 2019 shut a manufacturing plant in Lordstown, Ohio, where around 4,500 workers had been making the Chevy Cruze. It soon sold the facility to an electric truck startup for around $16 million, with the newly named "Lordstown Motors" financing the purchase via a loan from GM.

  • Then-Vice President Mike Pence visited Lordstown Motors, calling it "one more example of a president who is committed to making manufacturing great again."
  • The company in 2020 went public via SPAC at a $1.6 billion valuation, despite having never made or sold one of its vehicles.
  • Short-seller Hindenberg Research pounced in March, arguing the company had faked its pre-order information. Lordstown Motors said the accusations were false.
  • Last week, Lordstown Motors said it doesn't have enough cash to begin production. Then, this week, it canned its CEO and CFO, after basically copping to what Hindenberg had claimed.
  • Then it reversed course, claiming it does have enough money to begin production this year. Lordstown stock is down more than 66% from February.
  • Axios' Joann Mueller reports: "Lordstown's chances of survival are slim, but President Rich Schmidt, a Toyota veteran who later worked for Tesla, knows that underdog feeling. His plan, outlined Tuesday: Pull out all the stops to launch production in September, then cross his fingers they can raise more capital before they're projected to go broke in May 2022."

Hubris: Lordstown Motors took "fake it 'till you make it" to absurd extremes, behaving as if it had the same capital base as its much better-funded rivals. There was an air of pomposity to it, as if it were iniquitous to question those who had come to save America's Rust Belt.

  • Special due diligence demerits for those who foisted Lordstown onto the public markets. That includes Goldman Sachs, which was exclusive financial adviser on the SPAC merger and placement agent on the PIPE.

Political pandering: Lordstown is to Trump what Solyndra was to Obama. Sure, there are differences: Solyndra received tons of federal loan guarantees. It also had a commercialized product. But both got on-site VP visits by administrations eager to push an economic narrative, despite giant holes in the story.

Regulatory oversight: Lordstown's public listing was enabled by a safe harbor rule that allows SPAC targets to make future projections that IPO issuers can't legally make. You can forgive the SEC for letting Lordstown through, as the SPAC boom was in its early innings, but not for its recent decision to keep that safe harbor open at least through the middle of next year.

The bottom line: When a story seems too good to be true, it usually is.


Animated gif of an internet router with a textbook cover on it

Illustration: Sarah Grillo/Axios

Platinum Equity agreed to acquire McGraw Hill, a New York-based educational content company, from Apollo Global Management for $4.5 billion.

  • Why it's the BFD: McGraw Hill is America's third-largest textbook publisher, making it one of the most powerful forces (and cost drivers) in U.S. education. Last year it tried to merge with rival Cengage, but was blocked by antitrust regulators over divestiture disagreements.
  • ROI: Apollo, alongside ATP Equity Partners and Rethink Capital Partners, paid $2.5 billion in 2012 for what was then known as McGraw Hill Education.
  • The bottom line: "Over the last eight years, McGraw Hill has, like most former textbook publishers, continued to morph into an educational content and software company, with increasing proportions of its revenue coming from digital products." — Doug Lederman, Inside Higher Ed

Venture Capital Deals

Waymo, a developer of self-driving car, raised $2.5 billion in new funding. Tiger Global was joined by insiders Alphabet, Andreessen Horowitz, AutoNation, CPP Investment Board, Fidelity, Magna International, Mubadala Investment Co., Perry Creek Capital, Silver Lake, T. Rowe Price Associates and Temasek.

BrowserStack, a software testing platform, raised $200 million in Series B funding at a $4 billion valuation. Bond led, and was joined by Insight Partners and insider Accel.

10x Future Technologies, a London-based provider of fintech services to established banks, raised $187 million in Series C funding at around a $700 million valuation. BlackRock and CPP Investments co-led, and were joined by JPMorgan Chase, Nationwide, Ping An and Westpac.

IRL, a San Francisco-based social calendar app, raised $170 million in Series C funding. SoftBank Vision Fund 2 led, and was joined by Dragoneer and insiders Goodwater Capital, Founders Fund and Floodgate.

PayCargo, a Coral Gables, Fla.-based freight payment platform, raised $125 million in Series B funding from Insight Partners.

Greenlight Guru, an Indianapolis-based provider of quality management software for the medical device success market, raised over $120 million from JMI Equity.

Uberall, a Berlin-based "near me" marketing SaaS provider, raised $115 million co-led by Bregal Milestone, Level Equity and United Internet.

Bringg, a Chicago-based delivery and fulfillment cloud platform, raised $100 million in Series E funding. Insight Partners led, and was joined by Cambridge Capital, GLP, Harlap, Next 47, Pereg Ventures, Salesforce Ventures and Viola Growth.

Introhive, a Canadian sales and revenue acceleration platform, raised US$100 million in Series C funding. PSG led, and was joined by BDC, Aegis Group Partners, Evergreen Coast Capital and Mavan Capital Partners.

