Oct 12, 2017

Axios Pro Rata

Top of the Morning

Facebook's Sheryl Sandberg sat down earlier this morning with Axios' Mike Allen for an interview that focused heavily on the company's response (and responsibility) when it comes to foreign powers using its platform to influence American elections. A few highlights:

  • "Things happened on our platform in this election that should not have happened."
  • Sandberg says she supports a House committee decision to release all of the Russia-financed ads that appeared during the election, including the posts the ads linked to and all underlying targeting data.
  • On the unpaid side, she says Facebook ultimately removed everything that was determined to have been created via fake accounts. Had they been created by real accounts — including by Russians — the posts would have remained up.
  • Sandberg kept punting on questions about possible overlap between Russian ad targeting and Trump campaign ad targeting.
  • Facebook will continue to accept payment in rubles, given that it is the currency of legitimate Russian businesses.
  • She argued that Facebook is not a media company, because it does not create the content.
  • Facebook would have run a controversial ad from Rep. Marsha Blackburn, which Twitter initially removed.
  • Only 60% of American workers get any paid time off for bereavement.
  • "The world is still run by men. I'm not sure it's going too well."

• BFD updates: (1) Yesterday's BFD was about eShares raising $41 million in Series C funding. Since then we've learned that the pre-money was around $280 million (2) Last week we discussed how The Honest Co. was raising $75 million at a major valuation slash. The company later said that existing backer Fidelity led the round (remember, Fidelity hadn't marked down its existing shares as of its September monthly valuations report).

• Tweet of the week: "Interesting cognitive bias: All VCs think everyone investing earlier than themselves is a monkey throwing darts, & everyone after a banker."@PT

• Trumpland: Jared Kushner has sold his majority stake in real estate tech startup WiredScore to Bessemer Venture Partners and Fifth Wall. No financial terms were disclosed.

• Recommended reading, per WSJ: "The Chinese government is pushing some of its biggest tech companies—including Tencent, Weibo and a unit of Alibaba—to offer the state a stake in them and a direct role in corporate decisions."

• Help. Please help: Several private equity firms yesterday launched a Puerto Rico relief drive, hoping to raise $10 million. All proceeds will go to Foundation for Puerto Rico, with Clearlake Capital donating an initial $500,000. You can learn more and donate by going here.

  • Stats: 37% of Puerto Rico residences still don't have potable water, according to FEMA. 84% remain without electricity. 47% remain without telecom services.
  • Buyout exec Orlando Bravo to CNBC: "You have shelters, towns, rural communities that are running extremely low to this day — almost three weeks after the hurricane hit — on food and water. It is way too early to even think about recovery. Right now, it's about survival"

CarGurus, a Cambridge, Mass.-based online car research and shopping platform led by TripAdvisor co-founder Langley Steiner, raised $150 million in its IPO. The company priced 9.4 million shares at $16 per share (above $13-$15 range), for an initial market cap of around $1.68 billion. It will trade on the Nasdaq under ticker symbol CARG, while Goldman Sachs was listed as left-lead underwriter. GarGurus reports $8.6 million of net income on $143 million in revenue for the first half of 2017, and lists pre-IPO shareholders like Fidelity and T. Rowe Price.

  • Why it's the BFD: Because this is a profitable, East Coast tech issuer valued at more than $1 billion — despite being bootstrapped for its first decade of existence. Oh, and then it raised pre-IPO funding from mutual funds that (gasp) led to an actual IPO. It's the old normal.
  • Bottom line: CarGurus has somehow kept a low profile despite reporting 23 million unique monthly users, but this IPO could make it more of a known commodity in tech and business circles.
Venture Capital Deals

• Knowbox, a Chinese homework help platform for K-12, has raised $30 million in Series B funding. Bertelsmann Asia Investments led the round, and was joined by Haoweilai, Baidu Ventures and New World Development Co. www.knowbox.cn

• SecurityScorecared, a New York-based provider of securities ratings, has raised $27.5 million in Series C funding. Nokia Growth Partners led the round, and was joined by Moody's, AXA Strategic Ventures, Intel Capital and return backers Sequoia Capital, Google Ventures, Boldstart Ventures, Two Sigma Ventures and Evolution Equity Partners. www.securityscorecard.com

🚑 Janpix, a Toronto-based oncology startup focused on signal transducers and activators of transcription, has raised C$22 million in VC funding from Medicxi. http://axios.link/Z7GX

• Attivo Networks, a Fremont, Calif.-based provider of "deception solutions for cybersecurity defense," has raised $21 million in Series C funding. Trident Capital Cybersecurity led the round, and was joined by return backers Bain Capital Ventures and Omidyar Technology Ventures. http://axios.link/11kp

• Honest Buildings, a New York-based provider of construction management software, has raised $13 million in Series B funding. Backers include Brookfield Property Partners, Rudin Management, C-III Capital Partners, Navitas Capital, Greensoil Building Innovation Fund, Bienville Capital Management, Riverpark Funds, Westly Group, Rockport Capital, Circle Ventures and Thrive Capital. http://axios.link/0EAF

• ShiftLeft, a Santa Clara, Calif.-based provider of app-specific cloud security solutions, has raised $9.3 million in Series A funding co-led by Bain Capital Ventures and Mayfield. http://axios.link/jbad

• ROSS Intelligence, a Toronto-based legal research startup, has raised $8.7 million in Series A funding. iNovia Capital led the round, and was joined by Comcast Ventures Catalyst Fund, Y Combinator Continuity Fund, Real Ventures and Dentons. http://axios.link/B9sw

• True Link Financial, a San Francisco-based provider of financial services for seniors, has raised $8 million in Series A funding. QED Investors led the round, and was joined by www.truelinkfinancial.com

