Mar 3, 2020

Axios Pro Rata

By Dan Primack
Dan Primack
Top of the Morning
Source: Giphy

SoftBank CEO Masayoshi Son yesterday promised institutional investors that he'll do a better job of listening to their concerns, but stopped well short of saying that they'll change his mind.

  • Son was "interviewed" by Goldman Sachs investment banking co-head Dan Dees, at a private event in New York.
  • It was scheduled before Elliott Management took over a multibillion-dollar stake in SoftBank and began pushing for stock buyback, greater transparency, and fewer private company investments until outside capital is secured for Vision Fund 2.
  • The goal was to calm investor nerves, particularly in the wake of WeWork.

Son didn't commit to following any of Elliott's proposals, but he did express some past fondness for buybacks and a willingness to add more independent directors, per sources in the room.

  • He also reiterated recent comments about how it could be at least another year until Vision Fund 2 holds a first close, with intervening investments to be funded by the firm itself (and Vision Fund partners).
  • He also took a playful poke at critics, by noting internal resistance to his original investment in Alibaba.

The bottom line: Son appears bowed but not broken. Likely because he's one of the few investors who rode the dot-com train from boom to bust and back again. He plans to keep doing things his way, buttressed by a few cosmetic concessions.


🚑 Personnel scoop: Dave Mott has quietly stepped down as head of health care investing at New Enterprise Associates, the venture capital giant he joined in 2008 after having served as CEO of MedImmune.

  • Mott has invested in nine companies that have gone public, not including next week's expected listing for Imara (where he's board chairman). No word yet on his future plans.
  • He'll be succeeded by Mo Makhzoumi, who has been with NEA since 2005.
  • NEA began raising its seventeenth fund early last year with a $3.6 billion target. It hasn't yet announced a close, but don't be surprised to hear news on that front within a month or two.

Elliott blowback: Some Twitter employees are expressing their support for embattled CEO Jack Dorsey by ... using Twitter.

  • The #WeBackJack hashtag emerged yesterday, including from company execs like Lara Cohen and God-is Rivera.
  • Dorsey also got a public vote of confidence from Elon Musk.
  • Neither Dorsey nor Twitter have publicly commented on Elliott Management's efforts.

🚨 Viral materialism: Morgan Stanley's $13 billion agreement to buy E*Trade includes an explicit carve-out for coronavirus in its definition of "material adverse effects" that could trigger a deal termination.

  • The Blackstone Group, meanwhile, included the following warning in a recent 10-K filing: "The novel coronavirus presents material uncertainty and risk with respect to our and our funds’ performance and financial results."

🎧 Pro Rata Podcast preps for Super Tuesday, with a discussion of the controversial monetary theory that could "pay for" Bernie Sanders' campaign promises. Listen here.

  • Last week we discussed a proposal by Sens. Sanders and Chris Van Hollen (D-Md.) to tax certain stock options at vesting, rather than at exercise. The National Venture Capital Association has now responded.

Illustration: Sarah Grillo/Axios

Waymo, the self-driving unit of Alphabet, raised $2.25 billion in its first round of outside funding.

  • Why it's the BFD: Self-driving is the venture market's most capital-intensive gold rush since cleantech manufacturing, and Waymo is now a leader in the unicorn clubhouse. But even this vote of confidence comes with some apprehension, as Waymo reportedly began fundraising a year ago.
  • Investors: Silver Lake, CPPIB, and Mubadala Investment Co. co-led, and were joined by Alphabet, Andreessen Horowitz, AutoNation, and Magna International. Notably absent were any automakers (at least so far, as Waymo positioned this as a first close).
  • The bottom line: "The announcement is sure to be welcome news to Waymo’s and Alphabet’s respective financial teams, which are charged with keeping the cash-intensive operation afloat. Waymo is said to be costing Alphabet nearly $1 billion and is only bringing in a paltry amount of revenue from its limited commercial robot taxi service in the suburbs of Phoenix." — Andrew Hawkins, The Verge
Venture Capital Deals

🚑 Immunocore, a U.K.-based developer of immuno-oncology drugs, raised $130 million in Series B funding. General Atlantic led, and was joined by CCB International, JDRF T1D Fund, Rock Springs Capital, Terra Magnum Capital Partners and WuXi AppTec, and return backers Eli Lilly, RTW Investments, and the Bill & Melinda Gates Foundation.

