Apr 7, 2021

Axios Pro Rata

🎧 Axios Re:Cap spoke with Atlanta Mayor Keisha Lance Bottoms about the economic fallout of Georgia's new voting law, including the MLB All-Star Game. Listen via Apple or other pod platforms.

🖥️ You're invited: Axios hosts a virtual event on Asian American identity and politics this Thursday at 12:30pm ET, featuring activists Linh Nguyen, Amanda Nguyen and Michigan state Sen. Stephanie Chang. Register here.

Top of the Morning

Illustration: Aïda Amer/Axios

JPMorgan CEO Jamie Dimon today warned in his annual letter that the U.S. and European banking sectors are being surpassed in scale by shadow banks and fintech rivals.

Why it matters: Dimon, who has at least some pull in the Biden White House, is asking for a "level playing field." Or, put another way, a loosening of capital requirements on banks and/or greater regulatory oversight of fintech.

Context: Fintech, either broadly or narrowly defined, is booming.

  • Plaid, which connects fintech apps to bank accounts, this morning announced $425 million in Series D funding led by Altimeter at what Axios has learned was a $13.4 billion post-money valuation. You might recall that Plaid recently bailed on a deal to be bought by Visa, primarily because the $5.3 billion price-tag had become antiquated.
  • "Most consumers now believe that living their financial lives online is the new normal, and we've also seen another inflection point in the number of companies building digital-first financial products ... and the emergence of embedded finance like stored value and rewards and points," Plaid CEO Zach Perret explains.
  • Or, as Plaid investor Mary Meeker puts it: "A new era of finance is underway.”
  • If you combine Plaid's new valuation with the recent $95 billion mark for Stripe, it's just a hair below the market cap for Goldman Sachs. And all of this is the fintech appetizer for next week's Coinbase direct listing feast.

The bottom line: The financial sector has transformed dramatically in the decade since Dodd-Frank became law. New regulatory frameworks could be on the horizon.

The BFD

Illustration: Sarah Grillo/Axios

CVC Capital Partners has offered to buy Japanese conglomerate Toshiba Corp. (Tokyo: 6502) for around $20 billion.

  • Why it's the BFD: It could be the largest-ever leveraged buyout of an Asian company, topping Bain Capital's 2018 carve-out of a majority stake in Toshiba's flash memory unit (now known as Kioxia).
  • Market reax: Toshiba shares jumped more than 18% on the news, giving it a market cap of nearly $19 billion.
  • Timing is everything: Toshiba shareholders last month approved an independent investigation into allegations that it improperly pressured shareholders into voting with company management, and the CVC deal arguably could help take the pressure off CEO Nobuaki Kurumatani.
  • Bottom line: "Any approval by Toshiba's board will face regulatory review, because Toshiba, which makes products ranging from escalators to sewerage plants, is one of only a handful of companies able to build nuclear reactors and manufactures other sensitive equipment, including lithium-ion batteries for Japan's military submarines." — Makiko Yamazaki, Reuters
Venture Capital Deals

Trax, a Singapore-based computer vision company focused on retail goods, raised $640 million in primary and secondary Series E funding. SoftBank Vision Fund 2 and BlackRock co-led, and were joined by OMERS and Sony Innovation Fund. http://axios.link/1u7I

Patreon, a San Francisco-based platform that connects creators with paying fans, raised $155 million in Series F funding at a $4 billion valuation. Tiger Global led, and was joined by Woodline Partners and insiders Wellington Management, Lone Pine Capital, NEA, Glade Brook Capital and DFJ Growth. http://axios.link/ARqW

Phenom, an Ambler, Pa.-based talent experience platform, raised $100 million in Series D funding. B Capital Group led, and was joined by Dragoneer, OMERS and GoldenArc Capital. www.phenom.com

Groww, an Indian investment app, raised $83 million in Series D funding at a valuation north of $1 billion. Tiger Global led, and was joined by insiders Sequoia Capital India, Ribbit Capital, YC Continuity and Propel Venture Partners. http://axios.link/9XjU

WhiteSource, an Israeli provider of open source security and management software, raised $75 million in Series D funding. Pitango led, and was joined by insiders M12, Susquehanna Growth Equity and 83North. www.whitesourcesoftware.com

Bryter, a Berlin-based no-code development platform, raised $66 million in Series B funding. Tiger Global led, and was joined by insiders Accel, Dawn Capital, Notion Capital and Cavalry Ventures. http://axios.link/KbAZ