Mnemo Therapeutics, a Paris-based biotech focused on improving CAR-T therapies, raised €75 million in Series A funding co-led by Casdin Capital, insider Sofinnova Partners and an undisclosed investor. Other backers include Redmile Group, Emerson Collective and Alexandria Venture Investments.

Apna, an Indian upskilling platform, raised $70 million in Series B funding at a $570 million valuation. Insight Partners and Tiger Global co-led, and were joined by insiders Lightspeed India, Sequoia Capital India, Greenoaks Capital and Rocketship VC.

Templafy, a Danish business document creation SaaS provider, raised $60 million in Series D funding. Blue Cloud Ventures led, and was joined by insiders Insight Partners, Seed Capital, Dawn Capital and Damgaard.

Gloat, a New York-based talent marketplace, raised $57 million in Series C funding. Accel led, and was joined by Eight Roads, Intel Capital, Magma Venture Partners and PICO Partners.

Novo, a Miami-based small business banking platform, raised $40.7 million in Series A funding. Valar Ventures led, and was joined by Crosslink Capital, Rainfall Ventures, Red Sea Ventures and BoxGroup.

R-Zero, a San Francisco-based maker of UV disinfecting machines for commercial and institutional customers, raised $41.5 million. World Innovation Lab led, and was joined by DBL Partners.

Lingokids, a Wilmington, Del.-based early learning platform, raised $40 million in Series C funding from backers like GP Bullhound, HV Capital and Ravensburger.

FamPay, an Indian neobank for teens, raised $38 million in Series A funding. Elevation Capital led, and was joined by General Catalyst, Rocketship VC, Greenoaks Capital and existing investors Sequoia Capital India, YC, Global Founders Capital and Venture Highway.

Nate, a New York-based shopping app, raised $38 million in Series A funding. Renegade Partners led, and was joined by Forerunner Ventures and insiders Coatue and Canaan Partners.

🚑 Stork Club, a San Francisco-based maternity care platform, raised $30 million in Series A funding. General Catalyst led, and was joined by insiders like Bowery Capital and Slow Ventures.

Elisity, a Milpitas, Calif.-based enterprise edge security platform, raised $26 million in Series A funding. Two Bear Capital and AllegisCyber Capital co-led, and were joined by Panaseer and insider Atlantic Bridge.

Wristcam, a maker of Apple Watch accessories, raised $25 million led by Marker.

📚 BookClub, an Alpine, Utah-based platform for author-led book clubs, raised $20 million in Series A funding. Signal Peak Ventures led, and was joined by GSV Ventures, Maveron, Backstage Capital​ and Pelion Venture Partners​.

MachineMetrics, a Northampton, Mass.-based autonomous machining startup, raised $20 million in Series B funding. Teradyne led, and was joined by Ridgeline Ventures and insiders Tola Capital and Hyperplane.

Skywatch, an Earth observation data platform, raised $17.2 million in Series B funding. Drive Capital led, and was joined by insiders Bullpen Capital, Space Capital, Golden Ventures and BDC Ventures.

Dusty Robotics, a Mountain View, Calif.-based construction robotics startup, raised $16.5 million in Series A funding. Canaan Partners led, and was joined by NextGen Venture Partners, Baseline Ventures, Root Ventures and Cantos Ventures.

Sense, a San Francisco-based recruiting platform, raised $16 million in Series C funding. Avataar Venture Partners was joined by insiders Accel and GV.

Scythe Robotics, a Boulder, Colo.-based robotic landscaping company, raised $13.8 million in Series A funding. Inspired Capital led, and was joined by True Ventures, Zigg Capital and Lemnos., a San Francisco-based time series database, raised $10 million from insiders Draper Esprit, VITO Ventures and Flatz & Partners.

Serena Kids, an Austin, Texas-based baby food brand, raised $7 million in Series A funding. CircleUp Growth Partners led, and was joined by Wild Ventures.

🚑 Kindra, a Los Angeles-based wellness brand for menopause, raised $4.5 million in seed funding. Female Founders Fund led, and was joined by Primetime Partners, Anne and Susan Wojcicki, Katie Couric Media, The Community Fund and H Ventures.

MyYogaTeacher, an on-demand yoga platform, raised $3 million in seed funding. TSVC led, and was joined by Leonis Partners, Weekend Fund, All Access Fund and Bertelsmann Digital Media Investments.

The Mentor Method, an Austin, Texas-based workplace inclusion and equity startup, raised $1.4 million in seed funding led by Draper Associates.

Private Equity Deals

The Blackstone Group is in talks to buy Chinese office developer Soho China (HK: 00410) for around $3 billion.

EQT offered to buy listed Spanish solar company Solarpack for around €881 million, or €26.50 per share.

🚑 Harvest Partners agreed to buy Affordable Care, a Morrisville, N.C.-based dental organization focused on tooth replacement, from Berkshire Partners for $2.7 billion, per PE Hub.