• Creative Market, an Autodesk (Nasdaq: ADSK) spinout that offers an online marketplace for ready-to-use design assets from independent creators, has raised $7 million in Series A funding led by Accomplice. http://axios.link/zr9L

• MioTech, a Chinese developer of AI-based software for investment managers, has raised $7 million in Series A funding. Horizons Ventures led the round, and was joined by return backer ZhenFund. http://axios.link/isLS

• CloudZero, a Boston-based site reliability management platform for cloud computing, has raised $5 million in Series A funding co-led by Matrix Partners and Underscore VC. http://axios.link/Khom

• EazyDiner, an Indian restaurant reservation startup, has raised around $4.6 million in Series B funding. Beenext led the round, and was joined by an undisclosed family office and return backers DSG Consumer Partners and Saama Capital. http://axios.link/nVmw

• Allume, a Menlo Park, Calif.-based on-demand personal shopping service, has raised $3 million in seed funding from True Ventures. http://axios.link/PcWk

Private Equity Deals

⛽ Apollo Global Management and Canada Pension Plan Investment Board are teaming up for an offer on coal assets being sold by Rio Tinto (NYSE: RIO), per Reuters. http://axios.link/NAuk

• Baxter Planning Systems, an Austin, Texas-based supply chain SaaS company, has raised an undisclosed amount of growth equity funding from Polaris Partners. www.bybaxter.com

🚑 CVC Capital Partners and Tethys Invest have entered into exclusive talks to acquire a majority stake in Sebia, a French provider of medical equipment for in-vitro diagnostics, according to Reuters. Sellers would be Astorg Partners and Montagu Private Equity. http://axios.link/61Of

• Ecolab (NYSE: ECL) has agreed to sell its equipment care unit, which had 2016 revenue of $180 million, to Audax Private Equity. No financial terms were disclosed. http://on.wsj.com/2i6ihOU

• Industrial Opportunity Partners has acquired Creative Foam, a Fenton, Mich.-based foam products manufacturer. No financial terms were disclosed. www.creativefoam.com

🚑 Lee Equity Partners and FFL Partners have agreed to acquire a control stake in Summit Behavioral Healthcare, a Brentwood, Tenn.-based network of behavioral health centers, from Flexpoint Ford. No financial terms were disclosed. www.summitbhc.com

• Lexitas, a litigation support services company owned by Trinity Hunt Partners, has acquired NextGen Reporting, a Wayne, Penn.-based provider of deposition reporting, legal videography and trial support services. No financial terms were disclosed. www.lexitaslegal.com

• Thompson Street Capital Partners has acquired BCC Software, a Rochester, N.Y.-based provider of postal software and data marketing solutions for direct mail, from Versa Capital Partners. No financial terms were disclosed. www.bccsoftware.com

• Vista Equity Partners has agreed to acquire Jamf, a Minneapolis-based provider of Apple device management solutions, for an undisclosed amount. Sellers include Summit Partners. http://axios.link/K06Z

Public Offerings

🚑 OrthoPediatrics, a Warsaw, Ind.-based medical device company focused on the pediatric orthopedic market, raised $52 million in its IPO. The company priced 4 million shares at $13 per share (middle of range), for a fully-diluted market cap of $157 million. It will trade on the Nasdaq under ticker symbol KIDS, while Piper Jaffray and Stifel served as lead underwriters. The company reports a $2.5 million net loss on $21.6 million in revenue for the first half of 2017. Shareholders include Squadron Capital (66.8% pre-IPO stake). www.orthopediatrics.com

🚑 Restoration Robotics Inc., a Mountain View, Calif.-based developer of medical devices for hair transplantation, raised $25 million in its IPO. The company priced 3.6 million shares at $7 per share (vs. 3.1m originally offered at $7-$9), for a fully-diluted market cap of $210 million. It will trade on the Nasdaq under ticker symbol HAIR, while National Securities Corp. served as lead underwriter. The company reports just over $11 million in revenue for the first half of 2017, and has raised over $120 million in VC funding from firms like Clarus Ventures, Sutter Hill Ventures, Alloy Ventures and Interwest Partners. www.restorationrobotics.com

More M&A

🍺 Asahi Group (Tokyo: 2502) said that it is considering the sale of all or part of its 19.99% stake in China's Tsingtao Brewery (HK: 168). http://axios.link/X5wh

🚑 Azalea Health, an Atlanta-based provider of revenue cycle enhancement software for healthcare practices, has acquired Prognosis Innovation Healthcare, a Houston-based EHR for rural and community hospitals. No financial terms were disclosed. Azalea backers include Kayne Partners and Intersouth Partners. www.azaleahealth.com.

🚑 Novartis (Swiss: NOVN) has opted against selling its 33% voting stake in Roche (Swiss: ROG), which is valued at around $14 billion. http://axios.link/bGPR

🚑 Welltok, a Denver-based health optimization platform that has raised over $170 million in VC funding, has acquired Roswell, Ga.-based Tea Leaves Health from Ziff Davis. http://axios.link/ivBE


• American Securities is raising up to $6 billion for its eighth buyout fund, per an SEC filing. www.american-securities.com

• GTCR has closed its twelfth buyout fund with $5.25 billion in capital commitments, making it the firm's largest fund in its 37-year history. www.gtcr.com

• Mighty Capital, a new San Francisco-based VC firm founded by SC Moatti, is raising up to $100 million for its debut fund, per an SEC filing. www.mighty.capital

It's Personnel

Tara-Nicholle Nelson has joined Lightspeed Venture Partners as an entrepreneur-in-residence. Per VentureBeat, she plans to work on launching "a startup that brings spirituality into the digital sphere." http://axios.link/35he

• Scale Venture Partners has promoted Alex Niehenke to partner. www.scalevp.com

Final Numbers: IPO filings