🚑 Pliant Therapeutics, a South San Francisco-based developer of fibrosis treatments, raised $100 million in Series C funding. Novartis led, and was joined by Redmile Group, Farallon Capital Management, Cormorant Asset Management, Surveyor Capital, Logos Capital, and return backers Eventide Asset Management, Cowen Healthcare Investments, Schroder Adveq, Menlo Ventures, SCubed Capital, and Agent Capital.

MWM, a French music app publisher, raised €50 million. Blisce led, and was joined by Idinvest Partners, Bpifrance, Aglaé Venturesm and Xavier Niel.

Brooklinen, a Brooklyn-based e-commerce company for bedding and home goods, raised $50 million from Summit Partners.

🛴 Bolt Mobility, a Miami Beach-based electric scooter company co-founded by Olympic sprinter Usain Bolt, raised $30 million in Series A funding led by Rokk3r Fuel at a $100 million valuation.

PredaSAR, a Boca Raton, Fla.-based developer of a synthetic aperture radar satellite constellation, raised $25 million in seed funding led by Rokk3r Fuel.

Sourcegraph, a San Francisco-based provider of universal code search for companies, raised $23 million in Series B funding. Craft Ventures led, and was joined by return backers Redpoint Ventures and Goldcrest Capital.

Sensel, a Sunnyvale, Calif.-based developer of pressure-sensitive touchpad devices, raised $22 million in Series A funding from Susquehanna International Group, Morningside Group, SMiT, Palm Commerce Holdings Co., Chariot Gold, SV Tech Ventures and Innolinks Ventures.

🌴 C16 Biosciences, a New York-based developer of synthetic palm oil, raised $20 million in new funding led by Bill Gates’ Breakthrough Energy Ventures.

Le Wagon, a French coding bootcamp, raised €17 million. Cathay Capital led, and was joined by AfricInvest.

iPrice, a Malaysia-based comparison shopping platform, raised $10 million in Series B funding. ACA Investments led, and was joined by Daiwa PI Partners and return backers Line Ventures and Mirae Asset-Naver Asia Growth Fund.

Welcome Technologies, a Los Angeles-based provider of digital services for immigrant communities, raised $8 million in Series A funding led by Crosscut Ventures.

🚑 Primmune Therapeutics, a San Diego-based developer of immunotherapies for cancer and viral diseases, raised $7 million in seed funding from CAM Capital, Charlie McDermott, BioBrit, and BioRock Ventures.

FairShake, an Oakland-based legal startup for individuals in legal disputes with large companies, raised $3 million in seed funding. First Round Capital led, and was joined by Founder Collective and BoxGroup.

Sonantic, a British developer of artificial voice tech for games and entertainment, raised €2.3 million. EQT Ventures led, and was joined by seed backers Entrepreneur First and AME Cloud Ventures.

Boutiqaat, a Kuwait-based beauty products e-commerce company, is raising between $100 million and $150 million in new VC funding, per Reuters.

Private Equity Deals

Charlesbank Capital Partners acquired a majority stake in Tinton Falls, N.J.-based insurance brokerage World Insurance Associates.

Clayton, Dubilier & Rice agreed to buy U.K.-based medical advertising and marketing firm Huntsworth (LSE: HNT) for around £400 million.

🚑 Francisco Partners agreed to acquire Smith Technologies, a Spartanburg, S.C.-based developer of community pharmacy and long-term care technology, from J M Smith Corp.