🚑 Mubadala Investment Co. agreed to buy a 60% stake in UEMedical, an operator of medical facilities in UAE and Saudi Arabia.

🚑 Novo Holdings acquired BBI Group, a British provider of immunoassay and diagnostic products, for over £400 million from Exponent PE.

🚑 PAI Partners is in talks to buy SGD Pharma, a French provider of COVID-19 vaccine vials, per Reuters.

Public Offerings

Azelis, a Belgian specialty chemicals and food ingredients company owned by EQT, is in talks to file for an IPO that could value the company at around €5 billion, per Bloomberg.

🚑 Bright Health, a Minneapolis-based health insurer, set IPO terms to 60 million shares at $20-$23. It would have a $15.4 billion fully diluted value, were it to price in the middle, plans to list on the NYSE (BGH) and reports a $248 million net loss for 2020 on $1.2 billion in revenue. Bright Health raised over $1.5 billion in VC funding from firms like NEA, Bessemer Venture Partners, Greenspring Associates, The Blackstone Group, Cross Creek Advisors, Declaration Partners, Flare Capital Partners, Meritech Capital, Redpoint Ventures and Town Hall Ventures.

🚑 Doximity, a San Francisco-based professional network for physicians, set IPO terms to 23.3 million shares at $20-$23. It would have a $4.5 billion fully diluted valuation, were it to price in the middle, and plans to list on the NYSE (DOCS). The company raised around $80 million from firms like Emergence Capital Partners (15.1% pre-IPO stake), InterWest Partners (13.4%) and Morgenthaler Venture Partners (10.7%).

Full Truck Alliance, a Chinese platform that connects shippers and truckers, set IPO terms to 82.5 million shares at $17-$19. It would have a $19.7 billion fully diluted valuation, were it to price in the middle, and said Invesco and insider Fidelity agreed to buy another $600 million of stock in a concurrent offering. The company plans to list on the NYSE (YMM), reports a $25 million profit on $396 million in revenue for 2020 and raised $3.6 billion from firms like SoftBank Vision Fund (22.2% pre-IPO stake) and Sequoia Capital China (7.2%).

SPAC Stuff

QualTek, a Blue Bell, Penn.-based 5G wireless and wireline telecom services company owned by Brightstar Capital Partners, agreed to go public at an implied $829 million valuation via Roth CH Acquisition III (Nasdaq: ROCR).

Perimeter Solutions, a Clayton, Mo.-based maker of firefighting products owned by SK Capital Partners, agreed to go public at a $2 billion implied valuation via EverArc (LSE: EVRA).\

Solid Power, a Louisville, Colo.-based maker of all solid-state batteries, agreed to go public at an implied $1.2 billion value via Decarbonization Plus Acquisition Corp III (Nasdaq: DCRC). Solid Power raised over $160 million from firms like Ford, BMW, Hyundai, Samsung and Sahnoh Industrial.

JATT Acquisition, a life sciences tech SPAC, filed for a $120 million IPO.

🚑 Nova Vision Acquisition, an Asia SPAC led by Eric Wong (Third Generation Capital), filed for a $50 million IPO.

Rice Acquisition II, an energy transition SPAC, raised $300 million in its IPO.

More M&A

D.A. Davidson bought Marlin & Associates, a boutique investment bank focused on the fintech, data and analytics industries.

eBay (Nasdaq: EBAY) agreed to sell its South Korean business to listed retailer Shinsegae Group and listed online portal Naver for around $3.6 billion.

Hopin, a London-based virtual events platform, acquired Boomset, a New York-based provider of onsite event solutions. Hopin was valued earlier this year at $6.5 billion in a Series C round co-led by Andreessen Horowitz, General Catalyst and insider IVP.


20VC, a London-based VC firm led by Harry Stebbings, raised $33 million for a new early-stage fund and $107 million for a growth-stage fund.

G2 Venture Partners, a VC firm focused on transformation of traditional industries, raised $500 million for its second fund.

• LGT Capital Partners raised $4.5 billion for its fifth private equity secondaries fund.

Princeton Equity Group, a private equity firm focused on franchisor and multi-unit companies, raised $350 million for its debut fund.

• Social Leverage Capital raised $99 million for its fourth seed-stage fund.

• Topspin Consumer Partners raised $205 million for its second private equity fund.

VC Fuel, an energy transition-focused investment firm led by Morgan Stanley vet Ahmad Atwan, is raising $100 million for its debut VC fund and $500 million for an infrastructure fund, per Bloomberg.

It's Personnel

• David DiPietro joined T. Rowe Price as head of private equity, per his LinkedIn. He previously spent seven years with Greenspring Associates.

🚑 Stephen Hahn, former FDA commissioner, joined Flagship Pioneering as a member of its senior leadership team. Flagship is the VC firm that founded Moderna, whose COVID-19 vaccine received an emergency use authorization from Hahn's FDA.

Tom Arnost joined Verizon Ventures as a principal. He previously was in Verizon’s corp dev department.

Final Numbers

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