🚑 Nucleix, a liquid biopsy startup, raised $55 million. RA Capital Management led, and was joined by BlackRock, Lilly Asia Ventures, Lyfe Capital, MILFAM and insiders OrbiMed, Aurum Ventures, DSC Investment, OCI Bio Investments and Zohar Zisapel. www.nucleix.com

🚑 Pendulum Therapeutics, a San Francisco-based microbiome startup, raised $54 million. Meritech Capital Partners led, and was joined by insiders Sequoia Capital, True Ventures and Khosla Ventures. www.pendulumlife.com

🚑 Volastra, a New York-based biotech focused on metastatic cancer, expanded its seed round to $44 million. Vida Ventures and Catalio Capital Management joined existing backers Polaris Partners, Droia Ventures, Arch Venture Partners and Quark Venture. http://axios.link/e6dj

Blue dot, an Israel-based business tax accounting startup, raised $32 million. Ibex Investors led, and was joined by Lamaison Partners, Viola and Target Global. http://axios.link/k8Y1

Pathlight, a San Francisco-based remote management platform for customer-facing teams, raised $25 million. Insight Partners led, and was joined by Uncorrelated Ventures, Jeremy Stoppleman, David Glazer, Michael Ovitz and insiders Kleiner Perkins and Quiet Capital. www.pathlight.com

Pica8, a Palo Alto-based provider of open-networking software, raised over $20 million in Series C funding. WI Harper Group and Aspiro Capital Management co-led, and were joined by insider Vantage Point Ventures. http://axios.link/kcdZ

LineVision, a Somerville, Mass.-based provider of non-contact overhead power line sensors, raised $12.5 million in Series B funding. UP Partners led, and was joined by National Grid Partners and Zoma Capital. www.linevisioninc.com

Guardian Agriculture, a Boston-based provider of eVTOL-powered crop dusting, raised $10.5 million in seed funding. Leaps by Bayer led, and was joined by FMC Ventures, Cavallo Ventures, Fall Line Capital, E14 Fund, Pillar VC and Neoteny. http://axios.link/fSvW

Project Canary, a Denver-based provider of emissions monitoring and ESG data for the energy, manufacturing and waste management sectors, raised $10 million in Series A funding from Quantum Energy Partners, Global Reserve Group and Energy Impact Partners. http://axios.link/91OP

🚑 Real, a group therapy startup, raised $10 million in Series A funding led by Lightspeed Venture Partners. http://axios.link/aPuK

Mem, a note-taking app, raised $5.6 million in seed funding. Andreessen Horowitz led, and was joined by Dreamers.vc, Floodgate, Unusual Ventures and Shrug Capital. http://axios.link/wG3d

🎧 Clubhouse is in talks to raise new VC at around a $4 billion valuation, just months after the pre-revenue audio app secured a $1 billion valuation, per Bloomberg. http://axios.link/n3Te

Private Equity Deals

Alliance Technical Group, a Dallas-based portfolio company of Align Capital Partners, acquired Emission Monitoring Service, a Houston-based provider of leak detection and repair services. www.aggengr.com

Apollo Global Management has been shortlisted to lead around a $10 billion investment in Saudi Aramco’s oil pipelines, per Bloomberg. http://axios.link/eODq

Ascensus Specialties, a Bellevue, Wash.-based portfolio company of Wind Point Partners, acquired Strem Chemicals, a Newburyport, Mass.-based provider of high-purity chemicals. www.ascensusspecialties.com

Berkshire Partners agreed to buy Comlinkdata, a Boston-based provider of telecom data analytics, from Alpine Investors. www.comlinkdata.com

Len The Plumber, a Baltimore-based portfolio company of Thompson Street Capital Partners, acquired Neffsville, a Lancaster, Pa.-based residential plumbing and HVAC company. www.lentheplumber.com

Mainsail Partners sponsored a $45 million recap of portfolio company 3PL Central, an El Segundo, Calif.-based warehouse management software provider. www.3plcentral.com

🚑 Partners Group completed its purchase of Wedgewood Pharmacy, a Swedesboro, N.J.-based animal health compounding pharmacy, from New Harbor Capital. www.wedgewoodpharmacy.com

Pole Star, a London-based provider of compliance software for the maritime sector, secured growth capital from Wavecrest Growth Partners and Abry Partners. www.polestarglobal.com