Highview Capital and Firstlight Media agreed to buy Quickplay, a provider of managed solutions for distributing video content to IP-connected devices, from AT&T (NYSE: T).

Nautic Partners acquired Harrington Industrial Plastics, a Chino, Calif.-based distributor of industrial plastic piping, from Belgium’s Aliaxis.

Prospect Hill Growth Partners acquired a majority stake in Fitness Ventures, an Orlando, Fla.-based franchisee of Crunch Fitness gyms.

🚑 RevSpring, a Livonia, Mich.-based portfolio company of GTCR, acquired Loyale Healthcare, a Lafayette, Calif.-based provider of patient financial engagement software.

Public Offerings

GFL Environmental, a Canadian waste management firm backed by BC Partners, raised $1.4 billion in a U.S. IPO that originally sought to raise much more before postponing the offering last October.

🚑 Imara, a Cambridge, Mass.-based developer of therapeutics for chronic treatment of sickle cell disease, set IPO terms to 4.45 million shares at $16–$18. It would have an initial market cap of $278 million, were it to price in the middle, and plans to trade on the Nasdaq (IMRA) with Morgan Stanley as lead underwriter. Imara raised $97 million in VC funding from NEA (29.8% pre-IPO stake), OrbiMed (13.4%), Arix Bioscience (11.5%), Lundbeckfond (10.5%), Pfizer Ventures (10.5%), RA Capital (7%), Bay City Capital (5.9%), and Alexandria Venture Investments.

👖 J. Crew, a portfolio company of Leonard Green & Partners and TPG Capital, reached an agreement with lenders to delay the proposed spinoff and IPO for its Madewell jeans unit.

Springer Nature, the German publisher of science magazines Nature
and Scientific American, plans to launch its IPO next week, per Reuters. The company is owned by BC Partners and publisher Holtzbrinck.

Liquidity Events

Graycliff Partners sold NAL Group, an Edison ,N.J.-based provider of last mile logistics and on-premise installation services, to Iowa-based CRST International.

🚑 Quadrant Private Equity is seeking a buyer for Qscan, an Australian diagnostic imaging company that generates around A$65 million in annual EBITDA, per The Australian.

🚑 Stone-Goff Partners sold Cleveland-based HR services firm NAS Recruitment to health care-focused marketing company M3 USA.

More M&A

🚑 Clarivate Analytics (NYSE: CCC) acquired Burlington, Mass.-based health care insights and analytics firm Decision Resources from India’s Piramal Enterprises for $950 million.

Masmovil (BME: MAS), a Spanish mobile network operator, acquired Spanish mobile communications company Lycamobile from Lyca Group for €372m.

🚑 Thermo Fisher Scientific (NYSE: TMO) offered to buy German genetic testing company Qiagen (DE: QIA) for €10.4 billion.

Xerox (NYSE: XRX) yesterday took its $35 billion hostile takeover bid for HP (NYSE: HPQ) to shareholders, via a formal tender offer.


Bregal Sagemount, a New York-based private equity firm, raised $1.5 billion for its third fund.

RTP Global raised $650 million for its third early-stage VC fund.

It's Personnel

Laura Anderson late last year stepped down as head of communications at Silver Lake, which she joined in May 2019 after nearly 19 years with Intel.

Christopher Austin, a tech-focused finance attorney, joined Paul Hastings as a partner, after nearly six years with Orrick, Herrington & Sutcliffe.

Andrew Junkin is stepping down as president of Wilshire Consulting.

Andrew Newington is stepping down as chief investment officer at emerging markets-focused private equity firm Actis, per Bloomberg.

Elisabetta Ricci and Pierre Heinrichs have left Caisse de dépôt et placement du Québec, where they co-led European direct private equity investments, per the WSJ.

Final Numbers
Source: PitchBook. Data for U.S.-based funds.
Dan Primack

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