Public Offerings

🚑 Agilon Health, a Long Beach, Calif.-based primary care platform owned by Clayton, Dubilier & Rice, set IPO terms to 46.6 million shares at $20-$23. It would have a fully diluted value of $9 billion, were it to price in the middle, and reports a $60 million net loss on $1.2 billion in revenue for 2020. http://axios.link/WSb2

• Applovin, a Palo Alto-based mobile games ad network backed by KKR, set IPO terms to 25 million shares at $75-$85. It would have a fully diluted value of $30.7 billion, were it to price in the middle, and reports a $126 million net loss on $1.45 billion in revenue for 2020. http://axios.link/ZfhJ

Bowman Consulting Group, a Reston, Va.-based provider of engineering-focused professional services, filed for a $46 million IPO. It plans to list on the Nasdaq (BWMN), and reports $1 million of net income for 2020 on $122 million in revenue. http://axios.link/4oSO

Karat Packaging, a Chino, Calif.-based maker of environmentally friendly single-use food packaging, set IPO terms to 4 million shares at $18-$20. It would have a fully diluted value of $368 million, were it to price in the middle, and reports $15 million of net income on $225 million in revenue for the first nine months of 2020. http://axios.link/Q1ml

PowerSchool, a Folsom, Calif.-based education software company owned by Onex and Vista Equity Partners, filed for an IPO that Renaissance Capital estimates could raise $750 million. It plans to list on the NYSE (PWSC) and reports a $47 million net loss for 2020 on $435 million in revenue. http://axios.link/EhQy

TuSimple, a San Diego-based self-driving truck startup, set IPO terms to 33.8 million shares at $35-$38. It would have a fully diluted value of $8.5 billion, were it to price in the middle, and reports a $178 million net loss for 2020. The company raised around $650 million from firms like Nvidia, VectoIQ, Goodyear, Union Pacific, CN Rail, U.S. Xpress, Kroger, Traton Group and Navistar. It also received a PPP loan. http://axios.link/7ZjY

SPAC Stuff

🚑 Better Therapeutics, a San Francisco-based provider of cognitive behavioral therapy to treat root causes of cardiometabolic diseases, agreed to go public at an implied $187 million valuation via Mountain Crest Acquisition Corp II (Nasdaq: MCAD). http://axios.link/N6ke

🚑 LumiraDx, a British point-of-care diagnostics company that recently filed for an IPO, agreed to go public at an implied $5 billion valuation via CA Healthcare Acquisition (Nasdaq: CAHC), a SPAC led by Larry Neiterman (ex-Deloitte). The company had raised $800 million from firms like Morningside Group, North Atlantic Capital and the Bill & Melinda Gates Foundation. http://axios.link/DoER

🚑 Innovatus Life Sciences Acquisition, a SPAC formed by Innovatus Capital, filed for a $175 million IPO. http://axios.link/Lskh

ION Acquisition 3, an Israeli tech SPAC formed by ION Asset Management, filed for a $250 million IPO. http://axios.link/PwL7

More M&A

Amundi (Paris: AMUN) is in exclusive talks to buy most of French asset manager Lyxor from Société Générale (P: GLE) for €825 million. http://axios.link/5Qnq

Genworth Financial (NYSE: GNW), a Virginia-based insurer, terminated its $2.7 billion buyout by China Oceanwide Holdings Group Co., as the deal has been stalled by regulators for more than three years. http://axios.link/QiO6

Norway’s sovereign wealth fund agreed to pay €1.38 billion for a 50% stake in a Danish wind farm from Osrsted AS. http://axios.link/lm0J

Fundraising

Peak Rock Capital, an Austin, Texas-based private equity firm, raised $2 billion for its third fund. www.peakrockcapital.com

It's Personnel

Andrew Fineberg joined SVB Leerink as a managing director and head of structured finance. He previously was with MTS Health Partners. www.svbleerink.com

David Gaito is joining Fidelity to lead a new direct lending business. He previously was with PNC Financial Services Group. www.fidelity.com

Matt Jones is leaving Pantheon to join TPG as co-head of global private equity secondaries, per Secondaries Investor. http://axios.link/Yynf

Ara Partners, a private equity firm focused on industrial decarbonization investments, hired Greg Zuboff (ex-WindSail Capital Group) as a VP and Abhiram Karuppur (ex-JPMC) as an associate. www.arapartners.com

Final Numbers
Source: PwC/CB Insights MoneyTree Report Q1 2021

Inside the numbers: Mega-rounds drove last quarter's U.S. VC activity, accounting for 64% of total funding. The number of mega-rounds rose from 102 in Q4 2020 to 184 in Q1 2021.

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